Mr Justice Lewison:
1.The Skype Group offers software which can be downloaded from the
internet for free and allows users to communicate through free voice
and video calls, by sending instant messages, SMS (text messages) or
files, and by making or receiving low-cost calls to and from landline and
mobile numbers. Skype has proved very successful: as at 31 December
2008, Skype had 405.3 million registered users throughout the world. The
Claimant, Skype Technologies SA, is a member of the Skype Group. It is
domiciled in Luxembourg.
2.The Defendant, Joltid Ltd, is a company incorporated in the British
Virgin Islands. It is the owner of the copyright in certain software called
the Global Index software. This software is fundamental to Skype's
business. On 20 November 2003 Skype Technologies and Joltid entered
into a written licence agreement. The License Agreement recorded the
terms upon which Joltid would grant to Skype Technologies a world-
wide licence to use a compiled object code form (in essence, a form of
software which is machine-readable rather than human-readable) of the
Global Index software. It is referred to in the License Agreement as the
"Joltid Software". The object code is to be distinguished from the source
code which is a human-readable form of the software. Under the License
Agreement Joltid retained sole control over the source code.
3.Clause 19.1 of the License Agreement contained a jurisdiction clause
which stated:
"Governing Law and Jurisdiction. Any claim arising under or relating to
this Agreement shall be governed by the internal substantive laws of
England and Wales and the parties submit to the exclusive jurisdiction of
the English courts."
4.Joltid claims that, in breach of the License Agreement, Skype
Technologies had possessed, used, accessed, and modified the source
code for the Global Index Software. On 12 March 2009 it purported to
terminate the License Agreement on that ground. On the same day Skype
Technologies began proceedings in this court claiming declarations that
Joltid's purported termination of the License Agreement was invalid and
that the License Agreement continues in force. Subject to one point,
Skype Technologies accepts that it has used and accessed the source
code. But it says that its use of the source code was not a breach of the
License Agreement. Although the express terms of the License Agreement
only covered the use of the object code, Skype Technologies OÜ says that
Joltid supplied Skype Technologies with the source code rather than the
object code. Joltid thus intended Skype Technologies to use the source
code as if it were the object code. As a result, it puts its case in a number
of ways. It says that the conduct of the parties amounted to a variation
of the License Agreement. Alternatively it says that Joltid is estopped
from alleging a breach of the License Agreement. Alternatively it says
that Joltid has waived compliance with the strict terms of the License
Agreement. All these allegations, except possibly the defence based
on waiver, rely on the continued effect of the License Agreement. The
one point that I mentioned is that Skype Technologies has applied to
amend its statement of case to allege that a different company in the
Skype Group (Skype OÜ) was in fact the company which carried out the
activities of which Joltid complains.
5.Because Skype Technologies alleges that the License Agreement has not
been validly terminated, the Skype Group continues to use the software.
6.On 12 May 2009, Joltid served its Defence and Counterclaim. Joltid
alleges that insofar as Skype Technologies has used, copied, modified,
and disclosed copies of the GI Source Code since around 2007, Skype
Technologies has repudiated the License Agreement, infringed Joltid's UK
and Estonian copyright in the GI Source Code, and misused confidential
information belonging to Joltid. Joltid seeks declarations to the effect
that the License Agreement was validly terminated on 12 March 2009,
as well as injunctions and financial remedies. Paragraph (2) (b) of the
prayer for relief claims an injunction restraining Skype Technologies from
misusing Joltid's confidential information; and paragraph (2) (d) claims an
injunction restraining Skype Technologies from making any further use of
the Joltid Software, the GI Source Code or any versions or modifications
of them that Skype may have developed. If granted, these injunctions
would have world-wide effect.
7.The trial of the action has been listed to begin on 8 June 2010.
