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England and Wales High Court (Commercial Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Satyam Computer Services Ltd v Upaid Systems Ltd  EWHC 31 (Comm) (17 January 2008)
Cite as:  EWHC 31 (Comm)
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QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
| SATYAM COMPUTER SERVICES LIMITED
|- and -
|UPAID SYSTEMS LIMITED
Mr David Foxton QC and Mr Ricky Diwan (instructed by Freshfields Bruckhaus Deringer) for the Defendant
Hearing dates: 17-20 December 2007
Crown Copyright ©
The Hon. Mr Justice Flaux:
(1) whether any (and if so which) of Upaid's claims in the Texas proceedings have been finally compromised by Clauses 2.3 and 2.4 of the Settlement Agreement effective as of 31 December 2002?
(2) Whether any (and if so which) of Upaid's claims fall within the scope of the English jurisdiction clause contained in Clause 4 (c) of the Settlement Agreement?
(3) Whether Satyam is entitled to a final injunction as claimed in the Particulars of Claim?
The factual background
"This Assignment is effective as of 1 January 1998 ("Effective Date") and is by and between Satyam Enterprise Solutions, a company registered in India, with an address at 'Mayfair Centre' Sardar Patel Road, Secunderabad 500 003, India, and IN TOUCH Technologies, Limited ("ITTL"), a corporation of the British Virgin Islands, with an address at 8231 CR 500, Pagosa Springs, Colorado 81147, United States of America. Satyam has contractually developed, as works for hire, certain computer software entitled CallManager (comprising SwitchManager and CardManager) and NetManager which is described in the specification and representative portions of the source code thereof attached hereto as Exhibit A ("the Software"). ITTL desires to clarify its ownership of all worldwide right, title and interest in and to the Software, both object and source code and documentation for the code and any mask, works of or for the Software, and all worldwide copyright, patent, trade secrets relating thereto and all other worldwide intellectual property rights therein, including trademark and trade dress pertaining to the Software (the "Intellectual Property Rights").
For good and valuable consideration paid, the receipt and sufficiency of which are hereby acknowledged, Satyam does hereby assign and transfer to ITTL in perpetuity, to endure from now until the end of time, all worldwide right, title and interest in and to the Software, and the Intellectual Property Rights in and to the Software including without limitation (1) all computer code, including object and source code and all documentation thereto and any mask works of or for the Software, (2) all copyright in and to the Software in all media now known or developed in the future, (3) all copyright applications and registrations and the right to seek and hold copyright registration or registrations and comparable rights in all countries throughout the world, (4) the right to seek patent protection and to own all patent applications and Letters Patent or similar legal protection for the Software in all countries throughout the world, including any continuation, division, continuation-in-part, re-examination, renewal, substitute, extension or reissue thereof or any legal equivalent thereof in a foreign country for the full term or terms for which the same may be granted, (5) all trademark applications and registrations in connection therewith, the right to seek trademark registrations and comparable rights in all countries throughout the world, and the good will appertaining to the trademarks and (6) all trade secrets in the Software. Satyam further authorizes and requests the Register of Copyrights of the United States and the Commissioner of Patents and Trademarks of the United States and any officials of any foreign country whose duty it is to issue copyright registrations, patents, trademark registrations or legal equivalents thereto to issue the same for or in connection with the Software to ITTL, its lawful successors and assigns.
Satyam further covenants that Satyam will, upon ITTL's request, provide ITTL with all pertinent facts and documents relating to the applications, registrations, Letters Patent and legal equivalents in foreign countries as may be known and accessible to Satyam and will testify as to the same in any interference or litigation related thereto and will promptly execute and deliver to ITTL or its legal representatives any and all papers, instruments or affidavits required to apply for, obtain, maintain, issue and enforce the applications, Letters Patent and legal equivalents in foreign countries which may be necessary or desirable to carry out the purposes thereof. All costs/expenses on this account will be borne by ITTL. In case Satyam incurs any expenditure on this account, the same shall be reimbursed by ITTL.
