Topalsson GmbH v Rolls-Royce Motor Cars Limited

This is an application made by the Defendant in existing proceedings, Rolls-Royce Motor Cars Limited “(RUK)”, for an anti-suit injunction (“ASI”) against the Claimant, Topalsson GmbH (“Topalsson”) in respect of proceedings taken by it in the United States District Court, Central District of California (“the US Proceedings”). The defendants to those proceedings are Rolls-Royce Cars North America LLC (“RNA”), Bayerische Motoren Werke AG (“BMW”), O’Gara Coach Company LLC, Rusnak/Pasadena Corporation, indiGO European Motorcars LLC, Orange County British Motorcars LLC and Westlake Coach Company LLC, collectively “the Dealers”. The Dealers are all companies incorporated in the US and which operate in California, selling Rolls-Royce cars. RUK is an ultimate subsidiary of BMW, a German company based in Munich. RUK’s principal place of business is Westhampnett, Chichester, West Sussex, which is where all Rolls-Royce cars are made. RNA is a Delaware company with its principal place of business in New Jersey. It, also, is an ultimate subsidiary of BMW. RNA is responsible for the sales and marketing of Rolls-Royce vehicles in the US.

By its application for an ASI (“the ASI Application”), RUK seeks to restrain Topalsson from continuing the US Proceedings and also from commencing proceedings anywhere in the world outside England and Wales against RUK or any BMW company or any Rolls-Royce dealer, which include or comprise one or more of a long list of allegations essentially concerned with the infringement of intellectual property rights said to belong to Topalsson.

Accompanying the ASI Application is RUK’s application to amend its Defence and Counterclaim, not merely to seek the injunctions sought on a final basis, but to claim damages for breach of an exclusive jurisdiction clause (“the EJC”) which is a key element of the ASI Application. The EJC is to be found at Clause 44.4 of the written Service Agreement made between Topalsson and RUK dated 11 October 2019 (“the Agreement”). The EJC reads as follows:

The Agreement was for the purpose of the supply by Topalsson to RUK of what is known as a product configurator for Rolls-Royce cars. A configurator allows potential customers to view many different combinations of features of particular models of car using images and videos. This particular project was not a success and RUK terminated the Agreement on 16 and 22 April 2020. It alleged that it was entitled to terminate by reason of numerous breaches of contract on the part of Topalsson including delay and the failure to supply a satisfactory product.

That dispute (“the Main Proceedings”) went to trial in October and November 2022. Shortly after the hearing of this matter before me, and on 12 July 2023, O’Farrell J gave judgment in the Main Proceedings. She found that RUK was indeed entitled to terminate the Service Agreement and awarded damages against Topalsson.

In the meantime, Topalsson had commenced the US Proceedings on 10 March 2023. Originally, they were brought against not only the defendants referred to above but also RUK itself. The original version of the Complaint (“the Original Complaint”) alleged copyright infringement and misappropriation of trade secrets and sought a jury trial.

This led to the making of the ASI Application. Initially, this was put on an interim basis with a hearing set for 28 April 2023. At that stage, of course, the Main Proceedings were still awaiting judgment. O’Farrell J heard the matter on 28 April and decided that it should be dealt with on a final, not interim basis. She therefore adjourned it for a two-day hearing and that is how the matter came before me for trial on 5 and 6 July.

On 23 May 2023, all the then defendants in the US proceedings brought a motion to dismiss them, relying on numerous matters including the existence of the EJC. That motion was due to be heard on 22 June 2023. However, on 14 June, Topalsson filed an amended Complaint (“the Amended Complaint”). This removed RUK as a defendant but also made substantive alterations to the text of the complaint as against the remaining defendants. This led to the hearing set for 22 June being adjourned and a revised motion to dismiss being filed on 28 June (“the Motion to Dismiss”). This will be heard on 18 August 2023. This is where the US Proceedings have got to.

I should add two further elements of the chronology here. First, by letter dated 4 August 2022 from Topalsson’s German lawyers, it initiated a criminal complaint with the Munich Prosecutors Office in Germany (“the German Complaint”). This was directed against a number of individuals said to work either for BMW or RUK. Five of them were to be witnesses in the forthcoming Main Proceedings in London. A further criminal complaint of the same date was also made against Mr Oliver Zipse, the Chairman of BMW’s Board of Management.

The German Complaint alleged that there was a Rolls-Royce dealer in Munich called Schmidt Premium Cars GmbH. During a sales meeting in June 2022 a configurator was used which Topalsson said displayed features of its own configurator software. The German Complaint alleged copyright infringement on the part of the individuals concerned. On or about 25 September 2022, BMW produced a detailed response to the German Complaint (“the German Complaint Response”). Nothing further seems to have happened with the German Complaint. In particular, no criminal charges have been brought.

Second, in a skeleton argument from Topalsson’s Leading Counsel dated 27 July 2022, two days before a further CMC, Topalsson sought to adjourn the Main Proceedings. One of the reasons for this was said to be an intended amendment to plead misuse of confidential information and breach of copyright as against RUK (“the Amendment Application”). It related to a witness statement from Mr Jan-Hendrick Hoffmann served on behalf of RUK. Mr Hoffmann is employed by BMW but works for RUK in its Process Management and Integration Team and is based in Munich. Relevant parts of the skeleton argument are as follows:

In the event, no draft Amended Particulars of Claim was presented and the Amendment Application was not pursued at the further CMC. Neither was the trial adjourned.

The substance of the ASI Application contains two elements:

As to that, Topalsson contends, first, that the Amended Complaint does not give rise to a dispute which falls within the EJC. Second, even if it did, the EJC does not cover disputes involving any parties other than Topalsson and RUK. Third, there is no basis for a non-contractual ASI here.

There is no substantive objection to the amendments sought by RUK. The real question is whether the claims they seek to introduce succeed or not. That being so, I grant permission to amend. It is not necessary at this stage to refer to the amendments in detail. Nor is it necessary to refer to the precise form of the injunction sought on the ASI Application at this stage. I should, however, note that there are also claims for damages made by RUK against Topalsson for breach of the EJC.

For the purpose of the trial before me, there was no live evidence or cross-examination of any witnesses but the following materials are before me:

It is now necessary to refer to the Agreement in more detail. Before turning to its material terms, I can sketch out the background to it by reference to how it was described by O’Farrell J in her judgment on the Main Proceedings (“the Judgment”).

The Agreement provided for the development and supply of digital twin software for a new car configurator. A digital twin is a virtual model of a physical object, existing or yet to be built. Engineers create a computer model of an object, expressed in geometrical and mathematical terminology. The engineering model is converted into a visual representation of the object by a process known as rendering. Software development by written source code enables the visual models to be manipulated using the engineering model data to produce different configurations of the object.

Topalsson is a German company which specialises in the supply to the automotive industry of digital twin engine (“DTE”) and configurator software, which allows prospective customers of an automotive manufacturer to configure and see photo realistic renderings of the vehicles they are considering purchasing. By the Agreement, RUK engaged Topalsson to design, build, implement and maintain digital visualisation software to replace its existing car configurator landscape, in order to improve its customers’ configuring and commissioning experience by allowing real-time generation of images from 3D models, and to support the company’s growth. RUK intended to use the new configurator landscape for the launch of the new Rolls-Royce Ghost model in Spring 2020, and thereafter for sales activities in respect of that model and for the configuring and ordering of other existing models.