8.On 1 September 2009 eBay Inc (the owner of the Skype Group)
announced its agreement to sell a 65% stake in Skype to a group
of investors. In particular, eBay Inc and Skype Inc (a wholly owned
subsidiary of Skype Technologies) entered into a purchase agreement
with a number of investors: Silver Lake Management Company III LLC,
Index Ventures Management SA, Andreessen Horowitz LLC, and Canada
Pension Plan Investment Board (collectively, the "Investors"). Joltid says
that the terms of the purchase agreement made it clear that the new
owners were required to continue operating Skype in the normal course
of business, consistent with Skype Technologies' past practice, including
reproducing the GI Source Code. Joltid says that it follows that the terms
of the purchase agreement contractually required Skype Technologies
to continue to infringe (and indeed expand the infringement of) Joltid's
copyright throughout the world. On the same day Joltid registered its
copyright in the source code with the US Copyright Office, and a fortnight
later, on 15 September, registered its copyright in a modified version of
that source code.
9.On 16 September 2009, Joltid began proceedings in the United States
District Court for the Northern District of California against Skype
Technologies, eBay Inc, Skype Inc, the Investors, and Michaelangelo
Volpi, a partner at Index Ventures Management SA.
10.The Complaint in the US proceedings recites the License Agreement,
the alleged breach and Joltid's termination of it. It goes on to allege that
despite that termination Skype continues to promote the downloading
of Joltid's software. It then alleges that Joltid is bringing the action for
copyright infringement against Skype, eBay and the Investors. Paragraphs
35 to 38 of the Complaint amplify the facts alleged surrounding the
making of the License Agreement, the breaches of the agreement and
its termination. Paragraph 39 refers to the proceedings in this court.
Paragraphs 53 to 62 deal with the sale of part of eBay's shareholding in
Skype to the Investors. The first head of relief is a claim for copyright
infringement as a result of the Skype Group copying the software.
The second is a claim that the Skype Group has infringed copyright by
modifying the software. The third is a claim that the Skype Group has
infringed copyright by distributing the software and derivative works
based on the software. The fourth is based on an allegation that end users
are also infringing copyright and that all the Defendants are liable for
inducing that infringement. The fifth is an allegation that all Defendants
are liable for materially assisting and facilitating direct infringement by
end users. The sixth is a claim that all Defendants are vicariously liable
for direct infringement by end users. In all cases Joltid claims damages
and an injunction to restrain further infringement. In addition Joltid also
claims statutory damages under US Federal copyright legislation; and in
the alternative actual damage plus an account of profit. Joltid has also
made a demand for jury trial, as it is entitled to do under Californian
law. The essence of a claim of copyright infringement under US law, as
Professor Menell explains, is an unauthorised reproduction or infringement
of one or other of the exclusive rights granted to a copyright owner under
US law. The consent of the copyright owner (such as through a licence)
may be raised as an affirmative defence that must be proved by the
defendant.
11.Skype Technologies claims that in so far as the US proceedings make
claims against it, the claim is a breach of clause 19.1 of the License
Agreement, and seek an anti-suit injunction to restrain any further steps
being taken against it in the USA.
12.Article 23 of Council Regulation (EC) No 44/2001 ("the Judgments
Regulation") provides:
"1. If the parties, one or more of who is domiciled in a Member State,
have agreed that a court or the courts of a member State are to have
jurisdiction to settle any disputes which have arisen or which may arise in
connection with a particular legal relationship, that court or those courts
shall have jurisdiction. Such jurisdiction shall be exclusive unless the
parties have agreed otherwise."
13.Since Skype Technologies is domiciled in Luxembourg, there is no
doubt that this article applies. Since clause 19.1 of the License Agreement
confers exclusive jurisdiction on the courts of this country, there is equally
no doubt that this court has jurisdiction to determine all claims between
Skype Technologies and Joltid arising under or relating to the License
Agreement. That gives rise to two questions:
i) In so far as the US proceedings concern Skype Technologies, do they
fall within the scope of the exclusive jurisdiction agreement;
ii) If they do, how does that affect the court's willingness to grant an anti-
suit injunction?