This Assignment shall not lapse if the rights assigned to ITTL are not exercised within a period of one year from the Effective Date. This Assignment and the relationship of the parties shall be governed by the laws of New York without reference to conflicts of laws principles. This Assignment supersedes any assignment(s) of the Software from Satyam to ITTL executed prior to the dates(s) of execution of this Assignment."
1.2 "Dedicated Team"
Dedicated Team shall mean a team of Satyam employees that shall work exclusively on ITTL projects and shall predominantly consist of software professionals team with skills necessary for providing the Services.
1.3 "Effective Date of this Agreement"
Effective date of this Agreement shall be the 15th day of September 1998.
1.4 "Intellectual Property"
Intellectual Property shall mean any inventions, discoveries, devices, apparatus, technology of processes, methods, know-how, trade secrets, improvements or other intellectual property rights, including any copyright, patent, patent applications, trademarks, service marks to all Software, Software Projects, Software Products, documentation and equipment, analytical methods, procedures and techniques and computer technical expertise generated by, derived from or used in connection with the Software Products.
Software shall mean the software that results from the Services provided by the Dedicated Team. The comprehensive list of Software is detailed in Annexure 3 attached hereto. Both parties agree to update this Annexure as new software results from the Services from time to time.
1.9 "Software Products"
Software Products shall mean any and all tools and commercial products that result from the Software Projects developed for ITTL. It will however, not include any third party tools and commercial products including those from Satyam ("Other Products") which may be integrated into above mentioned tools and commercial products resulting from the Software Projects.
1.10 " Software Projects"
Software Projects shall mean any and all projects that result from the Services as further defined in Annexures 7 attached hereto. Both parties agree to update this Annexure as new Services are provided through projects from time to time.
6 PROJECT START-UP
For all Software Projects approved by ITTL and agreed upon by Satyam, Satyam shall provide a plan for start-up of the Software Project as per the format detailed in the 'Project Start-up Plan' in attached Annexure 6. At the time ITTL approves the Project Start-Up Plan, Satyam shall deploy a Core Team for project start-up. Core Team shall mean all Satyam employees, besides the members of the Dedicated Team, necessary to meet the staffing requirements as set forth in the Project Start-Up Plan in Annexure 6.
10 PAYMENT AND COSTS
10.3 Terms of Payment:
Satyam and ITTL agree that the payment terms shall be those terms detailed in Annexure 1, subject to the terms and conditions of this Agreement. In case of any delay in payment and if Satyam agrees for such delay, ITTL hereby agrees to pay interest on outstanding amount at the prevailing LIBOR plus 2% applicable to United States Dollars from the due date to the date of actual payment. If Satyam does not agree for such delay in payment, the rights set out in section 11.1 below shall revert to Satyam until all outstanding payments are received. If the payments are not received within thirty (30) days or if this Agreement is terminated by Satyam pursuant to the provisions of Clause 14.15, then Satyam shall be free to market the Software, Software Projects, Software Products on its own.
11.1 Intellectual Property Rights:
All Software developed by Satyam, its employees, and the Dedicated Team shall be considered a "work for hire" under all applicable laws (including, without limitation, the United States Copyright Act), and that all Intellectual Property rights relating to, arising in connection with or otherwise resulting from such work and services, and all Confidential/Proprietary Information as defined in Article 12, shall be the sole and exclusive property of ITTL. If any portion of the work or services to performed by Satyam hereunder is not eligible to be considered a work for hire under the United States Copyright Act, then Satyam shall irrevocably and unconditionally assign and transfer to ITTL, and Satyam does hereby irrevocably and unconditionally assign and transfer to ITTL, all rights to the Intellectual Property relating to, arising in connection with or otherwise resulting from the Services, the Software Projects or resulting Software Products. Satyam further agrees to have its employees execute necessary instruments deemed by ITTL and/or its attorneys or representatives to be necessary to transfer such right, title or interest in the Intellectual Property to ITTL. Satyam shall take all necessary initiatives to protect such Intellectual Property rights. Accordingly, ITTL shall own all right, title and interest in and to the Intellectual Property Satyam agrees to execute and deliver to ITTL any and all assignments and other documents or instruments reasonably requested by ITTL in furtherance of filing and maintaining the applications relating to the Intellectual Property.