The term of the Agreement was just over 5 years, expiring on 31 December 2024. Most of the Agreement is taken up with details of Topalsson’s substantive production and delivery obligations, timelines, plans etc. The Agreement also provided that the relevant Invitation to Tender issued by RUK to Topalsson on 21 May 2019 was deemed incorporated into the Agreement.

However, there were also a number of terms concerned with the ownership of software and related matters. The material provisions are as follows:

Terms dealing with the EJC and related matters are as follows:

This Agreement is for the benefit of RRMC and relevant BMW Group companies.

Save as otherwise expressly provided in this Agreement, nothing in this Agreement shall confer, or is intended to confer, on any third party any benefit or the right to enforce any term of this Agreement under the Contracts (Rights of Third Parties) Act 1999.

Those BMW Group companies that benefit from the Services or Deliverables shall be entitled to enforce the Supplier’s obligations under this Agreement.

I need say no more about the main findings in the Judgment relating to RUK’s right to terminate the Agreement, and the award of damages to it, contractually capped at €5 million.

However, there were some IP-related issues that are dealt with at paragraph 371-395 as follows:

Accordingly, RUK’s position was that since termination of the Agreement, it has no right in order to use the Supplier Software. Indeed none of it was of any use. On the other hand, it did have title to the Deliverables for which it had paid and it had the right to the Bespoke Software.

Points have been made by RUK about the difference between the Original Complaint and the Amended Complaint. I deal with those in paragraph 46 below. However, I focus principally on the Amended Complaint, as this describes the nature and the content of the complaint as it now is.

The Amended Complaint is divided into the following sections:

The main point made in the Introduction, apart from the background, was that RUK had agreed not to use Topalsson’s own DTE, TWIN and Sologic software. It was then said that Topalsson began to suspect that this software had been incorporated into the configurator used to sell Rolls-Royces in the US, which is the largest market. Mr Topal went to the US and saw the configurator in action at various Rolls-Royce dealerships. There were distinguishing features which indicated to him that Topalsson’s software was being used. Paragraph 13 stated:

In other words, this was evidence from which one could infer an unauthorised use of Topalsson’s software and an infringement of its copyright therein.

The Parties section simply dealt with the description of the parties.

The Jurisdiction and Venue section then indicated why, for various reasons, the Court had personal jurisdiction over all of the defendants. Here, it is easiest to start with the Dealers. They were all based in the Central District of California and sold Rolls-Royce cars from their premises using the infringing software. It is not in dispute for present purposes that mere use of a copyrighted software belonging to another without authority is itself an infringement. There is a total of 7 dealers in California and 5 of them are the Dealers in the Amended Complaint.

As for BMW, it made the infringing software accessible to all dealers in the US and therefore induced the infringement by them because it directed the creation of the infringing software to be distributed to and used by the Dealers.

Finally, RNA engaged in substantial activities in California and in the Central District, by distributing all the Rolls-Royce cars which had been imported from England and marketed them there.

As to the Statement of Facts, Topalsson alleged that the digital twin software which handled the production of the final image but also the logic which allows complete customisation was “unique in the industry”.

There are then the following key passages:

I shall refer to all of this software, along with Sologic software Release 6, as “the Relevant Software”. I add Sologic because it seems to have been provided as part of the DTE Software - see paragraph 40 below.

I pause at this point. It will be obvious that the DTE and Sologic software is referred to specifically as part of the Supplier Software within the Agreement. The Vary Software is not, but I did not understand it to be in dispute for present purposes that it, too, constituted Supplier Software though not expressly included in Clause 5 of Section 2.

It is not in dispute that the copyright works referred to in paragraph 34-37 of the Amended Complaint were created in Germany. Accordingly, for the purposes of the Amended Complaint, they were and are “foreign works”. It is common ground that the US is a signatory to the Berne Convention for the Protection of Literary and Artistic Works of 1886 (“the Berne Convention”). This enables owners of foreign works, like Topalsson, to obtain protection in the US (along with other signatories) from infringement.

In the US, Topalsson registered its copyright in the relevant software. As they were foreign works, they did not have to be registered as a pre-requisite to commencing any legal action in the US, but in any event they were. The registrations show that DTE Release 5 had its first publication on 30 June 2018. DTE Release 6 had a first publication date of 30 June 2019. Vary Release 5 had a publication date of 1 January 2018 and its Release 6 was published on 24 January 2019. In all cases, the place of first registration was Germany and they were all registered at the United States Register of Copyrights on 26 January 2023.

The Statement of Facts then moves on to how RUK and others would have gained access to the Relevant Software. Topalsson says that its DTE software Release 5 was delivered on 18 December 2018 and its Vary Software Release 5 was delivered on 14 October 2019 through shared computer folders and BMW’s AWS (Amazon Web Services) platform. Release 6 of both of these was then delivered on 20 February and 18 March 2020. Also, on 17 February 2020, Topalsson delivered its Sologic software which is included in the DTE configurator services.

The allegation then is that the Relevant Software was provided by RUK or BMW to another configurator company called Mackevsion GmbH (“Mackevsion”), a German company based in Munich (now known as Accenture Song Content Germany GmbH) which was a competitor of Topalsson’s. However, Topalsson alleges that the Mackevision product is inferior to its own, and in particular, could not achieve the same level of sophistication of configuration and customisation. Mr Hoffmann was implicated in particular. He was cross-examined on some of this at the trial of the Main Proceedings.

Topalsson then alleges that shortly after termination of the Agreement, a new configurator service was rolled out in Rolls-Royce dealerships in the US which incorporated copyrighted portions of the Relevant Software or contained software derived from it.

The key section on infringement then comes under the heading Count I and it is necessary to rehearse most of it….

In my judgment, it is plain from all of the above that the copyright software which Topalsson claims to have been copied or used to develop the present configurator is highly specific: it is the Relevant Software. It is true that the Introduction explains how Mr Topal became aware (on his case) that Topalsson software was being used. In paragraph 13 (see paragraph 28 above), he is effectively saying that the features which he observed in the configurator he saw could only have come from Topalsson’s software and that Mackevision would not have produced it without recourse to that software. This is therefore an inference he draws from what he observed as evidence to support the alleged infringement. However, it is not about some “other” software of Topalsson that also forms part of the Amended Complaint. That is not to detract from the significance of paragraph 13 which, if correct, would go to support an allegation of either copying the Relevant Software, or at least creating a configurator which was derived from it.

It is also plain that the Amended Complaint does disclose or at least alleges infringing acts in California, that is the use of the software in the configurators in each of the dealerships of the Dealers. These would be infringing acts assuming that the configurator contains software which is copied or derives from the Relevant Software.

