Football Dataco Ltd & Ors v Smoot Enterprises Ltd & Anor (Rev 1)

This is an application for judgment in default and, as against the first defendant only, for an interim payment of damages pending assessment. I have taken the unusual course of giving a reasoned judgment on the application for judgment in default because it raises a point of potentially general application, arising from the fact that the question whether the claimants have a cause of action for part of the relief sought turns on a question of European law which is the subject both of an unresolved appeal to the Court of Appeal and of a reference by that court to the European Court of Justice.

The claimants are parties responsible for organising and running the major football leagues in England and Scotland. They publish lists of forthcoming matches in each season (the “Fixture Lists”). They also publish match information relating to matches currently being held, such as goals scored, red and yellow cards shown and the outcome of penalties (“the Live Data”).

The Amended Particulars of Claim allege (inter alia) copyright in the Fixture Lists as databases, and a sui generis database right in the Live Data.

The claimants’ pleaded case is that the defendants have each committed infringements within England of their copyright and database rights respectively in the Fixtures Lists and the Live Data, by publishing them on websites serviced within England without the claimants’ consent. They seek by this application permanent injunctions restraining that conduct in the future, damages to be assessed, and, as against the first defendant only (due to difficulties in serving the second defendant), an interim payment on account of damages. Service of the claim upon the defendants out of the jurisdiction was effected without the court’s permission, pursuant to CPR Part 6.33(1). Neither defendant acknowledged service.

In similar proceedings against Yahoo! UK Ltd and others commenced in 2008 the claimants sought similar relief arising out of infringement of their alleged copyright in the Fixture Lists. In Football Data Co Ltd & ors v. Yahoo! UK Ltd & ors [2010] EWHC 841 (Ch) Floyd J held, on the trial of a preliminary issue, that the claimants did indeed enjoy copyright in the Fixture Lists as a database pursuant to sections 3 and 3A of the Copyright Designs and Patents Act 1988 (“CDPA 1988”). Section 3A was introduced by amendment into the CDPA 1988 so as to implement within the United Kingdom Article 3 of the Database Directive (96/9 EC).

On 9^th December 2010 the Court of Appeal gave judgment on the defendants’ appeal, for which the Neutral Citation Number is [2010] EWCA Civ 1380. Without expressing a concluded view on the merits, the Court of Appeal considered that the issue as to the subsistence of database copyright in the Fixture Lists raised questions of interpretation of Article 3 of the Database Directive which needed to be referred to the ECJ, and settled what Jacob LJ described as short and simple questions upon which the determination of the ECJ was sought. The result is that the appeal in the Yahoo case remains to be determined and, so I was informed by Mr Chacksfield, counsel for the claimants, a period of up to two years may reasonably be expected to expire before the decision of the ECJ is obtained, always assuming that the litigation which has generated that reference is not itself settled.

In the absence of settlement, the outcome of the reference to the ECJ (together with its implementation when the Yahoo case returns to the Court of Appeal) will, as Mr Chacksfield frankly conceded, be conclusive of the question whether the claimants in the present case do or do not enjoy database copyright in the Fixture Lists. He submitted that this uncertainty was, nonetheless, no reason why the court should not give default judgment in the claimants’ favour against these defendants, upon the basis of the allegation in the Amended Particulars of Claim that such database copyright subsisted.

The procedure for obtaining judgment in default of acknowledgement of service (which is the relevant default for present purposes) is set out in CPR Part 12. Rule 12.2 prevents default judgment being obtained at all in respect of certain types of claim. Rule 12.4(1) provides that, in relation to certain types of claim, default judgment may be obtained, purely administratively, by filing a request. Those cases include claims for liquidated sums or for damages to be assessed, together with claims for delivery of goods where the claim form gives the defendant the alternative of paying their value, or any combination of those remedies.

By contrast, where a claim consists of or includes a claim for any other remedy (such as an injunction) rule 12.4(2) provides that the claimant must seek default judgment by application pursuant to Part 23, unless he abandons his claim for remedies other than those identified in Part 12.4(1), which I have summarised above.

By rule 12.10 the claimant must also apply under Part 23 (rather than by request) where (inter alia) the claimant wishes to obtain a default judgment where a defendant has failed to file an acknowledgement of service, having been served with the claim out of the jurisdiction under Rule 6.32(1), 6.33(1) or 6.33(2), where permission is not required under the Civil Jurisdiction and Judgments Act 1982.

Rule 12.11(1) provides that:

“Where the claimant makes an application for a default judgment, judgment shall be such judgment as it appears to the court that the claimant is entitled on his statement of case.”

I was initially concerned that, in circumstances where the claimants’ entitlement to database copyright in the Fixture Lists had been determined by the Court of Appeal to be attended by such a legal (rather than factual) uncertainty that the legal issue had to be referred to the ECJ, the claimants could not within the meaning of rule 12.11(1) demonstrate that they were entitled to judgment of any kind on that part of their Amended Particulars of Claim which sought relief for infringement of that alleged right. The legal uncertainty would on the face of it appear to affect their claim for damages just as much as their claim for an injunction. I understand that, when the matter came initially before Morgan J as applications judge before being transferred to me, he expressed a similar initial concern.

Mr Chacksfield sought to alleviate those concerns by two submissions. The first was that, unless and until the Court of Appeal, armed with the ECJ’s decision on the questions referred, decides to allow the defendants’ appeal in the Yahoo case, Floyd J’s decision that the claimants do enjoy database copyright in the Fixture Lists remained good law and ought in principle to be followed.

His second submission was that, in any event, the court was not concerned to address the merits of a claim, even on a Part 23 application for default judgment, provided that it was not obviously bad in law.