Satyam, from time to time, may need to integrate software components sourced commercially from third parties, including Satyam. The intellectual property rights to such software components shall remain with its original owners, but any Software that incorporates portions of such software components shall be owned by ITTL. Satyam shall inform ITTL about such cases as and when they occur.
14 GENERAL PROVISIONS
14.11 Governing Laws and Jurisdictions:
This Agreement, the relationship of the Parties and any disputes relating hereto shall be interpreted, governed and construed by the laws of the Commonwealth of Virginia, United States of America, without reference to the conflicts of laws principles thereof.
14.16 Entire Agreement:
This Agreement together with its Annexures set forth and shall constitute the entire Agreement between ITTL and Satyam with respect to the subject hereof, and shall supersede any and all agreements, understandings, promises and representations made by one party to the other concerning this subject matter herein and the terms and conditions applicable hereto. Also, in case of any inconsistency between the documents constituting the Entire Agreement, this Agreement together with its Annexures would supersede all other documents."
(1) Upaid had a complaint about the quality of the work being provided by Satyam under the Services Agreement not being up to the industry standard.
(2) Satyam was complaining about non-payment by Upaid for work performed under the Services Agreement and claimed that Intellectual Property had reverted to Satyam under the terms of clause 10.3 of the Services Agreement.
(3) Upaid was complaining about the behaviour of Satyam's representative on the Upaid Board, Mr Srini Raju and whether or not he was acting in Upaid's best interests and Satyam had a cross-complaint that he was not being allowed to participate in all aspects of the Board discussions.
(4) Upaid was complaining about Satyam's potential infringement of Upaid's Intellectual Property Rights through the M-Biz Platform which was being offered by a company set up by Mr Srini Raju.
"WHEREAS, Satyam and Upaid had entered into a Services Agreement dated May 19, 1999, as amended by amendment agreements dated August 9, 2000 and April 6, 2001 for provision of information technology services by Satyam to Upaid ("Services Agreement");
WHEREAS, On September 10, 1999, Satyam, ITTL and Joyce entered into that certain Share Issuance Agreement (the "ITTL SIA") pursuant to which ITTL issued to Satyam 833,333 of its common shares (the "ITTL Shares") and Satyam, Upaid, Dunn and Joyce had entered into a Share Issuance Agreement dated September 1, 1999, pursuant to which Satyam is the owner and holder of Common Shares of Upaid ("Share Issuance Agreement" or "SIA") (Unless otherwise indicated by direct reference or by context, references to the SIA shall include ITTL SIA and/or other documents, if any, in relation to the Common Shares held by Satyam for purposes of this Agreement);
WHEREAS, Satyam and Upaid desire to terminate the Share Issuance Agreement and all rights and obligations arising thereunder;
WHEREAS, a sum of USD 337,795 is due and payable by Upaid to Satyam, in respect of services performed by Satyam to Upaid under the Services Agreement and as repayment of advances made by Satyam to Upaid's Indian subsidiary.
NOW, THEREFORE, in consideration of the above and the mutual covenants and agreements contained in this Agreement, and in full and final settlement of the Parties' various rights, obligations and contentions, it is hereby agreed as follows:
2. SERVICES AGREEMENT
(b) Subject to the fulfillment of the conditions precedent set forth in Section 1.4 above, the Satyam Parties agree and state that they have no ownership or rights to the intellectual property developed for Upaid under the Services Agreement, relinquish all claims to the ownership of such intellectual property rights.
2.2 The Parties reaffirm that the Services Agreement is terminated with effect from August 31, 2002, and has no further force or effect, notwithstanding any provisions to the contrary contained in the Services Agreement or in any other document, as to the survival of any provisions of the Services Agreement. The Parties also agree that all electronic mails and other correspondence exchanged between the Parties and any oral agreements to the extent they may exist in relation to the above mentioned Agreement shall also be deemed cancelled and have no further force or effect. Notwithstanding the above, Satyam confirms that Section 12 of the Services Agreement shall survive for a period of one (1) year from the Effective Date.