14.Whether a claim falls within an agreed jurisdiction clause is a question
of interpretation of the clause in question. That question is to be
decided according to national law, even in the context of the Judgments
Regulation (see Benincasa v. Dentalkit Srl [1997] E.T.M.R. 447; Knorr-
Bremse Systems for Commercial Vehicles Ltd v Haldex Brake Products
GmbH [2008] FSR 30). In my judgment there is no distinction to be
drawn between the approach to the interpretation of a clause in an
agreement which confers jurisdiction on the courts of a particular territory
and a clause in an agreement which confers jurisdiction on a particular
tribunal, such as an arbitrator. Both types of clause represent the parties'
agreement about how disputes are to be resolved. Both should be
interpreted in accordance with the same principles. The correct approach
to the interpretation of arbitration agreements has been considered
recently by both the Court of Appeal and the House of Lords. In Fiona
Trust & Holdings Corporation v Privalov [2007] 2 Lloyd's Rep 267 a
charterparty contained a clause which referred "any dispute arising under
this charter" to arbitration. Longmore LJ said (§ 17):
"Ordinary businessmen would be surprised at the nice distinctions drawn
in the cases and the time taken up by argument in debating whether a
particular case falls within one set of words or another very similar set of
words. If businessmen go to the trouble of agreeing that their disputes be
heard in the courts of a particular country or by a tribunal of their choice
they do not expect (at any rate when they are making the contract in the
first place) that time and expense will be taken in lengthy argument about
the nature of particular causes of action and whether any particular cause
of action comes within the meaning of the particular phrase they have
chosen in their arbitration clause."
15. He added (§ 18):
"As it seems to us any jurisdiction or arbitration clause in an international
commercial contract should be liberally construed. The words "arising out
of" should cover "every dispute except a dispute as to whether there was
ever a contract at all"…"
16. It will be noticed that Longmore LJ approached both jurisdiction
clauses and arbitration clauses in the same way. In the House of Lords
Lord Hoffmann said ([2008] 1 Lloyd's Rep 254 § 13):
"In my opinion the construction of an arbitration clause should start from
the assumption that the parties, as rational businessmen, are likely to
have intended any dispute arising out of the relationship into which they
have entered or purported to enter to be decided by the same tribunal.
The clause should be construed in accordance with this presumption
unless the language makes it clear that certain questions were intended
to be excluded from the arbitrator's jurisdiction."
17. Although Lord Hoffmann's discussion of arbitration clauses did not
expressly include jurisdiction clauses, he applauded Longmore LJ's
judgment; and Lord Hope clearly regarded jurisdiction clauses and
arbitration clauses as serving similar purposes with the result that their
interpretation should be approached in the same way. However, Mr Calver
QC, appearing with Mr Brandreth for Joltid, lays stress on that part of
clause 19.1 which speaks of any "claim" rather than any "dispute". He
says that Joltid's claim in the US proceedings does not arise out of the
License Agreement. On the contrary it is predicated on the assumption
that the License Agreement has been terminated. Mr Calver says that his
proposition can be tested in the following way:
"[Had] the UK litigation been concluded in Joltid's favour before the
commencement of the US proceedings, could [Skype Technologies] claim
that Joltid's US copyright infringement claims relating to acts done after
the termination of the Agreement arose under or were related to the
Agreement? The answer must be: plainly not."
18.If the question is put in that way, then Mr Calver may be right,
although Mr Hollander QC, appearing with Mr Singla for Skype
Technologies, would dispute that. But the heart of the current dispute
between the parties is whether the License Agreement has or has not
been validly terminated. That issue has not been determined, and it is the
issue which this court will decide. The fact is that if Skype Technologies
is right in saying that the License Agreement remains in force and that
it has the effect that it says it has, then Joltid's claims against Skype
Technologies in the US proceedings will fail. It is only if Joltid succeeds in
this court that the claims made in the US proceedings get off the ground
against Skype Technologies. Mr Calver relied on part of the speech of
Lord Scott of Foscote in Donohue v Armco Inc [2002] 1 Lloyd's Rep 425
§ 60 in which his Lordship appeared to distinguish between a clause
which covered "any dispute" between the parties and one which covered
"any claim against" one of the parties. But this was both hypothetical
and obiter, and none of the other Law Lords associated themselves with
it. More to the point, Lord Scott's observations were made five years
before the House of Lords in Fiona Trust drew a line under the authorities
and made a fresh start (per Lord Hoffmann § 12). In Fiona Trust Lord
Scott himself said that he was in complete agreement both with Lord
Hoffmann's conclusion and his reasoning (§ 36).
