I-Smart Developments Limited v Currentbody.com Limited

Applications to strike out or obtain summary judgment should be determined without a mini-trial. The court must assess whether the claim has a realistic prospect of success, consider evidence reasonably expected to be available at trial, and allow a trial where fuller factual investigation may affect the outcome. A short point of law or construction may be decided summarily where the evidence is sufficient and the parties have had a fair opportunity to address it.

Where an application combines strike out and summary judgment, evidence relied on by the applicant is subject to the procedural safeguards of Civil Procedure Rules 1998, Part 24 unless its purpose is clearly limited to strike out. Contractual construction is an objective, iterative exercise requiring consideration of the agreement as a whole and, where appropriate, its factual matrix.

Two related Intellectual Property Enterprise Court actions concerned alleged breaches of a mutual non-disclosure agreement relating to designs for an LED face mask and neck bib.

In the first action, I-Smart Developments Limited claimed against Currentbody.com Limited for breach of a distribution agreement and infringement of registered and unregistered design rights. Currentbody counterclaimed that the I-Smart parties had breached the non-disclosure agreement by seeking intellectual property rights.

In the second action, Shenzhen Kaiyan Medical Equipment Co. Ltd claimed against the I-Smart parties for breach of the same agreement and breach of confidence, seeking relief concerning the registered designs. The I-Smart parties applied in both actions to strike out the relevant pleaded cases or obtain summary judgment.

1. Summary disposal. The principles in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch), approved in AC Ward & Sons Ltd v Catlin (Five) Ltd [2009] EWCA Civ 1098, applied to both applications. The court had to distinguish a realistic prospect of success from a fanciful one, avoid conducting a mini-trial, consider evidence reasonably expected at trial, and hesitate to decide summarily where fuller factual investigation might affect the outcome. A short point of law or construction could nevertheless be decided if the evidence was sufficient and the parties had a fair opportunity to make submissions.
2. Procedural safeguards. The safeguards in CPR 24.5 applied because the applicants had not identified any distinction between the evidence supporting strike out and the evidence supporting summary judgment. Arguments not identified in the application notice, including the point under section 1(3) of the Contracts (Rights of Third Parties) Act 1999, could not fairly be summarily determined where the respondent had not had adequate notice and opportunity to address them.
3. Contractual interpretation. The approach summarised in Sara & Hossein Asset Holdings Ltd v Blacks Outdoor Retail Ltd [2023] UKSC 2 was applied. The NDA had to be construed objectively, as a whole, and through an iterative assessment of its language, consequences and relevant factual matrix.
4. NDA issues. The meaning and effect of clauses 2(5) and 3(1), including the meaning of generally known, the purpose of the restriction on applying for or claiming intellectual property rights, the identity of the relevant actor, and the timing and circumstances of disclosure, raised sufficiently arguable legal and factual issues. They required trial rather than summary determination.
5. Disposition. Both the Currentbody and Kaiyan cases based on alleged breach of the NDA carried some degree of conviction. The applications to strike out and for summary judgment were dismissed.