2.3 Subject to the fulfillment of the conditions precedent mentioned in Section 1.4 above, all rights and obligation of the Parties under the Services Agreement are deemed fulfilled and each of the Upaid Parties on the one hand and the Satyam Parties on the other hand, hereby irrevocably and unconditionally release, acquit, exonerate and forever discharge the other and each of their respective past and present heirs, administrators, beneficiaries, predecessors, successors, affiliates, officers, directors, shareholders, employees, attorneys, agents and representatives from any and all debts, liabilities, claims, obligations, promises, covenants, contracts, endorsements, bonds, controversies, actions, causes of action, judgments, damages, expenses and demands of any sort, either in law or equity, that they had, now have, or hereafter can, shall or may have, from the beginning of time until the execution of this Agreement or hereafter, arising out of or relating in any way directly or indirectly to the Services Agreement including claims relating to representations, warranties, intellectual property rights, quality of services performed, deliverables provided, confidentiality obligations, provision or denial of services or productivity.
2.4 Subject to the fulfillment of the conditions precedent in Section 1.4 above, each of the Upaid Parties on the one hand and the Satyam Parties on the other hand hereby irrevocably and unconditionally agree to forbear from bringing any lawsuit, cause of action, arbitration or any legal action of any nature against the other and their respective past and present heirs, administrators, beneficiaries, predecessors, successors, affiliates, officers, directors, shareholders, employees, attorneys, agents and representatives for any claims or causes of action arising from the beginning of time until the execution of this Agreement or at any time in future, in respect of or relating in any way directly or indirectly to the Services Agreement, including claims relating to representations, warranties, intellectual property rights, quality of services performed, deliverables provided, confidentiality obligations, provision or denial of services or productivity. To the extent that the Satyam Parties or the Upaid Parties have filed any lawsuit, cause of action, demand for arbitration or any legal action of any nature against the other, such filing Party shall immediately file a stipulation of dismissal with prejudice and advise any tribunal where any such filing has been made that the matter has been compromised and settled.
3. INTELLECTUAL PROPERTY RIGHTS
3.1 (a) Subject to Clause 2.1 (c), Satyam agrees that all Intellectual Property (as defined in the Services Agreement) developed for Upaid by Satyam, its employees shall be considered as "work for hire" under all applicable laws (including, without limitation, the United States Copyright Act), and all Intellectual Property rights relating to, arising in connection with or otherwise resulting from such work and services (as defined in the Services Agreement), shall be the sole and exclusive property of Upaid and Upaid shall own all right, title and interest in and to such Intellectual Property.
3.1 (b) If any portion of the work or services performed by Satyam under the Services Agreement is not eligible to be considered a work for hire under the United States Copyright Act, then Satyam hereby irrevocably and unconditionally assign and transfer to Upaid all rights to such Intellectual Property relating to, arising in connection with or otherwise resulting from such work and services. Satyam further agrees that they will use their best efforts to have their employees who were involved in any development projects for Upaid and also continue to work with Satyam in India to execute necessary instruments including Assignments reasonably necessary to transfer such right, title or interest in the Intellectual Property to Upaid. Further, Satyam confirms all assignments of intellectual property rights to Upaid by it and those assignments executed by Satyam employees as co-inventors of Upaid intellectual property and such assignments will survive and shall be governed by such Assignment agreements. Satyam agrees to execute and deliver to Upaid any and all assignments and other documents or instruments reasonably necessary in furtherance of filing and maintaining the applications relating to the Intellectual Property. Satyam hereby agrees not to restrict or hinder in any manner any communication with or access to any persons considered by Upaid or its patent counsel to be "inventors" with respect to its patent and patent applications. All requests from Upaid under this Clause shall be sent to Satyam in writing at reasonable times without causing inconvenience to Satyam or its employees and upon at least 15 days advance notice. Costs if any arising from Satyam or its employees complying with the requests of Upaid under this paragraph will be borne by Upaid.
4 GENERAL PROVISIONS
(a) Entire Agreement.
