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England and Wales High Court (Technology and Construction Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Technology and Construction Court) Decisions >> Cyprotex Discovery Ltd. v University of Sheffield  EWHC 760 (TCC) (21 February 2003)
Cite as:  EWHC 760 (TCC)
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QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
133-137, Fetter Lane,
London, EC4A 1HD
B e f o r e :
|Cyprotex Discovery Limited||Claimants|
|The University of Sheffield||Defendant|
|Date of Hearing: 16 - 18 and 20 September 2002|
|Date of Handing Down of Judgment in Open Court: February 2003|
Mr Antony Watson QC and Mr Aubrey Craig appeared for the defendant instructed by Keeble Hawson, Protection House, 16-17 East Parade, Leeds, LS1 2BR, DX: 12043 Leeds 1, Ref: EMW/SJD/S2717/41
HTML VERSION OF JUDGMENT
Crown Copyright ©
Copyright in a Java-based software program partly adapted and derived from an earlier MathCAD-based program. Interpretation of uncertain and potentially nonsensical terms of a commercial contract and effect of ICS v West Bromwich Building Society and United Camp Chemicals Limited v ACE Insurance; retrospective effect of a contract and effect of Trollope & Colls v Atomic Power Station and Northern & Shell Plc v John Laing Construction Limited; retention of copyright and Warwick Film Production Ltd v Eisinger; joint authorship and Fylde Microsystems Ltd v Key Radio Systems Ltd and implication of terms governing copyright and Ray v Classic FM.
1. Background to the Dispute
2. The Relevant Factual Background
2.1. Technical Background
1. Pharmacokinetic model
2. Trial management software
3. Population model
4. Random number generation
5. Graphical user interface or Gui.
"Q. ... the similarities between the MathCAD programs and the Java classes which you have identified in your report are simply this, that both sets of programs carry out the same task, or at least have programs in them to carry out the same task, by reference to the same algorithms and equations?
A. Yes, that has to be true.
Q. So it is the function of the software which is common to both?
A. Well, they contain the same algorithms.
A. So, yes.
Q. They are there to perform equations and the same equations are there in both?
2.2. Use of the Word "Simcyp"
2.3. Factual Background
"In the same way as the aircraft industry carries out extensive simulations of how a new plane would perform, the Virtual Human would be an immensely valuable tool for improving the design of safe and effective drugs at lower cost than is currently the case."
Professor Tucker stated, showing that Simcyp was not unique:
"Whereas the aircraft industry has used computer simulation to evaluate the performance of its products (aircraft) before they are built (and fly) for many years, the pharmaceutical industry has been slow to apply a similar principle to the evaluation of its products (drugs) before they are tested in humans for the first time. Simcyp is one of the first systematic attempts to do this: and does it uniquely with respect to incorporating information on in vitro human drug metabolism." (emphasis added)
"JR spoke with David Leahy. Due to difficulty of employing a suitable candidate they would still prefer to be the employer. They have no problem with IP going to Uni. Simply see the project as conversion of IP software to a more marketable format. See the involvement of other parties as feedback from customers to develop the programme for their needs. Support they will provide is in kind support. They want first option for an exclusive license to market - with a royalty return."
2.4. The Cyprotex Division of Medeval Ltd and Cyprotex Ltd
"I recall that David Leahy made it clear that he was representing Cyprotex and not Medeval and that Cyprotex was a separate operating division from Medeval. David Leahy suggested that Cyprotex were about to split away from Medeval and was looking for outright investors to assist in this process. ... Therefore I made no reference to Medeval in any of the draft Research Agreements that I sent to David Leahy and I was not corrected on this point with any of the subsequently amended agreements which I later sent to Cyprotex."
2.5 The Development of the Simcyp Software
Q. ... So far as the Java coding was concerned, that, in the year 2000, was Cyprotex's responsibility, was it not? You did not know anything about Java coding. You left it entirely to Dr Edwards?
A. That is right.
Q. He had complete control over how it was written, what he incorporated into it, and the degree of re-usability which he wrote into it for other programs within Cyprotex's software?
A. That was part of his job, yes.
Dr Rostami also acknowledged in his evidence that Dr Edwards had designed the graphical user interface on his own. Dr Rostami's principal input was in the specification drafting process in defining what the graphical output should be.