I have, after some hesitation, concluded that the reference to the ECJ, in the Yahoo case, of questions going to the subsistence, as a matter of law, of database copyright in the claimants’ Fixture Lists, does not prevent the court from acceding to the claimants’ application for default judgment, both for damages to be assessed and for a permanent injunction, in relation to its claim for infringement of database copyright in the Fixture Lists. My reasons follow.

Default judgment is not, in any circumstances, a judgment on the merits. It is in that respect to be contrasted both with judgment after a trial and with summary judgment. The essential distinction between default judgment and a judgment on the merits is that the court is not when asked to give default judgment called upon to form any view about the merits of the claimant’s claim, whether as a matter of fact or law.

Thus for example, a claim may be pleaded upon an assertion as to the true construction of a written agreement alleged to have been made between the parties. In default of defence, or acknowledgement of service, the claimant may obtain default judgment without the court being called upon to address the strength of the claimant’s case on construction. Construction is of course a question of law, but the defendant’s failure either to acknowledge service or defend is a sufficient reason for the court to give judgment in default.

The circumstances in which Part 12 permits an application for default judgment by request (a process which prevents any judicial analysis of the legal merits of the claim) include all claims purely for damages (including cases which originally included an abandoned claim for an injunction). The provisions in rule 12.4(2) and 12.10(b)(i) which require a Part 23 application are triggered not by reference to anything connected with the legal foundation for the cause of action, but rather by aspects either of the relief sought (such as an injunction) or aspects of the manner in which the defendants have been served out of the jurisdiction. It must be supposed that those aspects of the relief sought, or the circumstances of service, call for some supervision by a judge of the process for obtaining default judgment. In the case for a claim for injunction that may be assumed to derive from the need to tailor the extent of the injunction to the cause of action asserted. In a case of service out of the jurisdiction without permission, it may be assumed to derive from a perceived need to ensure that the conditions for service out of the jurisdiction without permission have been fully and properly satisfied. Other examples of cases where some special degree of supervision by a judge have been thought to have been necessary are where the claim is against a child or protected party, or where it is a claim in tort by one spouse or civil partner against the other: see rule 12.10(a).

I consider that the requirement in rule 12.11(1) that it must appear to the court that the claimant is entitled to judgment needs to be interpreted in the light of the aggregation of the prescribed circumstances in which an application under Part 23 (rather than a mere request) is required. I do not consider that rule 12.11(1) requires the court to second-guess an assertion in the particulars of claim that, as a matter of law, the facts alleged provide the claimant with a cause of action. Rather, the purpose of the requirement for an application is either to enable the court to tailor the precise relief so that it is appropriate to the cause of action asserted, or otherwise to scrutinise the application in particular circumstances calling for more than a purely administrative response. It is in those respects that it must appear to the court either that the applicant is entitled to the default judgment sought, or to some lesser or different default judgment.

The point may be tested by asking what would have been the effect of a pending appeal coupled with a reference to the ECJ if the claimants had abandoned the injunction claim, and been able to serve the defendants within the jurisdiction. The answer is that the claimants could have obtained a default judgment for damages to be assessed by a mere request under rule 12.4 (1), without any judicial scrutiny at all.

Even if something more is required by rule 12.11(1), I do not consider that the existence of an adjourned appeal in a case on the same facts, pending a reference to the ECJ on a point of law which undoubtedly goes to the claimants’ cause of action, means that it does not appear that, on the Amended Particulars of Claim, the claimants are entitled to judgment for infringement of database copyright in the Fixture Lists, as against these defendants. The position is that, as matters stand (and are likely to remain for up to two years) the claimants have in other proceedings made good their claim to database copyright in the same Fixture Lists, subject only to a pending appeal which has yet to be resolved, and in relation to which neither the Court of Appeal nor the ECJ have yet expressed any view on the merits, one way of the other.

Leaving aside references to the ECJ, the general position under English law is that pending appeals do not, in principle, deprive the litigant of the fruits of a judgment already obtained. Further, the existence of an unresolved pending appeal, for example from the Court of Appeal to the Supreme Court, does not deprive the Court of Appeal’s decision of its binding authority for the time being, nor does a pending appeal to the Court of Appeal deprive a first instance judge’s decision of its persuasive effect for the time being.

There may be circumstances where the existence of a pending appeal in one case may lead the court in another case to adjourn or stay contested proceedings, or to delay giving judgment, where the decision of the appeal court is imminent. But that approach is not adopted as of course and there is in my judgment no reason why the court should officiously adopt it in separate proceedings where the defendants have taken no part, and are in default either of acknowledgement of service or defence.

Nor would it be such a convenient course at the early stage of a reference to the ECJ by the Court of Appeal that it should be followed even in response to an application for default judgment in a separate case on the same facts. The effects of such a reference in a related claim may be said to be twofold. First, it causes the appeal in which the reference occurred to be very substantially delayed, usually (as here) with no intermediate expression of a view upon the merits of the point referred. Secondly, it recognises an uncertainty in the meaning or effect of some part of the European law which underlies the appeal. Those factors might well justify a refusal of summary judgment in a related case, or a stay of a contested claim where the only alternative might be to make a parallel reference on the same question. But in the case of default judgment, where the Particulars of Claim disclose a cause of action which is not obviously bad, the court gives judgment because the defendants do not take the basic steps to challenge it, rather than because the court needs to, and does, resolve every underlying legal or factual uncertainty.

For those reasons I propose to grant default judgment to the claimants substantially in the form of the draft order sought, subject to the alterations (which have nothing to do with the point of principle addressed in this judgment) addressed at the hearing.