Clearcourse Partnership Acquirecco Limited & Anor v Manoj Jethwa & Ors

On a summary judgment application, the respondent need show a realistic, rather than fanciful, prospect of success. The court must not conduct a mini-trial, but may reject factual assertions that lack reality, particularly where contradicted by compelling contemporaneous documents.

In disputes concerning commissioned software, ownership and licensing consequences are highly fact-sensitive. Mere commissioning does not establish copyright ownership. The court must determine what contractual term, if any, is necessary to imply, and whether that term confers a licence, beneficial ownership or an assignment. Similar care is required when fiduciary duties are said to produce beneficial ownership. Where substantial factual issues remain and further evidence may emerge, summary judgment should be refused.

Palmyra Holdings Management Limited sought summary judgment on its Part 20 claim for a declaration that E-Novations (London) Limited was the legal and beneficial owner of intellectual property in the Emperium software.

The Jethwa defendants contended that the software had been developed by Epos Guru, initially owned by that company and later assigned to Epos Direct Europe Limited. They relied on witness evidence concerning development, funding, licensing and a 2017 assignment.

Palmyra relied on contemporaneous commercial documents, contractual warranties, customer licences, inherent probabilities and the absence of expected supporting evidence. The central issue was whether the Jethwa defendants had a real prospect of establishing at trial that Epos Direct Europe Limited, rather than E-Novations, owned the intellectual property.

1. Application dismissed. The Jethwa defendants’ case was more than merely arguable, carried some conviction and was not fanciful. The evidence therefore established a real prospect that the issue of legal and beneficial ownership could be resolved in their favour at trial.
2. The summary judgment principles under Civil Procedure Rules 1998, Part 24, required the court to distinguish a realistic case from a fanciful one. The court should not conduct a mini-trial, but need not accept factual assertions lacking reality. It should consider evidence reasonably expected to be available at trial and decide a short point of law or construction where the relevant materials permit that course.
3. The court declined to treat the observations in Gestmin v Credit Suisse as requiring witness evidence to be ignored merely because it appeared inconsistent with contemporaneous documents. Documentary evidence could be potentially conclusive, but witness evidence should be rejected at this stage only if the documents rendered it wholly incredible or unrealistic.
4. The assignment dated 17 June 2017 potentially did not transfer the relevant intellectual property because its wording concerned rights created for or on behalf of Epos Direct, which was not incorporated until April 2017, whereas the software might have been created for E-Novations. This raised a possible issue concerning title in Epos Guru, which was not a party.
5. Under the Copyright, Designs and Patents Act 1988, sections 9 and 11, authorship and first ownership depended on who created the relevant software and the applicable employment relationship. The evidence that the software had been rewritten by Epos Guru’s employees from 2008 created a triable issue, subject to any relevant Indian law and arguments concerning commissioning and fiduciary duties.
6. In a commissioning case, the court must identify the contractual basis and imply only terms necessary to fill the contractual lacuna. Mere commissioning is insufficient to establish copyright ownership. Whether a licence or beneficial ownership should be implied was fact-sensitive. The fiduciary-duty argument was also not open and shut, since the alleged funding and licensing arrangements materially differed from the circumstances in Vitof Ltd v Altoft.
7. Although the contemporaneous documents, EULAs, outsourcing agreement, inherent probabilities and evidential gaps strongly supported Palmyra’s case, they did not wholly undermine the Jethwa defendants’ evidence. Further disclosure and evidence might materially affect the outcome.