2.6 Breakdown of Relationship
2.7 The Parties' Future Intentions
4. The Research Agreement
"RESEARCH AGREEMENT between the University of Sheffield, and 'The Sponsors' ... . WHEREAS, the research programme contemplated by this agreement is of mutual interest and benefit to the University and to the Sponsors
NOW THEREFORE, the parties agree as follows:
1. SPONSORS. As listed in Appendix 2.
2. STATEMENT OF WORK. The University shall perform the "Programme of Research" entitled "SIMCYP - a Windows Based Simulation Program to Assess the Likelihood of Metabolic Drug-Drug Interactions from In-Vitro Data as described in Appendix 1. The University agrees to liaison meetings with the Sponsors as mutually acceptable to provide project progress information.
3. PRINCIPAL INVESTIGATORS. The research will be conducted by Dr Amin Rostami, Professor Geoff Tucker and Dr Martin Lennard.
4. PERIOD OF PERFORMANCE. Notwithstanding the date of this agreement, the "Programme of Research" shall be conducted during the continuous period of 12 months starting not later than 1 March 2000 unless otherwise agreed and will be subject to renewal only by mutual agreement of the parties.
5. PAYMENT AND PRICE. The Sponsors will pay the University the sums as set out against the relevant Sponsor's name in Appendices 3, 4, 5, 6 and 7.
6. TERMINATION. Each Sponsor may withdraw from this agreement upon sixty days written notice given to the University and the other Sponsors. This agreement may only be terminated by the University upon reasonable notice and as soon as practicable as soon as it has been determined that circumstances beyond its control make continuation of the Programme of Research impossible on the basis contemplated by this agreement. In the event that all Sponsors withdraw from this agreement and it is terminated, the University will be reimbursed for all reasonable costs contemplated by this agreement ... and each Sponsor shall only be responsible for a proportion of such approved costs commensurate with the proportion of that Sponsors's payment of the total project cost as set out in the financial appendices and in any event, no Sponsor shall be liable for such incurred costs in excess of that Sponsor's agreed payment as set out in the financial appendices nor shall the University be entitled to any payment in excess of the total payment in excess of the total project price specified in Article 5 and the financial appendices. …
(a) The University will exercise reasonable skill and care to ensure the accuracy of the advice, information and drawings provided in connection with the Programme of Research but the University will not accept any liability whatsoever in respect of any claim or claims arising from the use by the Sponsors or by any third party of any such advice, information or drawings.
(b) The University shall use its best endeavours to ensure that it will not infringe any third party rights in performance of the Programme of Research and the rights granted to the Sponsors herein. ... the University does not accept any responsibility whatsoever for infringement of such rights.
8. SCIENTIFIC PUBLICATION The Sponsors recognise that the University will wish to publish certain papers, articles, books, pamphlets or published material which makes reference to or contains material arising from the Research Programme and it is the Sponsors intent not to hinder the normal exchange of scientific information which occurs in journals or at scientific meetings. The University agrees that the written permission of each Sponsor will be obtained before such publication or disclosure and the Sponsors will respond to such written requests within 60 (sixty) days of receipt thereof. Such permission will not be withheld longer than is necessary to enable arising intellectual property to be protected and in any event not longer than six months from the date of the University's request for permission to disclose. Title to and the right to determine the disposition of any copyrights or copyrighted written material first produced or composed in the performance of this research shall remain with the University, provided that the University hereby grants to the Sponsors an irrevocable, royalty-free, paid up, non-exclusive right and licence to reproduce, translate and use all copyright material for its own purposes. The Sponsor has the right to assign such aforesaid rights and licence to its affiliates.
9. INTELLECTUAL PROPERTY RIGHTS
(a) All intellectual property in any form owed or existing at the date of this agreement and used in connection with the Programme of Research ("Background IPR") shall remain the property of the party introducing the same.
(b) "Resulting Intellectual Property" shall mean individually and collectively all inventions, improvements and/or discoveries whether or not patentable or capable of other intellectual property protection which are conceived and/or made by one or more members of other agents of the University acting either on their own or jointly with one or more employees of the Sponsors in performance of the Programme of Research and relating to its objectives.
(c) All rights to Resulting Intellectual Property under the Programme of Research shall belong in the first instance to the University.