This Agreement (including the exhibits hereto and any written amendments hereof executed by the parties) constitutes the entire Agreement and supersedes all prior agreements and understandings, oral and written, between the Parties hereto with respect to the subject matter hereof and the SIA and Services Agreement and any other agreements between Satyam and Upaid entered up to date. Except as otherwise expressly provided herein, this Agreement may be modified or amended only by a writing signed by duly authorized representatives of each Party. The waiver by any Party of any default or breach of this Agreement, or any obligation hereunder, shall be ineffective unless in writing, and shall not constitute a waiver of any subsequent breach or default. No failure to exercise any right or power under this Agreement or to insist on strict compliance by the other Parties shall constitute a waiver of the right in the future to exercise such right or power or to insist on strict compliance.
(c) Governing Law. This Agreement and all transactions contemplated hereby shall be deemed to be made under, and shall be governed by, and construed in accordance with, the laws of England, without regard to principles of conflict of laws. Any and all disputes arising out of or relating to this Agreement shall be brought in a court of competent jurisdiction in London, England and the Parties irrevocably submit to jurisdiction and venue in London, England. If any term of this Agreement is held invalid, illegal or unenforceable by a court of competent jurisdiction, such terms shall be reduced or otherwise modified by such court to the minimum extent necessary to make it valid and enforceable. If such term cannot be so modified, it shall be severed and the remaining terms of this Agreement shall be interpreted in such a way as to give maximum validity and enforceability to this Agreement."
i) a declaration as to the validity of the patents;
ii) damages for Satyam's alleged fraud and/or forgery and/or misrepresentation in providing documents containing forged signatures;
iii) damages for Satyam's alleged breach in 1999 of the covenant contained in the third paragraph of the Assignment Agreement.
The first preliminary issue: are the claims in Texas precluded by the Settlement Agreement?
Was the Assignment Agreement superseded by the Services Agreement?
37.1 The assignment and transfer effected by the second sentence of clause 11.1, despite the accidental omission of the word "be", clearly relates only to intellectual property rights in respect of "work or services to [be] performed by Satyam hereunder" in other words work or services to be performed under the Services Agreement after its effective date of 15 September 1998, which by definition cannot include intellectual property rights already assigned pursuant to the Assignment Agreement and which did not need to be assigned again by the Services Agreement.
37.2 This is confirmed by the later words of the same sentence: "Satyam shall irrevocably and unconditionally assign and transfer to ITTL, and Satyam does hereby irrevocably and unconditionally assign and transfer to ITTL, all rights to the Intellectual Property relating to, arising in connection with or otherwise resulting from the Services, the Software Projects or resulting Software Products". The obligation to transfer in the future "shall assign and transfer" and the acknowledgment of transfer "hereby" i.e by the Services Agreement is hardly consistent with that transfer or assignment having already taken place pursuant to the Assignment Agreement. Rather, it is consistent with the transfer and assignment being of intellectual property rights as at 15 September 1998 to the extent not already transferred and assigned by the earlier Assignment Agreement, together with an undertaking to transfer and assign future rights as they arise.
37.3 The fundamental point that the assignment under clause 11.1 of the Services Agreement is of work to be performed on and after the effective date is reinforced by other provisions of the Services Agreement referred to in that clause, as quoted in the previous sub-paragraph. Thus the definitions of "Services", "Software Projects" and "Software Products" are all looking forward to the services to be performed under the Services Agreement.
37.4 In his submissions Mr Boswood contended that the closing words in the definition of "Intellectual Property" in clause 1.4: "generated by, derived from or used in connection with the Software Products" refer back to the totality of the clause, not just the immediately preceding words "computer technical expertise". I consider that he is probably correct about this as a matter of ordinary language (despite the suggestion on behalf of Upaid that this renders the clause partially circular). Mr Boswood then went on to argue that the Intellectual Property which could be "used in connection with the Software Products" could include Intellectual Property which was in existence before the Effective Date. As a matter of logic and language this may well be right and if clause 1.4 stood in isolation, this argument might go some way to supporting Satyam's argument that the Services Agreement covered Intellectual Property already in existence as well as that coming into existence on and after the Effective Date. However, clause 1.4 does not stand in isolation and the clause which deals with Intellectual Property Rights, namely clause 11.1, is clearly forward looking for the reasons already given above. Nothing in the definition clause 1.4 seems to me to begin to detract from or alter the meaning and effect of the substantive provision in clause 11.1.
