77M Ltd v Ordnance Survey Ltd

The claim form in this matter was issued on 19th August and served on 16th September last year. The claim relates to a product developed by the claimant called "Matrix", which is a database of geospatial and other information, which provides the claimant's customers with what it describes as "a sophisticated and comprehensive dataset, giving details of buildings, their coordinates and other attributes." The claimant has apparently spent over £500,000 in developing the product, which it describes as "unique" and "groundbreaking", and it claims that in developing the product, it has licensed data from at least 15 organisations, as well as data provided under the Open Government Licensing Scheme.

By the claim, the claimant seeks declarations and injunctions; in particular, a declaration that the development of its product does not infringe any database or copyright belonging to the defendant, and is not in breach of any contract with the defendant. I should interpolate that the claimant complains that the defendant has failed to explain what rights in the nature of copyright or database rights it holds which may have been infringed by the claimant.

Secondly, the claimant seeks a declaration that the licensing or use of the product by its customers does not infringe such rights or breach any contract with the defendant. It says that if it has used any such rights, there is an issue as to whether it has done so in breach of any licence or agreement with the defendant.

Thirdly, it seeks an injunction to restrain the defendant from making any allegations to the contrary effect, and lastly an injunction to restrain the defendant from instructing third parties to withhold data from the claimant.

The claim appears rather less than straightforward, not only because of the breadth of the claimed declarations and, potentially, because of the nature of the rights which are in issue, but because it raises a number of issues of contract law. In addition, various allegations are made in the particulars of the claim by the claimant that the defendant has been behaving in an inappropriate manner for a public body. It is clear from the witness statements before me on this application that the relationship between the parties is somewhat strained. Both sides complain of the other's conduct of the proceedings to date.

No defence has been filed yet by the defendant. The time for filing a defence was extended by two orders of His Honour Judge Hacon, in October and November last year, although I understand the defendant's position is that the defence was not, in any event, due until late November last year.

The application before me is made by the defendant, which seeks an order that the Controller of HMSO Mrs. Carol Tullo and one of her representatives, namely Mr. Malcolm Todd, be permitted a join a confidentiality club which has already been established by the parties in relation to certain documents designated as confidential in the proceedings. The application is supported by a witness statement, dated 9th December 2016, made by Nicholas Peter Rose, the defendant's solicitor.

The documents include, in particular, a Confidential Annex, Annex 16, to the particulars of claim, which gives details of the Matrix product. This has already been seen by a limited number of people within the defendant's organisation, as well as its legal representatives, subject to the terms of the confidentiality club. A demonstration of the product was also given to members of the confidentiality club by the claimant on 19th October last.

I understand that there is a dispute between the parties as to whether the information given about the product in Annex 16 and given in the demonstration is sufficient for the defendant to understand its scope. In any event, the defendant's position, according to the witness statement of Mr. Rose, is that the defendant has a draft defence and counterclaim which it would be in a position to serve once the position of the Controller is known.

However, the defendant says that it is not able to file its defence and counterclaim until the Controller has had an opportunity to review the confidential documents; these are Annex 16 and the response to it, which has been drafted as part of the draft defence and counterclaim, also a confidential Part 18 request made by the defendant, and the claimant's response to it, and there are some notes and possibly further documents relating to the demonstration which I mentioned.

The reason the defendant says it cannot yet file its defence and counterclaim is as follows: it says that the database rights and copyrights in issue, described in the declaration sought by the claimant as the property of the defendant, are in fact Crown property which is administered by the Controller of HMSO. The defendant is only an exclusive licensee of those rights, pursuant to an agreement called the Crown Rights Agreement, dated 31st March 2015. Clauses 17 and 18 of that agreement require the defendant to advise HMSO when an actionable infringement is identified and where the defendant intends to commence litigation. Each infringement case shall be considered individually in order to establish in whose name action will be initiated. Clause 18 provides that it is for HMSO to determine in whose name an action will be initiated, although in the event that the Controller does not wish to be joined or where HMSO does not consider that legal action is necessary or appropriate, Ordnance Survey will be entitled to commence litigation in its own name, where this is solely to protect the commercial rights of Ordnance Survey. The provision also deals with the question of the costs of the proceedings.