(d) Rights to inventions, improvements and/or discoveries, whether or not patentable or capable of other intellectual property protection, relating to the Programme of Research made solely by employees of the Sponsors shall belong to each Sponsor respectively ("Sponsor IPR").
(e) The University hereby grants to each Sponsor a non-exclusive, world-wide, irrevocable, royalty-free licence to use the Resulting Intellectual Property for the purposes of the Sponsors internal research and development in support of the Sponsors own business activities including, but not limited to, dealings with any regulatory authority. The Sponsor has the right to assign or sub-licence such aforesaid rights and licence to its affiliates. To the extent any Sponsor IPR is also requested by a Sponsor to obtain the full benefit of this licence, each Sponsor hereby grants a similar licence to the others as specified in this clause 9(e)
(f) The University shall have the right to grant licences to third parties under the Resulting Intellectual Property provided by the University ensure that the rights of each Sponsor under this Agreement are fully protected and in any event, any such licence shall not affect the licence granted to Sponsors set out in clause (e) above.
(g) In addition to the licence to be granted to the Sponsors in clause 9(e), the University shall grant to each Sponsor, to the extent that it is free to do so, a nonexclusive licence to use all the University's Background IPR where such Background IPR is either
(i) incorporated into the Programme of Research
(ii) needs to be licensed to Sponsors in order to enable Sponsors to practice lawfully any patent, invention, design or improvement arising from the Programme of Research.
Any licence granted to the Sponsors under this sub-clause 9(g) shall be world-wide, irrevocable and royalty free for the purposes of the project and for the purposes of the licence granted under clause 9(e) and thereafter royalty bearing on reasonable terms and conditions to be agreed if the Sponsors wish to use the Resulting Intellectual Property for its own commercial purposes involving the sale or licensing of the software to be developed in the Programme of Research.
10. USE OF NAMES AND CONFIDENTIALITY
10.1 Neither party will use the name of the other in any form of publicity without the written permission of the other.
10.2 The receiving party undertakes to treat as strictly confidential and not to divulge to any other third party, in whole or in part, any information, technical knowledge, know-how, experience, data and business background of a secret and confidential nature relating to the Programme of Research ("Information") disclosed under this agreement and not to make use of any such Information without the disclosing party's prior written consent. The receiving party also agrees not to reverse engineer or otherwise analyse any of the materials provided under this agreement. The receiving party further agrees not to reproduce any Information disclosed to it by the other party except for the purposes set forth in this Agreement above and shall limit disclosure of Information to those persons employed or otherwise under the contract with the receiving party who have a legitimate need to know such Information for the purpose set forth herein. Such obligations of confidentiality shall not apply in respect of information that
i) was already or comes to be in the public domain or
ii) is already know to the recipient or
iii) is acquired by the recipient from third party sources or
iv) is acquired by the recipient from its own independent research or
v) is approved in writing for disclosure by the disclosing party or
vi) is required to be disclosed pursuant to any legal or regulatory requirements.
(a) This agreement and the documents referred to in it form the entire agreement between the parties relating to the subject matter and supersedes all previous agreements (if any) relating to its subject matter.
(b) A waiver by any party of any term or condition of this agreement in one instance shall not be deemed or construed to be a waiver of such term or condition for any similar instance or of any subsequent breach. All rights, remedies, undertakings and obligations herein are cumulative.
(c) This agreement may only be amended by a further written agreement duly signed by or on behalf of each party.
(d) Nothing in this agreement shall create or be deemed to create a partnership or relationship of principal and agent between the parties.
PROGRAMME OF WORK
The programme proposes to create a Windows based user friendly software that uses latest information on in vitro
- in vivo extrapolation to predict metabolic drug-drug interactions.
There are a number of techniques (using software equations) which are used to do in vitro - in vivo extrapolation. Our software will include number of these options in a library of models which can be selected and employed by the end user. Sponsors, depending on the level of support, may ask for specific routines of extrapolation (common to their practice) to be included in the library.
University will advertise and recruit a suitable computer programmer with some knowledge of modelling/simulation to produce the software.