19.Mr Calver's argument is, in my judgment, based on an unduly narrow
reading of the clause. It is exactly the kind of fine distinction that both
Longmore LJ and Lord Hoffmann deplored in Fiona Trust. Whether the
contention that the License Agreement is still in force is pleaded by way
of Complaint or by way of defence is, in my judgment, irrelevant. Rational
businessmen would not envisage that their choice of jurisdiction would
depend on who issued proceedings first, or whether an ingenious pleader
could frame a cause of action without actually mentioning the License
Agreement.
20.Accordingly, in my judgment the claims against Skype Technologies
made in the US proceedings fall within the scope of clause 19.1 of the
License Agreement.
21.Mr Hollander says that that is the end of the matter. He says that:
i) This court has exclusive jurisdiction under article 23 of the Judgments
Regulation;
ii) The ECJ has said that where a court has exclusive jurisdiction under the
Regulation it must not decline to exercise it, and accordingly there is no
question of Skype Technologies' proceedings in this court being stayed in
favour of the US proceedings;
iii) The test for staying domestic proceedings and granting an anti-suit
injunction are the same: they are simply two sides of the same coin;
iv) It follows therefore that if the court cannot stay its own proceedings, it
must grant an anti-suit injunction.
22.The first step in this argument is established by article 23 itself; and
I agree with it. The second step is said to flow from the decision of the
ECJ in Owusu v Jackson [2005] QB 801. In that case the parties (both
of whom were domiciled in England) entered into an agreement about
the hire of a holiday villa in Jamaica. While on holiday the claimant was
seriously injured; and he brought an action in England for damages. In
addition to the English domiciliary, there were a number of Jamaican
defendants to the claim. The defendants invited the court to decline
jurisdiction on the ground of forum non conveniens, saying that Jamaica
was the right place to try the claim. The ECJ ruled that a court which
had jurisdiction under article 2 of the Brussels Convention (which
corresponds to the Judgments Regulation) could not decline to exercise
that jurisdiction by the application of the discretionary doctrine of forum
non conveniens. The principal justification for the decision was that it
promoted legal certainty, and that legal certainty would be undermined
if discretionary doctrines could defeat the allocation of jurisdiction under
the Convention. I am inclined to agree with Mr Hollander that the decision
of the ECJ in Owusu has now removed discretionary considerations (such
as those relating to forum non conveniens) from playing any part in the
decision of a court in a Member State from staying its own proceedings.
I am also inclined to agree that the court should not, under the guise
of case management, achieve by the back door a result against which
the ECJ has locked the front door (cf. Equitas Ltd v Allstate Insurance
Company [2008] EWHC 1671 (Comm) § 64).
23.However, in Owusu the ECJ did not rule on the question whether a
court having jurisdiction under the Convention could or should grant an
injunction preventing the taking of proceedings in another jurisdiction. Mr
Hollander's third point (that the test for staying domestic proceedings and
granting an anti-suit injunction is the same) is not in my judgment borne
out by authority.
24.In relation to disputes which may become the subject of proceedings
in two or more Regulation States, the ECJ has set its face against the
grant of anti-suit injunctions. In Turner v Grovit [2005] 1 A.C. 101 the
question was whether an English court could restrain proceedings in Spain
where the Spanish proceedings were being pursued in bad faith. The ECJ
said "No". In the course of their judgment they said (§ 27):
"A prohibition imposed by a court, backed by a penalty, restraining a
party from commencing or continuing proceedings before a foreign court
undermines the latter court's jurisdiction to determine the dispute. Any
injunction prohibiting a claimant from bringing such an action must be
seen as constituting interference with the jurisdiction of the foreign court
which, as such, is incompatible with the system of the Convention."
25.In West Tankers Inc v Allianz SpA [2009] 3 W.L.R. 696 it was alleged
that proceedings had been begun in Sicily in breach of an arbitration
agreement. The ECJ ruled that it was inappropriate for the court in
England to have granted an anti-suit injunction. It was for the court in
Sicily to rule on its own jurisdiction and it was not for the English court to
pre-empt its decision. The ECJ said (§ 29):
"that an anti-suit injunction, such as that in the main proceedings, is
contrary to the general principle which emerges from the case law of the
Court of Justice on the Brussels Convention, that every court seised itself
determines, under the rules applicable to it, whether it has jurisdiction to
resolve the dispute before it."
