Copyright Breach Claim Succeeds Despite Dishonesty

In a highly unusual case, an entrepreneur has triumphed in an intellectual property action against an insurance company that used his innovative software package without permission – despite his own ‘manifest and repeated dishonesty’.

The businessman owned the copyright in a ‘scoping tool’ which was used to estimate building repair costs. He had supplied a pilot version of the software to an insurance company (company A) which was subsequently taken over by a rival insurer (company B). Both had made highly successful use of the software.

The businessman’s breach of copyright claim against both companies was initially pleaded on the basis of an alleged written agreement. However, he subsequently accepted that that document was a ‘complete fabrication’ and that a purported signature upon it was a forgery.

Following that concession, he shifted his case to rely on an alleged oral agreement that company A would only use the software for purposes of evaluation and testing. That claim was dismissed by a judge who found that company A had been licensed to make use of the software.

However, the businessman’s claim against company B was upheld on the basis that he had not granted permission for company A to sub-licence the software’s use by its former competitor. There was no evidence as to how company B had come to be permitted access to the software and by whom.

In challenging that ruling before the Court of Appeal, company B argued without success that the licence conferred upon company A had extended to any company in common corporate governance with the same. It was also submitted that insufficient account had been taken of the businessman’s admitted lies and his attempt to put a forged document into evidence.

Describing the case as ‘most unusual’, the Court noted that the businessman had prevailed against company B despite his persistent dishonesty. However, in dismissing the appeal, the Court observed, “The fact that a claimant tells lies does not necessarily lead to the conclusion that the whole of his case is without substance.”

Although the businessman’s dishonesty was fatal to his claim against company A, there was no misdirection or error of law in the trial judge’s conclusion that he had not consented to company B’s use of the software.