37.5 By contrast, the rights assigned by the Assignment Agreement clearly related to work and services performed by Satyam before 11 September 1998, otherwise there would have been nothing capable of assignment and transfer under the Assignment Agreement at that date. Although Upaid at one stage alleged that the Assignment Agreement also applied to the assignment of future intellectual property rights not in existence at the time of the Agreement, that case was abandoned and, at trial, it was accepted that the Assignment Agreement relates and can only relate to such rights in existence as at 11 September 1998.
37.6 Accordingly, in my judgment, contrary to the submissions advanced on behalf of Satyam, there is no overlap between the intellectual property rights protected by the Assignment Agreement and those protected by clause 11.1 of the Services Agreement and the subject matter of the two provisions, although similar, is different.
The correct construction of the Settlement Agreement
Clause 3.1 (b)
Clauses 2.3 and 2.4
"...such words ['connected…in any way'] indicate an intention that the concept of connection should be broadly construed. But they cannot be read literally, or else they will include connections such as Fluellen found between Harry Monmouth and Alexander of Macedon:
'There is a river in Macedon and there is also moreover a river at Monmouth ...and there is salmons in both.'
It is therefore still necessary to limit the connections to those which are relevant for the purpose in hand".
"But a long and in my view salutary line of authority shows that, in the absence of clear language, the court will be very slow to infer that a party intended to surrender rights and claims of which he was unaware and could not have been aware. [He then cites the relevant authorities, beginning with the judgment of Lord Hardwicke LC in Cole v Gibson (1750) 1 Ves Sen.503, 27 ER 1169 and concludes at paragraph 17]
In his judgment in the present case Sir Richard Scott V-C held (in paragraph 22 of his judgment):
"In my judgment, there are no such things as rules of equitable construction of documents."
Buxton LJ (in paragraph 88.4 of his judgment) agreed with the Vice-Chancellor's proposition. I also agree with it. More than a century and a quarter have passed since the fusion of law and equity and it would be both destructive of that great reform, and altogether anomalous, if it were not correct. But acceptance of that proposition should not lead one to regard the authority cited above as spent, or as a dead letter. Some of the cases, I think, contain statements more dogmatic and unqualified than would now be acceptable, and in some of them questions of construction and relief were treated almost indistinguishably. But I think these authorities justify the proposition advanced in paragraph 10 above and provide not a rule of law but a cautionary principle which should inform the approach of the court to the construction of an instrument such as this. I accept, as my noble and learned friend Lord Hoffmann forcefully points out, that authorities must be read in the context of their peculiar facts. But the judges I have quoted expressed themselves in terms more general than was necessary for decision of the instant case, and I share their reluctance to infer that a party intended to give up something which neither he, nor the other party, knew or could know that he had."
"Two points of particular importance on which all of their Lordships were agreed emerge from the speeches. The first is an insistence that the same approach is to be adopted when construing a general release as when construing a contract of any other kind. No special rules apply. The second is the emphasis which all their Lordships placed on the importance of the context in which the release is given. However wide the language in which it is cast, it is always necessary to understand the context in which a release was agreed in order to decide what the parties intended its true scope to be."
"Mr. Kendrick submitted that the parties cannot have intended to compromise claims for misrepresentation or breach of warranty based on fraud, both because of the fact that they were grounded in fraud and because they were claims whose existence was unknown at the time. In my view, having regard to the context in which the parties entered into the settlement agreement and the language in which they expressed themselves, it was their intention that Western Star should be discharged from any further liability under section 4.1 of the Share Purchase Agreement, whether the possibility of a claim was known to MN at the time or not. I find it more difficult to say that they intended to release Western Star from liability for claims arising out of its own fraud, however. I am satisfied that neither party had the possibility of fraud in mind. As Rix L.J. said in HIH Casualty and General Insurance Ltd v Chase Manhattan Bank  EWCA Civ 1250;  2 Lloyd's Rep 483 at page 512, fraud is a thing apart because parties contract with one another in the expectation of honest dealing."
