Copyright Dispute Racks Up Mammoth Legal Bill

January 12, 2015

Copyright Dispute Racks Up Mammoth Legal Bill

A former couple engaged in an acrimonious copyright dispute in respect of trading software which lay at the heart of their phenomenally successful business have run up £19 million in legal bills.

The husband, a mathematician and computer programmer, had written the currency and securities trading software while in partnership with his wife. However, both their marriage and business relationship broke down and the husband departed to set up a competing venture which was also engaged in computer-based trading.

He launched proceedings, claiming to be the owner, or in some instances the co-owner, of the software which had continued to be used by the wife's business. He sought damages and an injunction to prevent her companies from breaching his copyright and associated database rights.

The husband's claim was dismissed on the basis that the software had been written when he was in business with his wife and was therefore a partnership asset. Counterclaims pursued by the wife's companies were in part successful and the husband was ordered to pay 85 per cent of their legal costs. Following a 12-day hearing, the companies' costs came to £13 million and the husband's to £6 million.

In rejecting the husband's challenge to the swingeing costs order, the Court of Appeal noted that the companies' arguments had substantially prevailed. The husband had made a pre-trial offer to settle the dispute; however, the companies had achieved a better outcome by fighting the case in court. The judge's apportionment of costs could also not be faulted.

The Court noted that the costs of the dispute 'dwarfed' those incurred in the vast majority of civil claims and 'seemed very large'. However, it would ultimately be for the companies to establish that their legal bills were reasonable and proportionate.

Copyright disputes can be extremely expensive to resolve by litigation. Not only does this case show the wisdom of knowing at all times exactly who owns copyright but also the potential for loss if a dispute goes to court rather than being resolved by a negotiated settlement.