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England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Filmflex Movies Ltd v Piksel Ltd  EWHC 426 (Ch) (24 February 2015)
Cite as:  EWHC 426 (Ch)
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Rolls Building, London, EC4A 1NL
B e f o r e :
| FILMFLEX MOVIES LIMITED
|- and –
for the Claimant
Guy Philipps QC and Deepak Nambisan (instructed by Olswang LLP) for the Defendant
Hearing dates: 17 and 18 February 2015
Crown Copyright ©
Mrs Justice Rose DBE:
The business of the parties
""Company Platform" the online platform with the technical and functional capabilities set out in the Source Control Database on and post the Identified Date
"Company Platform Materials" all software, data, text, graphics, sounds, other materials and all Intellectual Property Rights subsisting therein or relating thereto designed, developed or created specifically for the Company (excluding Third Party Software), from the Identified Date
"the Company Materials" all software, data, text, graphics, still or moving images, sounds and other materials supplied by or on behalf of [the] Company for use in development of the Platform, in connection with this Agreement and/or provision of the Services
"ioko365 Materials" all data, text, graphics, sounds and other materials used or supplied by ioko365 in the course of providing the Services, but excluding software and materials which are obtained for the Company from a third party and excluding Company Platform Materials
"ioko365 Platform" the online platform with the technical and functional capabilities set out in the Source Control Database as at the Identified Date
"Platform" both the ioko365 Platform and the Company Platform
"Services" the supply of Outputs and the performance of Tasks and Operational Services
"Source Code" the source code of all the modules and components comprised in the relevant software in human-readable form and in such form that it can be compiled or interpreted into object code together with all technical information and documentation (including all specifications, input and output formats, algorithms and file structures) that are necessary for the use, reproduction, modification and enhancement of such software or have been used for such purposes
"Source Control Database" a document detailing the timeline, codebase and code of iterations of the changes to the Platform"
"9.1 For the purposes of this Agreement only and subject to clause 9.4, all Intellectual Property Rights in the ioko365 Materials and the ioko365 Platform belong to ioko365. ioko365 grants the Company a perpetual, royalty free, non-exclusive, non-transferable, irrevocable licence to run, use, access, maintain, modify, enhance, copy and create derivative works of the ioko365 Materials, ioko365 Platform and all associated documentation, as applicable, throughout the world (and permits its subcontractors to do the same for the sole purpose of providing services to the Company).
9.2 All Intellectual Property Rights in the Company Materials, the Company Platform, the Company Platform Materials and Company Data belong to the Company. The Company grants ioko365 a non-exclusive, non-transferable, revocable licence during the term of this Agreement to use, copy, access, maintain, modify, enhance and create derivative works of the Company Materials, Company Platform Materials and Company Data for the sole purpose of delivering the Platform to the Company and delivering the Services."
"9.7 ioko365 shall ensure that (i) the Source Code for all ioko365 Materials, Company Platform Materials, and Third Party Software (other than off the shelf software), and (ii) the Source Control Database, is placed in escrow with NCC Escrow International Limited (…) (the "Escrow Agent") on the Company's request and at the Company's cost within 60 days of the Commencement Date. The Company, ioko365 and the Escrow Agent shall enter into a three-party source code escrow agreement in the agreed form (incorporating such amendments as the Escrow Agent may reasonably request) (the "Escrow Agreement") in respect of the ioko365 Materials, Company Platform Materials and Third Party Software (other than off the shelf software) and the Source Control Database. The service of a Termination Notice shall be a release event for that Source Code or Source Control Database under the relevant Escrow Agreement.
9.8 ioko365 shall ensure that all Source Code or Source Control Database placed into escrow under this Clause 9 is updated whenever there is a material change to that Source Code and, in any event, at least once every three (3) months."
"9.10 The trigger events for release of the Source Code or Source Control Database under the Escrow Agreement are:
9.10.1 termination of the Agreement by either the Company or ioko365, or ioko365's material or persistent breach of this Agreement;
9.10.2 termination by the Escrow Agent of the Escrow Agreement;
9.10.3 the insolvency of ioko365;
9.10.4 a change of Control of ioko365; or
9.10.5 the appointment by the Company of a third party to provide any part of the Services or any other services in relation to the Platform, the ioko365 Materials or the Company Platform Materials"
"9.11 In addition to the trigger events set out in Clause 9.10, ioko365 acknowledges and agrees that the Company will have access to the Source Code (and ioko365 shall reasonably co-operate in the provision of such access) throughout the term of this Agreement upon the Company's request."
"the Source Code of the Package and such other material and documentation (including updates and upgrades thereto and new versions thereof) as are necessarily to be delivered or deposited to comply with clause 2 of this Agreement"
i) If the Owner is a company, the winding up of, or appointment of an administrator for, the Owner or where the Owner enters into a compromise with its creditors or has a receiver appointed;
ii) If the Owner is an individual, the death or bankruptcy of the Owner or where the Owner enters into a compromise with his creditors;
iii) If the Owner is a partnership, where any of the partners are declared bankrupt or compromise with their creditors or the partnership is wound up or dissolved;
iv) Where the Owner ceases to carry on its business or the part of the business which relates to the Package;
v) Where the Owner assigns its rights in the Material to a third party and that third party does not adopt the Escrow Agreement; or
vi) Where the Owner is in material breach of its obligations to keep the Package up to date.
(a) The application of clause 9.10.5 of the MSA
i) The terms of the Escrow Agreement were based on NCC's standard printed terms and conditions provided to the parties by NCC.
ii) They were provided to the parties and were in their possession while the MSA was being negotiated. Clause 6 was in its present form at the time the MSA was signed in June 2012.
iii) Although there were some email exchanges and discussion about changes to the NCC standard terms subsequent to the execution of the MSA, there is no evidence of discussion or negotiation about the scope of the release events in clause 6 or the differences between those release events and the trigger events included in clause 9.10 of the MSA.
iv) There is certainly nothing in the evidence to indicate to an objective observer that the parties intended, when the Escrow Agreement was signed, that the only circumstances in which FilmFlex could obtain the release of the material from the Escrow Account were those included in NCC's standard terms.
(b) Clause 9.11
(c) Clauses 9.1 and 9.2