QMC Instruments Limited v Celtic Terahertz Technology Limited & Ors

Summary judgment is appropriate only where the claimant or defendant has no real prospect of success and there is no other compelling reason for a trial. The court may decide a short point of law or construction, but should not conduct a mini-trial or resolve genuinely arguable contractual meaning without the necessary factual background.

Where contractual wording is prospective and materially dependent on factual context, an asserted present licence or exclusive right may remain unsuitable for summary determination. A collaborative commercial relationship does not, without more, import duties of good faith, trust and confidence, or fidelity. Contested evidence concerning performance, supply, or alleged diversion of business will ordinarily require a trial.

QMC Instruments Limited applied for summary judgment in claims concerning intellectual property, contractual licences, alleged copyright infringement, equitable enforcement, supply of a filter, and the diversion of business by a former director.

The dispute arose from agreements made in 1991 and 2001 concerning cooled detector technology and filters developed through work associated with Queen Mary University and Cardiff University. QMC contended that those agreements gave it ownership or exclusive rights in relevant intellectual property and imposed continuing obligations on Cardiff University and the individual defendants.

The central questions were whether the contractual terms could be construed in QMC’s favour without a trial, whether the 2001 agreement created an extant exclusive licence or equitable duties, and whether the remaining factual claims could be summarily determined.

1. Summary judgment test. The court applied CPR rule 24.3 and the principles set out in Easyair v Opal Telecom [2009] EWHC 339 (Ch), approved in AC Ward v Catlin [2009] EWCA Civ 1098. The court must assess whether the claim or defence has a realistic prospect of success and whether any other compelling reason requires a trial. It must avoid a mini-trial, while analysing assertions that plainly lack substance. It may decide a short legal or construction issue where the evidence is sufficient and the parties have had a proper opportunity to address it.
2. 1991 agreement. The meaning of “cooled detector technology”, and whether it included multi-mesh filters, was properly arguable on both sides. The term was undefined and could not be construed without examining the factual background. The scope of the intellectual property claimed was also insufficiently identified.
3. 2001 agreement. Clause 2(c) was prospective. The references to material “acquired or developed”, the duration of the agreement, third-party research rights, and the requirement that the university be free to grant rights supported the view that the clause was an agreement under which QMC could require a licence, rather than an automatic extant exclusive licence over everything. QMC had never sought such a licence. The parties’ prior dealings did not determine the construction.
4. Equitable duties. The contractual relationship was properly arguable as purely commercial. Collaboration in practice did not establish duties of good faith, trust and confidence, or fidelity. QMC was therefore not entitled to summary judgment on its equitable claims or claim for an account.
5. Remaining claims and outcome. The FSS2 claim involved contested facts and was unsuitable for summary judgment. Although the diversion claim against Mr Wood appeared weak, a possible defence remained. The application for summary judgment was refused in relation to all claims. The parties were directed to mediate, with a stay until the end of February. Costs were ordered to be assessed on the standard basis, with interim payments of £85,000 to Cardiff University and approximately £94,000 to the other defendants, payable after the mediation period.

This was a first-instance decision. No appellate history is stated in the judgment.