The first step in the programming will be to convert prototype of SIMCYP (written in MathCad) to Windows based program. Upon successful completion of the first stage (5-6 months) sponsors will be invited to review the programme and draft their suggestions and include additional features that they would like to incorporate into the software. These will be considered by principal investigators and efforts will be made to incorporate such additional features. However, the proportion of additional features from the list of suggested features will depend on the relative contributions received from each sponsor as well as scientific validity of such features.
A second review of the software will take place at a later stage (8-10 months) and final comments on improvements/enhancements of specific aspects will be received from the sponsors. The programme will be completed by 12 months and the software at this stage will be considered as the final product. Any additional work on software from that point will depend on reaching an agreement for extension of contract between all (/part of) sponsors and the Univ of Sheffield.
Sponsor Cyprotex Ltd
Contribution £17,000 sterling
Payment terms Six months after signature
4. The Law
4.2. General Law of Copyright
"... the more correct approach is first to determine whether the plaintiffs' work as a whole is 'original' and protected by copyright, and then to inquire whether the part taken by the defendant is substantial." (page 469)
"In relation to authorship, it seems to me that two matters have to be addressed. First it is necessary to determine whether the putative author has contributed the right kind of skill and labour. If he has then it is necessary to decide whether his contribution was big enough. The latter issue in particular is a matter of fact and degree."
5. The Disputes
5.1. The Retrospectivity of the Research Agreement
"But, so far as I am aware, there is no principle of English Law which provides that a contract cannot in any circumstances have retrospective effect, or that, if it purports to have, in fact, retrospective effect, it is in law a nullity. ... Often, as I say, the ultimate contract expressly so provides. I can see no reason why, if the parties so intend and agree, such a stipulation should be denied legal effect."
1. A contract or a deed, being a contract under seal, can take effect retrospectively. A deed can take effect retrospectively as a result of the operation of an escrow or because of words in the deed to that effect.
2. Retrospective effect occurs where this is intended by the parties. That intention can be found if provided for in the words of the contract or deed or by way of necessary implication divined from the surrounding circumstances and from business efficacy.
3. If a contract or deed has retrospective effect, any breach of contract created by that contract or deed that had occurred prior to the date of the contract or deed would, from the date of the contract or deed, ordinarily be regarded as having first been actionable and to have given rise to a cause of action from the original date on which the breach of contract occurred. This consequence would, however, be subject to any contrary result provided for by the terms of the contract or deed.
4. Parties can agree that any obligation is to crystallise or cause of action is to accrue from an earlier date than the contract or deed or than these would otherwise crystallise or accrue and this intention will ordinarily be given effect to.
5. The parties' intention that a contract or deed is to have retrospective effect is more readily to be seen where the parties had a prior contractual relationship preceding the contract or deed in question but it is still possible for such retrospective effect to occur where no such prior contractual relationship was in existence where such is provided for by the clear words of the contract or deed.
6. The retrospectivity principle is excluded where, exceptionally, the law or a relevant statutory provision precludes a contract or deed from having retrospective effect. An example of that prohibition is the technical rule governing estates held in land that any term being created cannot start to run from a date prior to the date of the lease.
5.2. The Applicable Contract
5.3. Cyprotex Ltd as a Party to the Research Agreement
1. Medeval Ltd agreed to supply a programmer and the proposed work was undertaken by Medeval Ltd up to the date that the Research Agreement was signed by Dr Leahy. For that work, Medeval Ltd was to be paid, and was paid, £12,500 by Sheffield under a separate contract.
2. Dr Leahy signed the Research Agreement purporting to bind Cyprotex Ltd but, by virtue of section 36C of the CA, he became personally liable under that Agreement.
3. Once Cyprotex Ltd was incorporated, it acquired Medeval Ltd's rights under the pre-Research Agreement arrangements by assignment from Medeval Ltd and Dr Leahy's rights by a novation of the Research Agreement.
4. The novation of the Research Agreement occurred because both Dr Leahy and Cyprotex acted on and after 21 March 2001 when Cyprotex Ltd was incorporated as if Cyprotex Ltd was the contracting party with Sheffield. This novation was impliedly accepted by Sheffield both because it intended to contract with the company that bought out the Cyprotex Division of Medeval Ltd and because it acquiesced in a continuing course of dealing under the Research Agreement with Cyprotex Ltd on the basis that that company was the one that had been used as the vehicle for the management buyout of the Cyprotex Division from Medeval Ltd.
