In a dispute between development company Gameaccount
and its former parent company Cantor Gaming, the High Court ordered
that an injunction and a delivery up of the offending software
should be granted against Gameaccount.
Gameaccount was found to have breached a licence agreement when
it made use of software it had developed while a part of Cantor in
a manner prohibited by the software licence agreed when the two
companies parted.
It was also found guilty of breach of contract and copyright
infringement in relation to a second piece of software, but
Gameaccount had admitted those errors.
"In making this finding, however, it should not be thought that
I attribute any real significance either to the breach or to the
infringement," said Daniel Alexander, QC, sitting as a deputy High
Court judge. "It is perfectly possible (as here) for a breach of
contract to be real but nonetheless of limited, if any, commercial
importance."
"In my judgment this was a minor breach, committed more through
laziness than through any deliberate policy. It was capable of easy
remedy and was quickly remedied in 2006 under threat of
litigation," he said.
Gameaccount came into being when Kevin O'Neal and David McDowell
approached Cantor parent company BCG with an idea for developing
online games. They created a company with Cantor in which Cantor
was the majority shareholder.
After a dispute about the direction of the project and its
budgeting, O'Neal and McDowell left the company. Gameaccount was
set up outside of Cantor to service the one contract that the
company had won.
Cantor owned the copyright in all the software that had been
developed, but the company granted Gameaccount a perpetual,
irrevocable, royalty-free, non-exclusive licence to use the
software.
One condition of the licence was that the software must not be
used as part of a deal with or in a project financed by a third
party bookmaker. That condition was clause 10.3.6 of the
agreement.
Gameaccount proposed going into business with UKBetting. It
realised that it would need to change its software in order to
avoid breaching the terms of its contract with Cantor.
"By 2003, GA knew that it would have to make changes to the
software in order to avoid infringing Cantor's rights when it was
proposing to enter into arrangements with UKBetting," said the
judge's ruling. "[Gameaccount chief technical officer Samuel
Lawrence] accepted in cross-examination that he always knew that
the "database part needed to be migrated away from" in order to
comply with the contractual requirements."
The court found that that 'migration' did not go far enough, and
that the Cantor technology was used in Gameaccount's use of the
Cantor-owned GAMoney product.
"As noted above, the central question for this part of the case
is whether the use of GAMoney, after the date in 2004 when
arrangements were made with UKBetting, violated clause 10.3.6 of
the Agreement," said Alexander in his ruling. "The starting point
is that it is common ground that such use as there may have been by
GA in the course of providing services for UK Betting was not of
commercial importance."
"In opening the case, Cantor's counsel candidly and helpfully
said that it was not alleged that the use of GAMoney was important
to the defendant's system, although it was pointed out that it was
playing a role in the defendant's system and that, if it was being
copied or used, that was unlicensed use," he said.
The court found that the use of GAMoney, in however limited and
commercially insignificant a form, was a breach of the licence
agreement and an infringement of copyright.
Gameaccount also admitted a separate breach in relation to a
GAGolf game. The company had already stopped both breaches, but an
injunction was granted against further breach.
The judge said he would hear further argument on the order and
costs in the case.
