Facts
IBS Technologies (PVT) Limited ('IBS') owned the rights to an
aviation software product "TopAir" and had copyright in its source
code. The product was developed and originally owned by a
company called AeroComputer, which became insolvent and was
subsequently dissolved. IBS acquired the rights to
TopAir at about that time. The product had been
developed by a team of experts in the field of aviation software
employed by AeroComputer including a Dr Pochon and several others.
They went on to work for APM Technologies SA ('APM').
IBS alleged that when Dr Pochon left AeroComputer he took with
him the TopAir source code and that this was used in the
development of APM's new software system referred to as the 'APM
System'. They alleged that APM had copied wholesale the TopAir
source code. The functional and other similarities of a specific
module of the APM System named 'SmartOps' caused particular concern
to IBS and in March 2002 IBS wrote to APM complaining of its
conduct in relation to TopAir. In a letter dated 6 September
2002, IBS warned that it would seek an injunction to prevent any
copying of TopAir.
There was a considerable period of delay before that threat was
implemented by IBS and the present court action against APM was not
commenced until 10 January 2003. In these proceedings, IBS
sought to prevent APM from pursuing four distinct types of
activity. These were:
- providing development, implementation and maintenance support
to JMC Airlines Limited ("JMC"), who were users of
TopAir;
- providing or marketing any development, implementation and
maintenance services to or for any other individual or corporation
or doing any act with respect to the TopAir source code and
software;
- copying, modifying or adapting the TopAir code; and
- marketing SmartOps or providing any other product based on any
copied, modified or adapted TopAir code.
In addition, IBS sought an order requiring APM to hand over any
copies, modifications or adaptations of the TopAir code in its
possession.
Judgment
The initial question for Mr Briggs QC, sitting as a deputy
judge, was whether IBS had successfully disclosed a real issue for
trial. He quickly rejected the IBS arguments in relation to
maintenance and support service. He concluded that the
real issue to be considered at this stage was the technical point
as to whether the APM System was a colourable copy of TopAir, and
consequently whether there was a serious issue to try in relation
to breach of copyright. He recognised that at this
stage he was not required to determine this issue and, indeed, he
lacked the technical expert evidence required to assess the
existence or extent of any copying.
The Claimant put forward seven main arguments:
- There was a high degree of functional similarity between TopAir
and the APM System, judging from a schematic description of the APM
System on the Defendant's web site.
- The APM system was being developed by a team of experts which
included the two principal architects of TopAir.
- Commencement of the development of the APM System began at
almost exactly the same time as the demise of AeroCompuer; in
effect the defendants simply carried on where they left off with
TopAir.
- APM had access to the source code of TopAir. While IBS accepted
that the Defendants had access to the source code from March 2002,
it alleged that another copy was appropriated by Dr Pochon.
- Dr Pochon's own evidence showed that he harboured considerable
bad feeling towards AeroComputer and so he had a motive to take and
copy the software.
- IBS pointed to the considerable speed with which the APM System
had been devised, tested and almost made ready for market, by
comparison with the much longer time taken by the same designers to
produce TopAir. They argued that the APM system could not have been
an original creation and must have been a copy.
- APM had used software development tools which were outmoded,
but were said to have been used to develop TopAir.
Mr Briggs QC rejected all but the fourth and sixth arguments.
Much of IBS' argument was undermined by an offer by APM some time
before the hearing to provide a copy of the TopAir and APM software
to a qualified independent expert so that an independent opinion
could be obtained in relation to the allegation of copying. IBS did
not take up that offer. Mr Briggs QC nevertheless considered that
the fourth and sixth arguments just satisfied the requirement of an
issue to try.
Having established that there was a real issue to try, Mr Briggs
QC moved on to consider whether APM should be granted an injunction
until the trial took place. This point was determined by
balancing the likelihood and extent of damage that would be
suffered by IBS if the order were not granted against the financial
losses that APM would suffer if the order was made. The
potential for losses by APM was very great, given that APM would in
effect be unable to pursue any of its main business activities.
JMC had contracted with AeroComputer in May 2000 for maintenance
and support of TopAir, which it had purchased. The contract
allowed that, if AeroComputer became insolvent, then JMC was
entitled to obtain maintenance and support services from any
suitably qualified software maintenance specialist such as that
employed by APM. The contract clearly stated that JMC could
make available the TopAir source code to such a specialist for
maintenance and support purposes. It was for this reason that
Mr Briggs QC dismissed the first and second orders sought by
IBS. He also considered that, in order to provide the support
and maintenance allowed/sought by the contract between JMC and
AeroComputer, a specialist would have to undertake specialist
copying of the source code and so the third order sought by IBS,
which attempted to prohibit copying, was also dismissed.
Mr Briggs QC concluded that, if granted, the fourth request
relating to SmartOps would effectively prevent APM from marketing
the APM System in its entirety, since SmartOps was integral to the
operation of the APM System as a whole. He also refused to
allow the blanket request for APM to hand over all copies of the
TopAir source code as this would prevent it from carrying out the
legitimate maintenance and support operations for JMC and other
companies.
This meant that the two remaining issues to be dealt with were
whether APM should be prevented from modifying or adapting the
TopAir code and whether APM should be allowed to market the APM
System within the United Kingdom. He considered the
commercial implications and likelihood of irreparable damage being
suffered by APM if these orders were made. He concluded that
there was a real prospect that APM would suffer irreparable damage
and so recommended a speedy trial should be made to determine the
issue of copying. The final decision to dismiss all of the
orders requested by IBS was heavily influenced by the company's
lack of funds and inability to compensate APM for its losses if it
subsequently emerged that there had been no breach of
copyright.
Commentary
Mr Briggs QC was not required to consider the issue of whether
the TopAir source code had been unlawfully copied or 'stolen'. It
is, however, clear that, while an issue to try was ultimately
shown, the arguments put forward by IBS were regarded as
tenuous. The judgment repeatedly alludes to the lack of force
in the arguments put forward by IBS but at the same time accepts
that it was still open to IBS to construct a more convincing case
before trial.
In any case where breach of copyright is alleged, it is plainly
important to have clear and unchallengeable evidence of the
copying. A case based on inference, is vulnerable to a vigorous
attack. Had clear evidence been produced, in the form of an expert
comparison of the two systems, Mr Briggs QC's approach is likely to
have been different. Clearly Mr Briggs QC took a commercial view of
the impact the orders sought would have had on the APM's
business and the IBS' financial position in determining that
the orders should not be granted.