5.3. Meaning of Contract
5.4. Construction of the Research Agreement and Implied Terms
"38. The relevant principles relating to the construction of disputed contractual terms and as to the material that is admissible to assist in that exercise are well-known, being enshrined in the frequently cited cases involving the construction of commercial contracts and of terms incorporated into them from related contracts. The following is a summary of these principles.
1. The meaning of a document (or of any other utterance) is that that would be given to it by a reasonable person having all the background knowledge which would reasonably be available to the parties in the situation in which they were at the time of the contract. That meaning is the meaning that the parties using those words against the relevant background would reasonably have been understood to have intended.1
2. If something appears to have gone wrong with the language and the natural and ordinary meaning of the words used flouts business commonsense, that meaning must yield to business commonsense.2
3. In the case of doubt, wording in a contract is to be construed against a party: (a) who seeks to rely on it in order to diminish or exclude his basic obligation; and (b) who proposed it for inclusion in the contract.3
4. When interpreting words of incorporation, a literal meaning is not usually to be given to them. Instead, the words should be adapted or interpreted so as to give effect to the context from which they have been drawn and into which they have been inserted. This process involves an intelligent and not a mechanical approach to interpretation.4
5. There is no fixed rule in any category of commercial contract that terms incorporated from one contract should bear a fixed or standard meaning in the second contract.5
6. In determining whether a particular obligation has been incorporated from the primary contract where the words of incorporation are general, only those terms in the primary contract which are germane to the rights and obligations of the parties under the secondary contract and are not ancillary to them will be incorporated into the secondary contract. 6
1. I.C.S. Ltd. V West Bromwich B.S.  1 WLR 896 (H.L.(E.)) at pages 912 and 913 (principles (1) and (2)) per Lord Hoffmann. This speech adopts and develops the passages in Lord Wilberforce's speeches on this topic in Prenn v Simmonds  1 W.L.R. 1381 (H.L.(E.) at pages 1384 -1386 and Reardon Smith Line Ltd. v Yngvar Hansen-Tangen  1 W.L.R. 989 at page 995.
2. ibid. at page 913, principle (5). Lord Hoffmann derives this principle from the speech of Lord Diplock in Antaios Compania Naaviera S.A. v Salen Rederierna A.B.  A.C. 191 (H.L.(E.))at page 201.
3. Youell and Others v Bland Welch Co Ltd and Others  2 Lloyd's Rep. 127 (C.A.) at page 134 (right hand column) per Staughton L.J. who also pointed out that these are the two components of what is usually referred to as the contra proferentem rule in the singular.
4. The "Annefield"  1 Lloyd's Rep. 1 (C.A.). All three judgments (Lord Denning M.R., Phillimore L.J.and Cairns L.J.) repay careful study. The principle here stated is drawn from that of Cairns L.J. at page 6 (right hand column).
5. Miramar Maritime Corporation v Holborn Oil Trading Ltd.  A.C. 676 (H.L.(E.)) per Lord Diplock at page 688 in relation to the incorporation of terms of a charter party into a bill of lading. However, the principle was clearly stated to be of general application in cases of commercial contract incorporation.
6. The "Annefield", ibid. at page 4 per Lord Denning M.R. and AIG Europe (UK) Ltd v Anonymous Greek Company of General Insurances, the "Etniki"  Lloyd's Rep IR 221 at page 227 (left hand column) per Colman .J."
5.5. The Ownership of the Copyright in the Simcyp Java-Based Program
5.5.2. General Considerations
5.5.3. Express Terms - Clause 9(d)
1. The words: "Sponsor Cyprotex, contribution £17,000" contained in Appendix 5 to the Research Agreement were to mean that Cyprotex was to provide sponsorship in kind in the form of the necessary programmer with experience drawn from Cyprotex's on-going Virtual Human Project. That programming work would fulfil the Programme of Research. Cyprotex's sponsorship would be valued in the sum of £17,000 for the purposes of the Research Agreement in general and for the purposes of clauses 5 and 6 and the fourth paragraph of Appendix 1 of that Agreement in particular.
2. Other Sponsors would provide the respective cash contributions required of them that were set out in the Research Agreement.