Obviously, RUK has been removed and with it, the entire claim for misappropriation of trade secrets which was only ever made against RUK. However, RUK has placed emphasis on the way in which the original case against BMW has changed. The suggestion was that everything that had been alleged against RUK was now simply alleged against BMW as if this were some form of artificial construct. I do not accept this. BMW was always a party and therefore Topalsson always had to make a case for personal jurisdiction and infringement against it. As a comparison between the Original and Amended Complaint shows, there was some additional factual content on BMW in relation to jurisdiction (see what is now paragraph 26). There was also added factual content on infringement - see the new parts of what is now paragraph 60 and also paragraphs 61 and 62. But the allegation in the first paragraph of the original paragraph 59 (now paragraph 60) remains, in terms of BMW, through its agent or employees hiring Mackevision. The deleted section in the original paragraph 59 returns at the end of the infringement section dealing with BMW, at the end of paragraph 62. As far as allegations made against RUK which are also made against BMW, that was true of the Original Complaint as well. See the deleted parts of what was paragraph 59, matters alleged against BMW and the deleted parts of the original paragraph 60, matters alleged against RUK.

Of course, given the terms of the EJC, it is necessary to consider not merely the nature of the claim within the Amended Complaint but also the dispute to which it will give rise - in other words, what defence might be raised by the Dealers. Here there is limited information available from the US Proceedings themselves since no substantive defences have been filed, only the Motion to Dismiss. And of course, the Amended Complaint was itself only filed on 14 June 2023, not long before this trial. Nonetheless, there are a number of indicators as to what the defendants’ defences are likely to be.

First, I refer to paragraphs 36-42 of the Motion to Dismiss. They say that RUK developed a “fallback” in case Topalsson could not deliver a configurator in time, which proved to be the case. The fallback solution was developed in parallel, using Mackevision which was the existing incumbent supplier to the BMW group of companies of 3D images of BMW models. I refer to this as “the Fallback Configurator”. It was derived from a more basic visualiser tool called EVE which pre-existed Topalsson’s involvement. It was less sophisticated than the configurator which RUK wanted from Topalsson. In particular, it did not integrate with RUK’s pricing and ordering systems. Since EVE was based largely on a pre-existing product for BMW, Mackevision did not need much input from RUK. Accordingly, there was no sharing of any of Topalsson software. A logical consequence of that line of defence is that Mr Topal was wrong to draw the inferences he did from what he observed in the US.

The above generally accords with what RUK had said in the Main Proceedings. This was that it was happy to undertake to destroy all copies of the Supplier Software, not least because in any event it was of no use to it.

It is perfectly true that much of the Motion to Dismiss is taken up with jurisdictional points including, of course, the invocation of the EJC. In that regard, much is made of how the US complaint does relate to the Agreement because of its provisions concerning Bespoke as opposed to Supplier Software, licences and so on. But while that section sets out the many questions which, on the defendants’ case, would be raised which relate to the Agreement, little or nothing is said about the defendant’s actual defence.

In this WS, Ms Butcher deals with the Amended Complaint.

At paragraphs 29-33 she makes the point that the Relevant Software had been made available to RUK pursuant to the Agreement. That undoubtedly is true although by itself, it does not really say anything about the defence to the Amended Complaint. It is also said that no source code for the DTE software was ever delivered to RUK, and no executable or installation files or source code was ever made available to any third party by it. That is obviously important from the point of view of any defence.

However, paragraphs 34-36 are also significant. They deal with paragraph 13 of the Amended Complaint, as follows:

Paragraph 35 is important because it seeks to explain how Mr Topal came to see what he did during the operation of the configurator at the California dealerships. It was because it derived from data, information and images which actually came from RUK originally but which Topalsson worked on, pursuant to the Agreement. And in respect of which RUK, not Topalsson, had the relevant intellectual property rights, as provided for by the Agreement. If this is correct, it would go some way to rebutting the inference which Topalsson seeks to draw in paragraph 13. This point is quite separate from the further points made in paragraph 36 of Ms Butcher’s 5^th WS. I should add that the examples given by Ms Butcher as to how the matters referred to in paragraph 35 were explored at trial consisted of the evidence of Mr Litster of RUK and that of Mr Britton, Topalsson’s IT expert. Of course in the end, there was no resolution of the IP issues – see paragraph 24 above.

Something further can be gleaned from the German Response Submission. This is in a context where, according to Ms Butcher, the facts on which the German Criminal Complaint is based are very similar to those pleaded in the Original and Amended Complaints.

An example of this can be seen from the following extract:

This is really the equivalent of paragraph 13 of the Amended Complaint.

According to paragraph 37 of her 5^th WS, the German Response Submission was the product of a careful investigation by RUK and BMW into the allegations of copyright infringement and trade secret misappropriation. Ms Butcher notes at paragraph 37 the following in particular from the German Response Submission:

Although not referred to specifically by Ms Butcher, I should here refer to part of the German Complaint Response, which states as follows:

Clause 23.1 is set out at paragraph 21 above. On a fair reading of this excerpt, BMW is, at least in part, arguing that some of the images/data which Topalsson saw on the configurator and which according to it was evidence of the infringement of its copyright, were themselves owned by RUK/BMW but which Topalsson had obtained under the Agreement. Again, this would be an argument to rebut the inferences sought to be drawn by Topalsson.

It is clearly impossible for me (or even the parties, I should think) to divine exhaustively at this stage the detail of the defence to the Amended Complaint which would be advanced. However, the main elements appear to me to include the following:

Against the background of all those matters, I now turn to analyse the issues before me. I do so by reference to the following questions:

There is no dispute between the parties as to the general approach to be taken to EJCs, certainly in the commercial context, as here. In Skype Technologies v Joltid [2009] EWHC 2738, Lewison J (as he then was) conveniently refers to the relevant principle as follows:

Skype Technologies is also cited by RUK as an example of where the Court held that a non-contractual copyright claim abroad was held to fall within the EJC of a contract being litigated here. It is therefore worth looking at the facts and the decision. Joltid had granted a contractual licence to Skype Technologies to include the object but not the source code of its software, which was critical to the operation of the Skype product. Joltid contended that Skype Technologies had broken the agreement because it was using its source code as well as object code which had been mistakenly provided to it. Joltid purported to terminate the agreement. Skype Technologies denied the breach and claimed that the agreement remained in force. Joltid counterclaimed, alleging repudiation of the agreement and sought a declaration that it had been validly terminated. It also alleged breach of copyright and misuse of its confidential information.

Prior to the trial, Skype Technologies had sold 65% of the shares to US investors. The new owners were required by the sale agreement to continue to operate the Skype product. Joltid brought proceedings in California against Skype Technologies and the US companies who had bought the shares which included Skype Inc. As a result, Skype Technologies sought an ASI here to restrain the proceedings in California on the basis that they were covered by the EJC which read:

Lewison J granted the ASI. In his judgment, he said this at paragraph 18:

Plainly, in that case, the outcome depended on whether the underlying agreement remained in force or not, which was precisely what was being litigated (but not yet tried) in England. The proceedings in California were fundamentally connected with the underlying agreement in that way.

In IBM v LzLabs [2022] EWHC 2094 (TCC), I distinguished Skype Technologies so far as subject matter was concerned. This was not only because the party sought to be restrained was not an express party to the EJC; it was also because while the proceedings here concerned the termination of the relevant software licence the question of the licence was not “at the heart of” the proceedings in Texas. See paragraph 124 of my judgment.