"General words, however comprehensive the legal analyst might find them to be, will not serve: the language used must be such as will alert a commercial party to the extraordinary bargain he is invited to make".
The Entire Agreement in clause 4 (a)
The second preliminary issue: Do any of Upaid's claims fall within the scope of the English jurisdiction clause contained in Clause 4 (c) of the Settlement Agreement?
"...the court has no jurisdiction to entertain an action for (1) the determination of the title to, or the right to possession of, any immovable situate out of England (foreign land); or (2) the recovery of damages for trespass to such immovable".
"We do not find it necessary to decide whether Mr Justice Vinelott was correct to take the view (if he did) that an action for alleged infringement of a foreign copyright by acts done outside the United Kingdom in a state not party to the Brussels Convention, in a case where no question as to the validity or registration of the right was in issue, was not justiciable in an English court. It is important to keep in mind that the question which he actually had to decide was whether to make a declaration that the defendant had no rights under the copyright, unfair competition or trademark laws of the United States which would be infringed by what the plaintiff was proposing to do. He was invited to investigate the existence and validity of the rights claimed; not to decide whether there had been an infringement of rights the existence and validity of which were not in issue. He was, in our view, plainly correct to refuse to make the declaration sought, for the reason given in the penultimate paragraph of his judgment:
'In the instant case there is no evidence that, if the validity of the rights claimed were justiciable in the English courts, the decision of the English courts would be treated as binding on any of the states of the United States of America and it would in my judgment be an exercise in futility to allow these claims, which raise complex issues which may require a survey by the English courts with the assistance of experts of the laws of each of the states of the United States of America, to continue.'
We can derive little or no assistance from the decision in the Tyburn Productions case on the question whether an action for alleged infringement of a foreign copyright by acts done outside the United Kingdom, in a case where the existence and validity of the right is not in issue, is justiciable in an English court; and no assistance from that case where the question arises in the context of acts done in a contracting state."
"The principles which applied to land in the Moçambique case apply equally well to attempts to litigate foreign intellectual property rights in English courts. Those rights give rise to monopolies or quasi-monopolies which are strictly territorial in nature. In the case of patents, historically their purpose was to encourage and protect local industry. So courts following the common law tradition have declined to entertain actions concerned with the enforcement of foreign intellectual property rights; see Potter v. Broken Hill Pty. Ltd. (1906) 3 C.L.R. 479 and Tyburn Productions Ltd. v. Conan Doyle  Ch. 75. In Plastus Kreativ A.B. v. Minnesota Mining and Manufacturing Co.  R.P.C. 438, 447, Aldous J. explained some of the reasons why he was not attracted to the task of adjudicating here on foreign intellectual property, and particularly patent, rights:
"For myself I would not welcome the task of having to decide whether a person had infringed a foreign patent. Although patent actions appear on their face to be disputes between two parties, in reality they also concern the public. A finding of infringement is a finding that a monopoly granted by the state is to be enforced. The result is invariably that the public have to pay higher prices than if the monopoly did not exist. If that be the proper result, then that result should, I believe, come about from a decision of a court situated in the state where the public have to pay the higher prices. One only has to imagine a decision of this court that the German public should pay to a British company substantial sums of money to realise the difficulties that might arise. I believe that, if the local courts are responsible for enforcing and deciding questions of validity and infringement, the conclusions reached are likely to command the respect of the public. Also a conclusion that a patent is infringed or not infringed involves in this country a decision on validity as in this country no man can infringe an invalid patent. In the present case the plaintiffs admit the validity of the patent and therefore there is no dispute upon the matter. However, it will be implicit in the judgment of this court that there has been infringement, and that, between the parties, the patent is valid. Thus, I believe it is at least convenient that infringement, like validity, is decided in the state in which it arises.""
Third preliminary issue: injunction