The defendant, therefore, says that in order to bring a counterclaim in these proceedings, it needs to put HMSO into a position where it is able to take an informed decision as to whether it wishes to be a party to the proceedings or, indeed, whether it considers the proceedings to be necessary or appropriate. The defendant contends that the nature of this claim is such that a counterclaim is inevitable, and it appears from the submissions that have been made to me and from Mr. Rose's witness statement, that if HMSO does not wish to bring a counterclaim, the defendant will do so itself.

Mr. Rose says that a defence and counterclaim of sorts can be served if HMSO can join the confidentiality club, but no pleading can be served at all if they are not so joined. The defence and counterclaim cannot be finalised and served until the defendant has had an opportunity to discuss the material facts with HMSO. He says that HMSO wishes to review the case regarding infringement and see all the pleadings, including the draft defence and counterclaim, and needs to do so before they could be served. This seems to me to be right, in the light of the provisions of the Crown Rights Agreement which I have already mentioned.

Mr. Rose's evidence as to the Controller's wish to see the confidential documents is supported by a letter dated 23rd December 2016, written to the claimant's solicitors by the Government Legal Department, and signed by Edward White, and in that letter it is contended that the Controller is entitled to determine whether she wishes to be the claimant in any such action or counterclaim, or wishes to take part in the action only as a non-participating defendant. The Controller therefore supports the defendant's application and, indeed, counsel on behalf of the Controller has attended court this afternoon.

The claimant says that this application has been made too late, long after it should have been brought, and it suggests, to some extent, that this is a delaying tactic on the part of the defendant. Mr. Gore's evidence, on behalf of the claimant, sets out the history of the proceedings, pointing out that the defendant was given a copy of the Confidential Annex on 18th August 2016 and, he says, raised very few questions about it. Mr. Gore set out in some detail the history of the proceedings and complained of the way the defendant has been running them.

The draft particulars of claim were sent to the defendant on a without prejudice, save as to costs, basis in April 2016, and it seems that after some to-ing and fro-ing about the basis on which a draft of Annex 16 was to be supplied, a draft was seen by the defendant in August. Nevertheless, the defendant did not write to the claimant to explain the Crown's interest and the fact that the Controller of HMSO, given her remit of managing copyright and database rights on the Crown's behalf would need to be joined into the confidentiality club, until 23rd November 2016. Mr. Rose said (and this was repeated by counsel), that it had not been anticipated that this request would be controversial, and the request was made before the time for putting in the defence.

The claimant objects to this application on the basis that it is premature and that there is no need to decide whether or not HMSO should be a party until the defendant has served a defence and counterclaim. In particular, the claimant complains that the defendant has not identified the relevant IP rights which may form the basis of its counterclaim. I have not seen all of the correspondence and do not know whether there is anything in there which takes the matter further, but it seems tolerably clear to me that any IP rights that are claimed plainly are going to relate primarily to the INSPIRE Polygons product.

The claimant says HMSO need not be brought into this matter until the defence and counterclaim and a reply have been served, and Mr. Gore says that, not unnaturally, the claimant does not wish to provide copies of the confidential documentation to anyone unless it is essential to do so to resolve this dispute. He contends that the personnel at HMSO do not have the technical knowledge to understand Annex 16 and so the claimant does not understand what advantage would be achieved in providing the documents to them. The claimant's position appears to be that, whilst HMSO does need to understand the proceedings in order to decide whether to join in the defence and counterclaim, it can do that without seeing the confidential information. It is said that there is nothing which would prevent the defendant from consulting HMSO and discussing the case without disclosing any of the technical and confidential details in the confidential documents. The claimant suggests that the defendant should be ordered to serve its defence, with or without a counterclaim, and I should give directions for the future conduct of the action now.

The question of whether I should order the extension of the confidentiality club, as requested, and extend the time for filing the defence and counterclaim, is a matter on which I need to carry out a balancing exercise. That is clear to me from the authorities to which I have been referred by counsel; primarily, the decision of Floyd J in IPCom GmbH v HTC Europe Co. Limited [2013] EWHC 52, and the decision of Mann J in Wobben Properties v Siemens & Ors [2014] EWHC 1967. Mann J cited the most relevant passage of the IPCom judgment in paragraph 14 of his judgment in the Wobben Properties case, which makes it plain that it is necessary to balance the rights of both sides, on the one hand keeping confidential information as confidential as possible, and on the other, making sure that the parties can bring and run their proceedings in a proper manner. He concluded, at paragraph 15:

The trick is for me to balance those interests in this case too. The claimant plainly wishes to keep its commercially very sensitive information confidential, and the defendant wishes to understand what the Matrix product consists of, to be able to discuss this freely with informed personnel at HMSO, and to enable HMSO to take an informed decision.