A case at perhaps the other extreme from Skype Technologies is Ryanair v Esso [2013] EWCA Civ 1450. Here, after referring to Fiona Trust, Rix LJ said this at paragraph 46:

On any view, the fact that the agreement containing the EJC may be referred to in the targeted proceedings cannot be enough. Equally the fact that it is necessary background - because without it, the parties would never have dealt with each other - cannot be sufficient either. At the end of the day, it is necessary, in my view, to identify what is realistically likely to be involved in the target proceedings. Only then can the Court consider if the dispute as a whole falls within the EJC, or not. This process is highly fact-sensitive. Beyond those observations, I think it unwise to go. For example, I see little point in trying to summarise or paraphrase the meaning of the expression “arising from in connection with, or related to” used in the EJC. One should simply apply those words. There is no doubt that they are widely drawn.

I have already identified what I consider to be the true parameters of the US Proceedings. From Topalsson’s side, they concern the specific claims for copyright infringement made by reference to the Relevant Software. Those claims emanate from (but are not restricted to) the creation of the configurators used in the Dealers’ showrooms and which BMW accepts have been directed elsewhere, too (including, presumably, Germany).

RUK has already recognised that it cannot use Supplier Software. The Relevant Software appears to include the Supplier Software because it encompasses Releases 5 and 6, although pre-dating the Agreement somewhat (see the dates of registration in the US, referred to in paragraph 39 above). Of course, there is a dispute about the boundaries between Supplier Software and Bespoke Software. It is common ground that the Agreement terminated in April 2020.

I have considered the likely defence to the Amended Complaint in paragraphs 47 - 61 above with a summary of it, as it seems to me, at paragraph 61.

On that footing, it is hard to resist the conclusion that at the end of the day, the issue as to whether there has been any copying or derivation from the Relevant Software by RUK or BMW will be determined largely by expert evidence which analyses both the Relevant Software as against the software used in the Fallback Configurator. Largely but not exclusively, because of the issues arising in relation to the evidence required to rebut Topalsson’s inferential case, discussed above.

Of course, the question of access will arise. RUK denies that it received any usable Relevant Software although Topalsson may not accept this. And it is not in dispute that if there was access to the Relevant Software that is material, it will have occurred by reason of the parties’ engagement with each other under the Agreement and prior to its termination. The other process which will, of course, be examined, is the work done by Mackevision in creating the Fallback Configurator.

At this point I should refer to the expert evidence on the issue as to what the US proceedings will involve and their relation to the Agreement. The latter point of course depends on what lines of defence RUK actually intends to run.

I deal first with Ms Bradley’s report. At paragraph 22, she says that Topalsson would have to prove that it was the owner of the copyrights concerned at the time of the infringement. On any view, such infringement would appear to have commenced around March 2020. She then refers to Ms Butcher’s 4^th WS and the various licences and assignments conferred on RUK by the Agreement. She points to the data which had been supplied by RUK to be worked on by Topalsson. Mr Charlton KC accepted (though he was not guaranteeing the position as he had no instructions on this and the source code had not been reviewed) that it was unlikely that any defendant would contend that the Relevant Software was not a product of the human mind or that the source code is not a fixed tangible medium of expression. As for the other points, they were made in a rather unfocussed way and do not really add to the view of RUK’s likely defence that I have already been able to form.

In paragraph 23, on validity, Ms Bradley makes the point that copyright protection will not extend to non-copyrightable material that is part of the registered work. She then gives a list of examples of such work. But I do not see how the analysis of the “bits” of the Relevant Software that might constitute non-copyrightable works would be assisted by an examination of the Agreement. It is such a process of analysis of the software itself, as indeed she notes at paragraph 23 (b). At paragraph 23 (e), Ms Bradley suggests that RUK may present evidence to establish that Topalsson’s software was not entitled to copyright protection and/or is not the owner of the material alleged to be infringed. But it seems speculative to suggest that RUK will argue that the Relevant Software warrants no copyright protection at all, as already noted. Certainly, RUK will want to allege that Topalsson does not own the material said to be infringing. But that is not because it has disposed of it to RUK under the Agreement. It is because RUK says that Topalsson software was not present at all and RUK (BMW) owns the software behind the Fallback Configurator, being simply a version of EVE made to work with Rolls-Royce cars.

Again, at paragraph 24 Ms Bradley says that:

I am not sure that paragraph 24 (a) is particularly relevant but paragraph 24 (b) is, because it is, in my view, another way of referring to how RUK may rebut Topalsson’s inferential case.

So far as Mr Pooley is concerned, he made the following points:

As to that, I think the position is somewhat more nuanced than Mr Pooley suggests. The question of access may be more complex than simply analysing the material supplied by Topalsson and the communications between the parties especially if one has to take into account material which was initially supplied by RUK then worked on by Topalsson.

In relation to paragraph 32, on the basis that RUK says that it began the process, with Mackevision, of creating the Fallback Configurator before termination, it would not be accurate to say that the Agreement was no longer in force at the time of any of the alleged infringing acts. That might have been significant because of course, there was at least one licence (in relation to Supplier Software) which did not expire until termination. That said, of course, again it is RUK’s case that Supplier Software was not used.

I turn next to the relevance, if any of the Main Proceedings. Of course, the trial before me took place before the Judgment came out, so at trial, one could not tell how much of the intellectual property issues, such as they were, might be dealt with. In the end, whatever debate there had been at trial, O’Farrell J decided not to delve into the detail of the precise boundaries between Bespoke and Supplier Software (which were disputed) and limited the relief she would grant to the declarations and acceptance of undertakings already referred to. So the Judgment itself does not overlap with any of the issues which might arise in the Amended Complaint. RUK has made some reference to the evidence of Mr Hoffmann at the trial of the Main Proceedings. I deal with this separately below.

Next, I turn to the Amendment Application. The point made by RUK here is that originally, Topalsson seems to have thought that the infringement claim (at least as against RUK) should be brought here because that is what it was minded to do, even if it then swiftly changed its mind. And it is fair to say that the Amendment Application certainly said that the proposed claim concerned the “very subject-matter” of the Main Proceedings although in the end O’Farrell J did not deal with the detail of the IP issues. On the other hand, at that stage, the allegation of infringement of copyright was based on the email traffic with Mr Hoffmann. It was not based on what Mr Topal later observed in Rolls-Royce salerooms in California.

Then there is, of course, the fact that the Original Complaint included RUK as a defendant and then RUK was removed following the first motion to dismiss. The point is made that the only reason why this was done was because it was recognised by Topalsson or its lawyers that such a claim by Topalsson was indeed caught by the EJC. I see the force of that, notwithstanding that Mr Lavy KC urged me not to speculate as the reason for that course of action although the actual reason was not proffered on grounds of privilege. Of course, in the end, the scope of the EJC is a matter for me.

There is a further point, raised by Mr Lavy KC. That is that often, an IP owner will sue in more than one jurisdiction to enforce the rights where they have been interfered with. And of course, the whole point of the Berne Convention was to enable the owners of foreign copyright works to invoke the laws of other states to protect against infringement there. And whatever else may be said, the alleged infringement on the part of the Dealers did take place in California. So there is nothing surprising about more than one lawsuit in this context.

As to that, RUK retorts that this prospect of multiple claims is precisely why the rational business person would want to have a “one-stop shop” EJC which would require all such disputes to be decided in one place. I do not think this necessarily follows. For one thing, the relevant evidence may be disparately located. For another, it may be easier for the rights owner to enforce locally, as it were, and there may be impracticalities or jurisdictional issues with bringing all relevant parties here. I accept, though, that RUK’s point has more force if one is simply talking about a claim against it as opposed to one made against third parties.