26.Accordingly, in my judgment the proposition that a court which
has jurisdiction under the Judgments Regulation must exercise that
jurisdiction does not entail the further proposition that it can (let alone
must) prevent a court in another jurisdiction from considering its own
jurisdiction to decide a dispute between the parties. If anything, I would
be inclined to draw the conclusion that the court should not grant an anti-
suit injunction, at least where both courts are in Regulation States. It is
for the court second seised to rule on its own jurisdiction. It is true that
both Turner v Grovit and West Tankers were concerned with litigation in
two Regulation States, whereas the USA is not bound by the Judgments
Regulation. Mr Hollander says that this makes all the difference. In the
case of two Regulation States the two states are part of a single market
and are to be treated no differently from, say, a court in London and a
court in Manchester. If one of the rival jurisdictions is not a Regulation
State, the same overriding principle of trust does not apply. But the
foundation of Mr Hollander's argument is that in Owusu v Jackson the
ECJ drew no distinction between a Regulation and a non-Regulation
state. If that is right, then on this approach the ECJ's approach to anti-
suit injunctions must be equally applicable in the case of non-Regulation
states.
27.Moreover even in domestic law the test for the grant of a stay of
domestic proceedings on the one hand, and the restraint of foreign
proceedings on the other, is not exactly the same. No question of comity
arises in the first case; but comity plays an important part in the second:
Donohoe v Armco Inc [2002] 1 Lloyd's Rep 425 § 24 citing Société
Nationale Industrielle Aérospatiale v Lee Kui Jak [1987] AC 871, 896.
28.Accordingly I do not consider that Mr Hollander's conclusion can be
sustained.
29.I turn, then to the question whether as a matter of discretion an anti-
suit injunction should be granted to restrain a breach of clause 19.1. Let
me make three points at the outset. First, there is no dispute that the
License Agreement was a valid contract even if it has been terminated. On
the view I have formed of the US proceedings, there has been a breach
of contract. Accordingly, I am only called upon to decide the appropriate
remedy for a breach. Second, if I refuse the equitable remedy of an
injunction, Skype Technologies will have a remedy in damages. Those
damages might include, for example, the legal costs of a successful
defence of the US proceedings, since costs are not usually recoverable
in US litigation. Third, where parties agree that the courts of a particular
country have exclusive jurisdiction over certain kinds of disputes they
are necessarily agreeing that they will not litigate those kinds of disputes
anywhere else.
30.The classic approach of a court of equity to the enforcement of a
negative obligation by injunction is encapsulated in the speech of Lord
Cairns LC in Doherty v Allman (1877-78) LR 3 App Cas 709, 719-20:
"My Lords, if there had been a negative covenant, I apprehend, according
to well-settled practice, a Court of Equity would have had no discretion
to exercise. If parties, for valuable consideration, with their eyes open,
contract that a particular thing shall not be done, all that a Court of Equity
has to do is to say, by way of injunction, that which the parties have
already said by way of covenant, that the thing shall not be done; and
in such case the injunction does nothing more than give the sanction of
the process of the Court to that which already is the contract between
the parties. It is not then a question of the balance of convenience or
inconvenience, or of the amount of damage or of injury—it is the specific
performance, by the Court, of that negative bargain which the parties
have made, with their eyes open, between themselves."
31.This a simple approach (probably too simple). As both Mr Hollander
and Mr Calver agreed, the grant of an anti-suit injunction is a
discretionary remedy; and the court has a real discretion to exercise.
Nevertheless the parties' contractual bargain is the starting point; and it
is no doubt for that reason that the courts have said that a strong reason
would be needed before the court would exercise its discretion to decline
to enforce it by injunction (Donohoe v Armco Inc § 24).