3. All Sponsors, including Cyprotex, would review the Simcyp program in its state following the successful completion of the first phase of the Programme of Research and would provide suggestions for its improvement and for additional features that could be added during phase two of the Programme of Research. The Research Agreement clearly envisaged that all Sponsors including Cyprotex would provide data and know how to assist in the overall development of the Simcyp program that would be drawn from both their commercial experience and their research and development programmes.
4. All Sponsors would be granted by Sheffield, by virtue of clauses 8, 9(e) and 9(g) of the Research Agreement, non-exclusive, world-wide, irrevocable, royalty-free licences to use: (1) Resulting Intellectual Property (ie the Java-based developed Simcyp program); (2) Sheffield's relevant background IPR (ie the MathCAD program, algorithms and Sheffield's data bases) and (3) all written material produced by Sheffield about the Simcyp program for which Sheffield owned the copyright.
5. The phrase: "The date of this agreement" that occurred in clause 9(a) of the Research Agreement meant 12 June 2000, given that the Research Agreement did not take effect until December 2000 but was intended to have retrospective effect and that work on the Programme of Research only started on 12 June 2000.
6. The Period of Performance would by taken to have started on 12 June 2000 even though clause 4 of the Research Agreement stated that the start date was 1 March 2000. This is because the start date of 1 March 2000 was stated to be subject to variation by agreement and the parties impliedly agreed to, or acquiesced in, that later start date.
7. The MathCAD program was to be regarded as Background IPR.
"Rights to improvements and/or discoveries whether or not patentable or capable of other intellectual property protection, relating to the Programme of Research made solely by employees of the Sponsors shall belong to each Sponsor respectively ("Sponsor IPR").
1. The improvements referred to in clause 9(d) had to be improvements "relating to the Programme of Research". The improvement in question, namely the entirety of the Java-based program, was a single improvement that not merely related to the Programme of Research but comprised the entirety of the Programme of Research.
2. The Java-based program was not made "solely" by Dr Edwards but was made by Dr Edwards with the assistance of Dr Rostami and the Simcyp programming work was stated by clause 3 of the Research Agreement to have been "conducted" by Dr Rostami, Professor Tucker and Dr Lennard of Sheffield.
3. For it to be adjudged that an improvement had not been made solely by a Sponsor so as to take that Sponsor's work outside the ambit of clause 9(d), it was not necessary for a contribution by an employee of Sheffield to be authorship of a kind capable of being copyrighted. Given the wording of that clause, a contribution from an employee of Sheffield could be sufficient to make the relevant improvement a joint improvement and not the sole improvement of a Sponsor where it amounted to work or assistance that was not susceptible to intellectual property rights at all.
4. The work of Sponsors had to be: "made solely by employees of Sponsors" The resulting rights: "shall belong to each Sponsor respectively". It would appear from this definition that the type of work covered by clause 9(d) was confined to the type of work that all Sponsors could undertake and which would therefore be of a kind which would result in multiple copyright rights owned in varying degrees by all the Sponsors. This description would fit the type of work involved in supplying data, general know-how and suggestions for improvements that all Sponsors were encouraged by the Research Agreement to undertake but would not readily fit Cyprotex's work of programming the entirety of the subject matter of the Programme of Research which no other Sponsor would share so that the copyright in that program would not be shared in any way with the other Sponsors.
1. Sheffield would not be able to grant effective licences to third parties once the Java-based program had been developed since, in granting such a licence, Sheffield would have had to: "ensure that the rights of each sponsor under the agreement would be fully protected" (clause 9(f)). Sheffield would not be able to grant third parties an effective licence to use the program whilst simultaneously protecting Cyprotex's copyright in the Java program.
2. Cyprotex would not be able to use its copyright in the Java program effectively since it would still be obliged to retain in strict confidence, and not to divulge to third parties, any information, technical knowledge, know-how, experience, data or business background disclosed to it whilst developing the Java-based program during the execution of the Programme of Research. In licensing the use of the Java-based programme to third parties, Cyprotex would inevitably have to break that obligation of confidence and so, if it complied with its obligation of confidence, its ability to use its copyright in the Java-based program would be virtually eliminated.
3. Sheffield's right to publish material arising from the Programme of Research provided for in clause 8 of the Research Agreement would be largely compromised. This ongoing right of publication was clearly intended to be a significant right on which Sheffield placed considerable store.