A related matter concerns the question of the applicability or otherwise of the “Moçambique Rule” which deals with the ability of the Court here to deal with claims concerning the infringement of intellectual property rights which have occurred abroad. Initially, there was a substantial debate about the extent to which the Moçambique Rule would apply where there had been the infringements of the Relevant Software alleged in the Amended Complaint. The point was that if the Moçambique Rule applied, the consequence might be a real restriction on the ability of Topalsson meaningfully to bring those claims here because they would be regarded as non-justiciable. That would, in turn, have an impact on the question as to whether, objectively, it could have been intended that the EJC would not apply to claims such as those made in the Amended Complaint.

In the end, Mr Lavy KC did not really submit that it was clear that the Moçambique Rule would apply here. Rather, he said that the position was not straightforward and at the very least, the Court should for this reason be cautious when considering whether the EJC covered the subject-matter of the Amended Complaint. For his part, Mr Charlton KC submitted that it was clear that the Moçambique Rule could not apply and so there was no need for any such caution. That being the case, it seems to me that I should deal with the point.

The Moçambique Rule is derived from the case of British South Africa v Companhia de Moçambique [1893] Ac 602. Here, the House of Lords held that the English Court had no jurisdiction to hear an action to determine title to, or the right to possession of foreign land or the recovery of damages for trespass to such land. The rule was based on the notion of international comity.

In Lucasfilm v Ainsworth [2012] 1 AC 208, the Supreme Court had to consider whether that rule covered claims brought here for the infringement of copyright which included infringements which had taken place in the US. In summary, and as the headnote records, it held that the common law rule that an English court had no jurisdiction to entertain an action for damages for infringement or invasion of property rights in foreign land did not also apply to claims for infringement of foreign copyrights. There were no issues of policy which militated against the enforcement of foreign copyrights and states had an interest in the international recognition and enforcement of their copyrights. The English court had jurisdiction to entertain a claim for infringement of copyright of the present kind, where the substantial dispute was about the ownership of the relevant copyrights and their infringement rather than about their subsistence, provided that there was a basis for in personam jurisdiction over the defendant. Accordingly, the claimants’ United States copyright claims against the defendants were justiciable.

Lord Walker and Lord Collins, with whose judgment the other Justices agreed, came to those views after a very extensive review of both English and foreign authorities. It is to be noted that at paragraph 103 they said that although at trial the infringement arguments sometimes merged into a subsistence argument “the substantial dispute has always been about the ownership of the relevant copyrights and their infringement rather than about their subsistence”.

Lord Walker and Lord Collins also said this at paragraph 106:

In the light of that, Mr Charlton KC submitted that even if, here, the subsistence of copyright in the Relevant Software was challenged, the Court would still have jurisdiction. He emphasised the fact that the Supreme Court saw a real distinction between patents (where validity essentially depends on a grant which is an act of the state concerned) and copyrights whose subsistence turns on questions of originality and expression etc. I think he is right about that and although the observations made in paragraph 106 were strictly obiter, they would obviously carry substantial weight going forwards. If the matter had to be determined (and in Lucasfilm, it did not), I would be disposed to find that even questions of the subsistence of foreign copyright could be determined here if the Court otherwise had jurisdiction.

In the event, for practical purposes, the question is almost certainly academic, since it is highly unlikely that any point on the subsistence of copyright in the Relevant Software would be taken. And while, perhaps understandably, Mr Charlton KC was ultimately not disposed to undertake that a point on justiciability would not be taken if the claims in the Amended Complaint were litigated here, it would be an extremely odd position for RUK and the defendants to adopt, given RUK’s clear position before me that there is no justiciability problem at all. Moreover, any ASI granted could protect against that eventuality by requiring Topalsson merely to stay the US Proceedings, rather than terminate them altogether. They could then be revived if there arose a justiciability problem here.

For all those reasons, I do not consider that there is a real argument in favour of Topalsson in relation to the subject-matter scope of the EJC based on the Moçambique Rule.

RUK says that the whole question of access is important. I do accept that, especially in the light of Topalsson’s inferential case, there may need to be a careful examination of what passed between the parties for the purposes of the Agreement, and where certain material came from.

RUK also makes the specific point that in order to rebut the inferential case, where some of the features referred to by Topalsson, it may say that they were contained in Deliverables. And if so, Clause 23.1 may be relevant. This, of course, reflects what was said in the German Complaint Response.

Finally, RUK says that the question of source code may also be involved but where it is covered by Bespoke as opposed to Supplier Software. The example given to support this concerns Mr Topal’s observation of one feature which he said was redolent of Topalsson software, namely “simultaneous real-time display on a television screen or projector and a tablet”. At paragraph 40.2, an extract from Mr Topal’s re-examination at trial in the Main Proceedings is provided. This is where he explains the work that was involved in meeting RUK’s requirement that there is not simply a simultaneous display but that there is the ability to have a command-panel on the tablet (presumably operated by the salesperson) which does not appear on the large screen. Mr Topal said that there was a lot of work involved in this. In fact, later in the re-examination at page 23 of Day 7 he then said that:

So it is actually unclear as to whether this concept actually materialised into new or bespoke software, or a deliverable which was ever actually delivered. There is no direct evidence of RUK on this point. I also note that the observed feature recounted by Mr Topal simply refers to simultaneous displays.

I think that the arguments and materials deployed on the issue of the subject-matter scope of the EJC are quite finely balanced. But in the end, looking realistically at the likely shape of the dispute engendered by the Amended Complaint I have come to the view that it is covered by the EJC. There is likely to be specific recourse by RUK to one or more of the terms of the Agreement which deal with intellectual property rights and there will have to be a detailed examination of exactly what transpired between the parties when they were dealing with each other for the purpose of the Agreement. Overall, it seems to me that this is a dispute which does indeed arise from or is in connection with or relates to the Agreement.

In the light of my conclusion above as to the subject-matter scope of the EJC, I must now consider its scope from the point of view of the fact that the defendants to the Amended Complaint are third parties in the sense that they are not, on the face of it, parties to the EJC itself.

There is one case which helpfully refers to all the relevant authorities and which sets out the principles. This is the decision of Andrew Burrows QC (as he then was) in Clearlake v Xiang Da [2019] EWHC 2284.

It is not necessary to elaborate on that summary.

All of this was in the context of ASIs being sought not only by the party to the English EJC, which was being sued abroad. They were also sought by another party, Gunvor, which was also the subject of the foreign claim. They were sought on both the contractual and non-contractual basis. The Judge held that Gunvor was in any event entitled to an ASI on the non-contractual basis and it was therefore unnecessary to decide if it could obtain one on the contractual basis. (I will refer to Clearlake again, below, in the context of the non-contractual ASI sought here).

Nonetheless, it is worth examining the factors which the Judge said were relevant to the question of whether the “starting point” that an EJC does not cover claims against third parties (per Ghossoub) is overridden, as it were:

The EJC itself does not say that it covers disputes involving third parties. It is true that it does not say the contrary, but the “starting point” is based on the lack of express words covering third parties. In this case, it goes further than that. That is because the expression “The Parties” is a defined term. It means only Topalsson and RUK.