Mr. Keay has suggested that the authorities which were cited to me do not relate to this rather unusual position, because HMSO is not (and may never be) a party to the proceedings. He says that the peculiarities of the Crown Rights Agreement should not control the position but I should carry out an appropriate balancing exercise. However, he did not contend that there is no power in the court to make an order in the terms which are sought by the defendant.

I accept that this is an unusual case and does not fall directly within the authorities that have been cited to me. However, it seems clear to me that, at the very least, HMSO must be consulted as to whether any counterclaim is to be brought, and I think that the claimant accepts this.

The main point made by the claimant is that it is not necessary for HMSO to see the confidential documents in order to be consulted about the counterclaim or make a decision as to whether it wishes to be involved. It was submitted that HMSO should not see the documents, because it, rather like the defendant, is a competitor, or potential competitor, of the claimant and, moreover, there is always the possibility that HMSO might never become a party to the proceedings.

I do not accept those points. It seems to me that in order to make an informed decision as to whether to become an active party to the proceedings, the Controller will need to see the confidential documents. It is not realistic to expect HMSO to take a proper decision, on proper advice, without having seen the documents. What is in the body of the particulars of claim at present is not sufficient for them to take an informed decision. Equally, whilst the individuals at HMSO who are going to be those within the confidentiality club may require help from their legal representatives to understand the technical aspects of the claim, or may require help from others within the confidentiality club, it seems to me that it would be wrong to expect them to take such a decision without being able to receive complete and informed advice.

Nor do I accept the submission that HMSO is a competitor of the claimant, at least insofar as relates to the rights of which Ordnance Survey is its exclusive licensee. The only question that arose on that point related to a comment made by Mr. Rose, at paragraph 9 of his witness statement, where there is some suggestion that there may be rights in which the Land Registry, as opposed to the defendant, has some interest, but at the moment that strikes me as rather too speculative. I think that the protections that would be put in place by the confidentiality club, which I am sure the parties have negotiated on a sensible basis, would preclude there being any danger of that being misused in any way.

It does not seem to me that there is any reason put forward other than normal caution amounting to a matter of concern as to why the extension of the confidentiality club to the two named personnel might lead to any real risk of the misuse, inadvertent or subconscious, of the claimant's confidential information. No risk of any real kind has been identified.

In addition, it appears to me that were I to accept the claimant's submissions and refuse this application, the defendant would need to file a defence, either without making a counterclaim at all, which it seems to me would not be helpful to either side, or else HMSO would have to make a potentially difficult decision without having seen the necessary documents. That seems to me very unlikely to be a proportionate or acceptable way to proceed with these proceedings, and it seems to me that, were I to accept Mr. Keay's suggestion that, if necessary, parties could be added at a later stage, that would be more likely to cause delay.

If the Controller wishes to bring the counterclaim in HMSO’s name, plainly she will have to be joined as a party to the proceedings. Alternatively, HMSO will be joined as a defendant by the existing defendant, once the counterclaim has been brought. It seems to me inevitable that HMSO will become a party, although I note Mr. Keay's points about the possibility of the court dispensing with the need for them to be a party, pursuant to section 102 of the Copyright, Designs and Patents Act 1988. It seems to me clear that, in the circumstances of this case, HMSO will become a party one way or another, and it appears to me that that is a step which should occur at the earliest possible stage.

I do not accept the claimant's suggestion that this application should be made at or after the Case Management Conference. If there is to be a third party in these proceedings, that party should be joined at the earliest possible stage; most particularly, if that party is going to be the claimant in a Part 20 claim.

I fully understand the claimant's wish to maintain the momentum in these proceedings, but it seems to me that it is likely, in the long run, to save a great deal of time for the confidentiality club to be extended to HMSO in the manner suggested by the defendant now.

On that basis, I propose to make an order in those terms. I will grant a short extension of time for service of any defence and counterclaim, as requested, and I would invite the parties to consider whether there are further sensible directions that could be made at this stage with a view to ensuring that there is no delay if HMSO is going to be joined as a party, one way or another, in one capacity or another.