4. The rights of other Sponsors provided for by clause 9 of the Research Agreement would be significantly diminished, if not eliminated. This would particularly be the case for the licensing rights in Simcyp that they were given by that clause.
5. The expectation that each Sponsor was given by that they would be consulted by Sheffield about any extension of the contract once the Programme of Research had been completed would be a meaningless expectation since Sheffield would be unable to hold meaningful discussions with the Sponsors on that subject. Only Cyprotex would be able meaningfully to consult its co-sponsors about such an extension given that Cyprotex would be holding the essential copyright to the Simcyp Java-based program that would be needed by Sheffield to enable it to provide for the marketing rights in Simcyp.
5.5.4. Express Term - Clause 9(b)
"individually and collectively all inventions, improvements and/or discoveries whether or not patentable or capable of other intellectual property protection which are conceived and/or made by one or more members or other agents of the University acting either on their own or jointly with one or more employees of the Sponsors in performance of the Programme of Research and relating to its objectives."
2. Conceived and/or made by Sheffield
5.5.5. Implied Term
"(7) Circumstances may exist when the necessity for an assignment of copyright may be established. As [counsel for the plaintiff] has submitted, these circumstances are, however, only likely to arise if the Client needs in addition to the right to use the copyright works the right to exclude the Contractor from using the work and the ability to use the copyright against third parties. Examples of when this situation may arise include:
(a) where the purpose in commissioning the work is for the Client to multiply and sell copies in the market for which the work was created free from the sale of copies in competition with the Client by the Contractor or third parties;
(b) where the Contractor creates a work which is derivative from a pre-existing work of the Client, eg when a draughtsman is engaged to turn designs of an article in sketch form by the Client into formal manufacturing drawings and the draughtsman could not use the drawings himself without infringing the underlying rights of the Client;
(c) where the Contractor is engaged as part of a team with employees of the Client to produce a composite or joint work and he is unable, or cannot have been intended to be able, to exploit for his own benefit the joint work or indeed any distinct contribution of his own created in the course of his engagement: see Nichols Advanced Vehicle Systems Inc v Rees  RPC 127 at 139 and consider Bogrich v Shape Machines unreported 4 November 1994 and in particular page 15 of the transcript of the judgment of Aldous J."
"where the purpose in commissioning the work was to transform a research and development program containing a ground-breaking new technique for drug research that had been developed by the Client into a user-friendly program capable of being marketed to the pharmaceutical industry world-wide on a major scale by the Client and where the Contractor creating that marketable program would already have been granted by the commissioning agreement a licence to use the program for its own internal purposes connected with different but related areas of research but had not been granted the right to market the program without a subsequent agreement being negotiated with the Client."
1. Clause 9(d) of the Research Agreement should be interpreted so that the Java programming work was not "made solely by employees of the Sponsors" and was not "Sponsor IPR" and that clause 9(b) should be interpreted so that the Java programming work was made by Dr Rostami as an employee of Sheffield jointly with Dr Edwards as an employee of "the Sponsors" so that that work constituted "Resulting Intellectual Property"; or alternatively
2. Clauses 9(b), 9(c) and 9(d) do not cover the Java programming work at all since it was undertaken by a Sponsor so that a term should be implied into clause 9 that copyright in the Simcyp Java-based program should be owned by and vest in Sheffield.
5.6. Appropriate Declaration and Other Claims
"The copyright and any other intellectual property:
(1) in or over and any works relating to Simcyp created by Dr Edwards or any other servant or agent of Cyprotex Discovery Limited or Medeval Limited; and
(2) in or over MathCAD and any algorithm or data base used in its compilation; and
(3) in any specification created by or with the assistance of Dr Edwards, Dr Rostami or Professor Tucker relating to Simcyp or MathCAD,
is owned by The University of Sheffield."
HH Judge Thornton QC
Technology and Construction Court
1. Suggested corrections and errata.
2. The wording of the appropriate declaration and orders including those concerned with assignment, delivery up, an enquiry or an injunction if any of these are still sought.
3. Directions for an enquiry (if such is ordered).
4. Costs (including any outstanding interim costs orders) and any interim payment on account pending detailed assessment.
5. Application for permission to appeal (if any).
6. The disposal of any security provided for costs.
HH Judge Thornton QC
Technology and Construction Court