I then need to consider Clauses 44.2 and 44.3 recited at paragraph 22 above. Both of these refer to disputes “between the Parties”. RUK accepts that here, the reference can only be to disputes between Topalsson and RUK. In any event, that must be the correct analysis. However, RUK points out that in clause 44.4 the expression “any dispute” is not then followed by the words “between the Parties”. Therefore, it says, the EJC covers non-parties as well.

I disagree. It seems to me that the words “between the Parties” were unnecessary in clause 44.4 because the EJC begins with “The Parties hereby submit”. I do not see any need to repeat the words “between the Parties” in the light of that. So in my judgment, clauses 44.2 and 44.3 support the view that the EJC does not cover third parties.

At this point, it is necessary to refer to those other parts of the Agreement that make specific references to companies other than RUK. Clause 5.2 of Section 7 refers to BMW Group companies. The definition of the latter is RUK and any subsidiary or holding undertaking. I agree with Topalsson that by itself, this provision is rather uncertain, and so one must look for specific clauses thereafter which confer particular benefits.

Clause 10.4 provides a specific indemnity to BMW Group. There are other specific clauses making such references, for example at Clauses 12.1, 12.11, 15.2-15.4, 16.9 and 17.4.

All of that said, the vast majority of the substantive provisions concern (on the RUK “side”, as it were) only RUK. See, by way of example Clause 6.6 (rectification of defects) Clause 7.2 (warranties), Clause 8.3 (Business Continuity Plans), Clause 13 (Delivery, Acceptance and Remedies) and in particular Clauses 13.9, 13.10 and 13.11 dealing with, acceptance, rejection and termination, Clause 23.1 (intellectual property rights) and Clause 25 (Termination). And of course, the actual parties to the Agreement are only Topalsson and RUK.

In my judgment what all of this shows is that where it was thought appropriate to provide a particular benefit to a party other than the Parties, the Agreement did so expressly. It did not do so expressly in the EJC. This was a factor recognised in paragraph 82 (1) of Ghossoub. Second, whatever benefit is conferred on another party has to be considered against the background where most substantive provisions clearly operate only as between Topalsson and RUK.

In the light of the above, but without considering other matters addressed to me, I would conclude that there is nothing thus far to displace the “starting point”; indeed it is reinforced by them.

However, I now need to consider some further matters which may be relevant. The first concerns the extent to which it may be said that although RUK is not now a defendant to the Amended Complaint it could be affected by it. I shall refer to this as “the Joint Tortfeasors Point” even though its significance may run beyond joint tortfeasors strictly so-called. Here, RUK contends that under Californian copyright law, it would be regarded as jointly and severally liable for any infringements committed by BMW and the Dealers. In addition, it would be exposed to claims made by those other parties against it for contribution or indemnity. Here, RUK invokes the obiter observations of Lord Scott in Donahoe and also the analysis of the Judge in Clearlake. It also points to Hornbay where the Court recognised the prospect of contribution or indemnity claims as being pertinent to the scope of the EJC in relation to third parties.

As against that, Topalsson contends that, especially because they are obiter, the observations of Lord Scott should be confined strictly to the particular example he gave talks of misrepresentation which led to the making of the agreement containing the EJC. In Clearlake, of course, no actual decision on the question was made. And as for Hornbay the facts were very different because the third-party was the agent of the party covered by the EJC and the Court regarded them as one and the same. I agree that Hornbay was a very different case, although the prospect of a contribution or indemnity claim was plainly relevant. It was also at least potentially relevant in Clearlake and obviously so, in the example given by Lord Scott.

I would not myself wish to be too prescriptive as to how far the “joint tortfeasors” point can go. But on any view, and given Lord Scott’s observations, even if obiter, it cannot be the case that whenever there is a prospect of a claim against the party which is covered by the EJC, by another party sued abroad, a claim against that party abroad is covered by the EJC without more. And the examples given in both Donohue and Hornbay are clearly very strong examples where the position is particularly clear. So on any view, the issue is highly fact-sensitive.

In this case, as the experts agree, there are different acts of infringement alleged against RNA, BMW and the Dealers respectively, in the Amended Complaint. And the fact that the Dealers are “innocent” does not affect their liability if they have been running infringing software.

As for the likelihood of any claim for contribution or indemnity against RUK by, for example, the Dealers, this received relatively little attention by the experts originally. All Ms Bradley said was at the end of her paragraph 18, namely

Mr Pooley did not deal with it at all.

However, in the course of argument on the first day of trial, RUK produced a Californian case called Desire LLC v Manna Textiles 986 F.3d 1253 (9^th Circuit). This was a decision of the Federal Court of Appeals for the 9^th Circuit. It was relied on by RUK for the proposition that US copyright law would treat RUK and the defendants as joint tortfeasors. Mr Charlton KC said very little about it other than he relied on the following passage in the judgment at page 18 as follows:

Ms Bradley, of course, had not herself referred to or opined on Desire which, it seems, had been found through the researches of Counsel.

RUK relies on this passage to show that in this case, the defendants would be regarded as joint tortfeasors, and RUK (and possibly BMW and RNA though they do not matter for present purposes) would have a legal liability to contribute to or indemnify the Dealers.

This development led Topalsson to obtain a second report from Mr Pooley to deal with this point. This was not objected to by RUK and accordingly it was admitted.

The context for the passage referred to above is that in the underlying case the claimant was seeking statutory damages for infringement of copyright from numerous defendants and in relation to numerous acts of copyright infringement. The Judge in the court below had made multiple awards of statutory damages in respect of a number of defendants and in relation to various acts of infringement. It was in that context that the Judge set out which defendants were and were not jointly and severally liable with each other which then set the scene for the different awards of statutory damages. On appeal, the defendants argued that there should only have been one unitary award of statutory damages. The Court of Appeals held by a majority that the relevant Copyright Act only permitted one award. So the case was remitted on that basis. But absent the operation of the Copyright Act the Judge had been entitled to make multiple awards based on the various joint and several liabilities that she found.

Mr Pooley was of course provided with a copy of Desire, although his 2^nd report did not address it directly. Rather it addressed the general question as to whether RUK and the defendants were joint tortfeasors.

Mr Pooley in his second report said that the expression “joint tortfeasors” could be used in two senses. The first applied to those who acted “in concert” to produce a tortious act. He said that the defendants in the Amended Complaint could not be viewed in that way, because they were each alleged to have committed separate and different infringements (although obviously the nature of the infringement committed by each of the Dealers was the same). RUK was not now a defendant at all, but if it had been, it would not follow that it would be liable to Topalsson simply because one or more of the other defendants would. There would have had to have been an allegation of secondary liability made in the complaint (which was not the case here”.

The second sense of joint tortfeasors related to “concurrent” tortfeasors whose conduct caused an indivisible injury. This is important in the context of statutory damages for copyright infringement because if there was only a single indivisible injury, although a number of tortfeasors, there could only be a single award of statutory damages. Statutory damages are not claimed in the Amended Complaint. Mr Pooley said that RUK and the defendants could not be viewed as joint or concurrent tortfeasors in this second sense. Topalsson was claiming actual damages and accounts of profits which could be determined for each defendant with respect to their own particular act of infringement and profit. It was not a case of a single indivisible injury. And of course Topalsson does not allege the latter.

Mr Pooley does not address, as a separate matter, the incidence of any liability on the part of RUK to contribute to or indemnify any of the defendants. But one can infer from his second report that he would say there was none because it seems to be common ground that such a liability can only arise in the first place if there were joint tortfeasors.

In its Reply Submissions, RUK argues that Mr Pooley has missed the point because he has not looked at how the Original Complaint was framed. That did suggest some concerted action. However, I fail to see the relevance of a Complaint which is no longer being made. Mr Pooley rightly concentrated on the Amended Complaint. A further point made is that Mr Pooley omits to consider the position of RUK even though not a party to the US Proceedings, if any of the defendants chose to issue third parties against it for a contribution or indemnity, much as a defendant might issue a Part 20 claim here. However, Mr Pooley’s main point was not that RUK was now absent from US proceedings anyway; it was that no liability to contribute or indemnify would arise should the Amended Complaint be proved as against any of the defendants.

RUK then adds that it is of course the case that RUK has agreed to indemnify the Dealers in any event. That was voluntary act on its part, though from a commercial point of view, understandable. I can see that, in broad terms, RUK would have an interest in what was occurring in the US proceedings. But that then begs the question as to what weight should be given to that in the context of considering the scope of the EJC by reference to third party defendants to the claim in question. On any view, I do not see that this case is directly analogous either to the example given by Lord Scott in Donohue or the position in Hornbay.

On that basis, it seems unlikely that RUK could be exposed to a contribution or indemnity claim in the context of a range of different infringements of the Relevant Software. But even if there was the possibility of such a claim, this would not be a strong factor here.

RUK of course contends that the “reach” of the EJC extends to the claims made in the Amended Complaint as against all defendants. But RUK also recognises that it is possible that the arguments for inclusion of the claims against RNA and BMW are stronger than, or at least different from those in respect of the Dealers. This is essentially because of the specific references to BMW Group companies in the Agreement. The analysis therefore bifurcates somewhat at this point.

So far as BMW Group is concerned, RUK makes the overarching point that it features significantly in the Agreement and indeed Clause 5.2 of Section 7 states that the Agreement is for the benefit of RUK and “any relevant BMW Group companies.” However, as already indicated, Clause 5.2 needs to be read alongside the more specific provisions.

The specific provision on which RUK focuses, however, is Clause 43.2. Here, RUK argues that this demonstrates that the EJC at least contemplates disputes between Topalsson and BMW. That is not only because such disputes might arise, given the terms of Clause 43.2 itself, but because it was plainly intended that BMW could itself invoke and enforce the EJC in its own name, even though it does not do so here.

I consider first, whether clause 43.2 does give BMW a right to enforce the EJC. That depends on how one approaches Clause 43.2 as a whole. The first point is that it is not entirely clear how one ascertains the BMW Group companies that “benefit” from the Services and Deliverables. Obviously, it includes RUK but the point here concerns BMW. It is not clear if BMW falls within Clause 43.2 at all. RUK says that this is not a problem because it will be a matter of evidence as to which particular BMW Group company has benefited. Perhaps, but that does not help in terms of showing that BMW can invoke Clause 43.2 so as to enforce the EJC or at least argue that it covers claims against it.

Even if one were to assume that BMW could invoke Clause 43.2, there are further difficulties in my view. The purpose of the clause would appear to give the relevant companies some form of redress against Topalsson in the event that there were problems with the Services or Deliverables. However, it does not follow that “the Supplier’s obligations under this Agreement” means all of the obligations, including the obligation to bring proceedings as dictated by the EJC. After all, as we have seen, there are numerous obligations owed to RUK which can clearly only be enforced by it, for example the remedies of rejection and termination. So in reality, the scope of Clause 43.2 must be limited. In my judgment, its scope is limited to substantive obligations affecting the Services and Deliverables provided; even then, there is a limit as to what the relevant company can do about it. Given that, I see no reason why Clause 43.2 confers on BMW the right to enforce the EJC.

It might be thought that BMW should be able to enforce the EJC if it is a beneficiary of Deliverables and Services and if there is a dispute. But on that logic, it should be entitled to enforce Clauses 44.2 and 44.3 as well. But plainly it cannot, because on any view these provisions apply only to disputes between the Parties.

All of the above may make Clause 43.2 of less value than first appears. But that is not a reason to construe Clause 44.4 as permitting BMW, at least, directly to enforce it. That being so, one of the grounds taken from Clause 43.2 saying that the EJC covered claims against BMW disappears.

That still leaves the fact that at least to some extent, BMW was intended to enjoy benefits under the Agreement as well as RUK. I see that, but in my view, taken by itself, it does not “trump” the fact that otherwise, based on its language, the EJC does not cover claims against it.

After all, on RUK’s analysis, while BMW could enforce the EJC against Topalsson, Topalsson could not enforce the EJC against BMW, should BMW choose to sue it somewhere else. That seems very odd, and as Mr Lavy KC put it, “asymmetrical”. RUK’s answer to this is to say that this scenario is artificial and completely unrealistic. I do not see why. BMW is a German company and in principle, it might suit it to sue Topalsson there. Not least because Topalsson is a German company as well. So I think there is something in the “asymmetry” point.

For those reasons, and subject to what I say in relation paragraphs 144-147 below, I do not consider that the provisions which refer to BMW Group companies, and in particular Clause 43.2, are such as to mean that as a matter of interpretation the EJC must cover claims against them.

I now consider the position of the Dealers and why RUK claims that the EJC would include them also. On the basis that it does not include claims against BMW, that proposition may be ambitious but the argument made here really covers both BMW and the Dealers. I shall refer to the particular point made here as “the Global Reach Point”.

It is correct that the purpose of the configurator to be developed for and supplied to RUK was for use in Rolls-Royce showrooms wherever they are, for the benefit of potential customers. In that sense, it was intended to be a global product. But that does not mean that dealers across the world must have been in the purview of the EJC. And from an individual dealer’s point of view, it might well prefer to be sued in its own jurisdiction rather than here. And that is so, even if RUK were assisting it.

Yet again, if it had been intended to bring dealers within the scope of the EJC, it would have been easy to do so expressly. Further, and even though I have rejected the argument which specifically concerns BMW’s position, the Dealers are clearly more remote and have no specific provisions which are relevant to them in the Agreement at all.

So I do not accept that the Global Reach Point assists RUK on the interpretation of the EJC.

The ability (or not) to establish jurisdiction here over the defendants to the Amended Complaint, if Topalsson was obliged to sue them here, has also been raised as an issue. For these purposes, one has to assume that RUK is not also a party to any proceedings here. While RUK submits that this would be unlikely because it would make commercial sense to bring RUK in, I still have to consider the position if it were not.

The question then arises as to whether there are any “gateways” that are clearly available to establish personal jurisdiction over the various defendants.

In this scenario, it would not be possible to join the defendants as “necessary or proper parties” pursuant to PD6B 3.1 (3). This is because there is no anchor defendant against whom jurisdiction will be established in any event.

Another possibility might be PD6B 3.1 (6) (c). This is where the claim is “in respect of” a contract governed by English law, as the Agreement is. The problem here is that even if the Amended Complaint fell within the EJC in terms of matter of subject-matter, it does not follow that it is “in respect of” the Agreement for the purpose of this gateway. At paragraph 173 of my judgment in IBM, I said this:

That observation applies equally here. At the very least, it is not clear that this gateway could be used.

Finally, there is CPR 6.33 (2B) (b). This provides that:

However, that will not work where the defendant sought to be joined is not itself a party to the EJC. I explained why, in detail, at paragraphs 127-136 of my judgment in IBM. In that regard, RUK refers to what I said at paragraph 135 which was this:

However that was all about the scope of the EJC and whether it covered claims against third parties. It was not about whether this gateway was available. I said there that it clearly was not.

So in my view, there are real difficulties with establishing a gateway to bring in the defendants to the Amended Complaint in the supposed putative action here. That militates against interpreting the EJC as covering claims against them.

It is true that the defendants here have agreed to submit to the jurisdiction of this Court and accept service on solicitors acting for them here. But that is not to the point when considering the correct interpretation of the EJC. They may not have done so in the hypothetical I have to consider.

Having taken into account all of the matters referred to above (including, for these purposes, the possibility of a contribution or indemnity claim against RUK – see paragraph 133 above), the conclusion plainly is that this EJC does not cover claims against parties other than RUK itself. In my view, that would be the result whether, as the Judge in Clearlake did, one starts with a presumption against such applicability or whether one simply looks at the question in the round.

Therefore, there is no contractual basis for an ASI here. I therefore turn to consider whether I should grant an ASI on the non-contractual basis.

The foundation for RUK’s argument here is that the EJC would apply as a matter of subject- matter as between Topalsson and RUK. That is the correct way to proceed, and of course it is what I have found. One does not proceed on the basis that there was no operable EJC. The reason why RUK needs to invoke the non-contractual basis is because I have also found that the EJC does not cover claims against the defendants to the Amended Complaint.

I should add that the non-contractual ASI is sought on an “all or nothing” basis. In other words if I were to consider that it should be granted so as to restrain the US proceedings against some but not all defendants, I am not invited to grant a “partial” ASI. In the event, that scenario does not arise.

In relation to this basis for an ASI, in Deutsche Bank v Highland Crusader Offshore Partners LP [2009] EWCA Civ 725, Toulson LJ set out the following principles at paragraph 50 of his judgment:

In Clearlake, the Judge exercised his discretion in favour of granting an ASI on the non-contractual basis. He did so for the following reasons:

The claims made in the Amended Complaint were not in truth the subject of the Main Proceedings and to the extent that they were, the Main Proceedings did not resolve them; see those paragraphs of the Judgment, quoted at paragraph 24 above. So there is no question of relitigating past matters. Indeed, the Main Proceedings have now been concluded, and as matters stand, there are not now going to be any further proceedings here. As the Judgment shows, they were essentially concerned with a failed project which the Court found was due to Topalsson’s breach of contract. The case was not essentially about infringement of copyright, all the more so, given the approach taken to this in the Judgment.

I can see the argument that in practical terms, the principal defendant can be regarded as RUK, in the sense that it (with or without BMW) organised the creation of the Fallback Configurator which is said to be an infringement of Topalsson’s copyright in the Relevant Software; on any view, it was not the Dealers. I also accept that had RUK been sued here, the governing law would have been English law, and had Topalsson succeeded, that would have had the likely effect of stopping RUK from promoting the use the of the Fallback Configurator in its dealership network. But that does not mean that it is abusive to sue Dealers in their own home locations, or RNA in California albeit that its base was in New Jersey.

After all, the infringements alleged against the Dealers did indeed take place in California and the infringements alleged against RNA took place in the US. They are different from the infringements originally alleged against RUK. It is also said that BMW is active in the US, although obviously it is a German company. Here, the allegation is that BMW ensured that the configurator software would be available on AWS instances in and accessible from the US so that the Dealers could access and download that software. And on any view it is the California law of copyright that will have to be applied. Also, the copyright works were German in origin. Topalsson itself is of course a German company.

So far as the Dealers are concerned, there will need to be some evidence about the use of the configurators in California, and indeed (on Topalsson’s inferential case) what precisely Mr Topal observed and the circumstances in which he observed it. Also, there presumably needs to be some evidence of the supply of the software to the Dealers. I agree, however, that evidence would have to come into California from England and Germany because the defendants will rely on there being no “upstream” infringement. I note that at the trial of the Main Proceedings, at least some of the witnesses based in Germany actually gave evidence by video-link from Austria. Evidence from Mackevision, on the creation of the Fallback Configurator, is also likely be required, and Mackevision is based in Munich. I would have thought also that the expert software evidence would come from California on the basis that it would be California copyright law that was relevant. In those circumstances, I cannot see how conducting litigation in California could be viewed as a burden for large commercial corporations like RUK and its parent company BMW. In the light of all of that, I do not accept that England is the clearly more appropriate forum to litigate the dispute engendered by the Amended Complaint. On any view there is a strong connection between the matters the subject of the Amended Complaint and the District Court in California.

I do not accept, as a factor against Topalsson, that the US Proceedings were continued notwithstanding, as it were, that the original claim which was made against RUK as well was withdrawn. As already noted, I cannot see why Topalsson is not entitled to sue dealers using software which it says infringes its copyright in California, and to do so in their own jurisdiction, so as to protect Topalsson’s commercial interests. Equally, there nothing in the points made about how the case against BMW changed as between the Original and the Amended Complaint. See paragraph 46 above.

I should also bear in mind that the US Proceedings arose after Mr Topal had gone to California and observed what was happening in various Rolls-Royce showrooms. In this context, the “territoriality” point becomes relevant again, in favour of Topalsson. In those circumstances, I do not accept that this is a case of Topalsson simply seeking to “manipulate” proceedings or avoid the effects of the EJC.

Nor was it abusive to make the German Complaint. It related to what was observed at the dealer in Munich (and Berlin). Thereafter, it was a matter for the Munich Prosecutor’s Office. I take the same view about the Amendment Application. It was not dealing with any infringement in California.

Generally, I do not see that points of comity all fall away just because the EJC would cover the Amended Complaint as a matter of subject-matter.

While I have accepted that the possibility, for present purposes, of contribution or indemnity proceedings, is factor, it is not a strong one here for the reasons I have given.

It is correct that the defendants have agreed to submit to the jurisdiction here and be served here. However, I do not see that this goes to the question whether Topalsson’s conduct in bringing the Amended Complaint was itself vexatious or oppressive.

Having regard to all of the above, in my judgment, the conduct of Topalsson was clearly not vexatious or oppressive nor does it otherwise warrant the grant of a non-contractual ASI. While the grant of a non-contractual ASI is in any event a matter of discretion, the position here is clearly different from that pertaining in Clearlake.

In those circumstances, I am clear that I should exercise my discretion, (having had regard to the principles governing it) against the grant of a non-contractual ASI.

In the light of these conclusions, it is not necessary for me to enter the debate about the precise form of ASI which was sought by RUK, aspects of which were challenged by Topalsson.

However, since I found that the EJC did bind Topalsson in relation to the Original Complaint made by it as against RUK, it acted in breach thereof, In principle, therefor, RUK may be entitled to damages (any claim for damages not being for this trial). I will hear the parties on how that aspect of the matter should proceed. Subject to that, the ASI Application must be dismissed.

I am grateful to both Counsel for the very helpful oral and written submissions.