32.The strength of the exclusive jurisdiction clause in the present case is
reinforced by a number of considerations:
i) Neither Skype Technologies not Joltid has any obvious connection with
England and Wales. Consequently they must be taken to have deliberately
chosen a neutral forum for the determination of their disputes;
ii) The licence to use the software was a world-wide licence. Consequently
the parties must be taken to have contemplated that a breach of the
terms of the licence might take place anywhere in the world, yet they still
chose to have their disputes decided in England and Wales;
iii) A breach of the terms of the licence might well involve the
infringement of local copyright law in a foreign jurisdiction, yet the
dispute was to be determined in England and Wales;
iv) Following on from the last point, the parties must have contemplated
that the persons who might be needed to give evidence relevant to a
dispute might be resident anywhere in the world, and that the necessary
documents might be located anywhere in the world.
33.It follows, in my judgment, that what one might call the standard
considerations that arise in arguments about forum non conveniens
should be given little weight in the face of an exclusive jurisdiction clause
where the parties have chosen the courts of a neutral territory in the
context of an agreement with world-wide application. Otherwise the
exclusive jurisdiction clause would be deprived of its intended effect.
Indeed, the more "neutral" the chosen forum was the less the importance
the parties must have placed on the convenience of the forum for any
particular dispute. If the standard considerations that arise in arguments
about forum non conveniens were to be given full weight, they would
almost always trump the parties' deliberate selection of a neutral forum.
This coincides with the tentative view of Teare J in Morgan Stanley & Co
International plc v China Haisheng Juice Holdings Co Ltd [2009] EWHC
2409 (Comm), § 37; and the view expressed by Raphael on The Anti-
Suit Injunction § 8.06 fn 10, with which I agree. Perhaps it also harks
back to the more traditional approach to the enforcement of negative
contractual obligations by injunction. I might add that damages would, in
my judgment, be an inadequate remedy for breach of the clause. Quite
apart from anything else, Joltid has demanded trial by jury, and it would
be quite impossible to estimate what effect that had on the outcome of a
trial.
34.One consideration, however, which continues to play an important
part in the exercise of the discretion to enforce (or not to enforce) an
exclusive jurisdiction clause by injunction is whether the outcome of
the decision (either way) will enable all disputes between the parties to
take place in the same forum. Allied to this consideration is the question
whether there are other parties (who are not entitled to the benefit of
the exclusive jurisdiction clause) who are involved in the same or closely
related disputes. The reason underpinning these considerations is the
understandable desire of the English court to avoid parallel proceedings
and the possibility of inconsistent decisions: Donohoe v Armco Inc § 27.
It was considerations of this kind which ultimately persuaded the House
of Lords not to enforce the exclusive jurisdiction clause by injunction in
Donohoe v Armco Inc, since the only forum in which a single composite
trial could take place was New York (§ 36). That was the strong reason
which justified the decision.
35.In the present case the English proceedings will continue. Skype
Technologies is entitled to bring them here because of the exclusive
jurisdiction clause; and consistently with Owusu the court will not stay
those proceedings. Equally, this court has no jurisdiction to prevent Joltid
from bringing proceedings in California against parties who do not have
the benefit of the exclusive jurisdiction clause. Accordingly the goal of a
single forum cannot be achieved, whichever way I decide this application.
It follows therefore that the existence of parallel proceedings and the
possibility of inconsistent decisions cannot amount to a strong reason
not to enforce the clause by injunction. Whatever I decide that possibility
will remain. On the contrary, enforcement of the clause by injunction
does at least have the merit that all disputes between the parties to the
exclusive jurisdiction agreement itself will be decided in the same forum.
Again this coincides with the decision of Teare J in Morgan Stanley & Co
International plc v China Haisheng Juice Holdings Co Ltd and also with the
earlier decision of Rix J in Credit Suisse First Boston (Europe) Ltd v MLC
(Bermuda) Ltd [1999] 1 Lloyd's Rep 767.
36.The factors on which Mr Calver relies as the strong reasons for not
enforcing the exclusive jurisdiction clause by injunction are:
i) Joltid's breach of US copyright claims in California arise under US
federal law for which the appropriate forum is the US District Court;
ii) The US District Court for the Northern District of California has personal
jurisdiction over each of the named Defendants to the US action;
iii) The claims in the US proceedings relate to activities carried out in the
United States;
iv) The majority of the documentary evidence relating to the alleged
infringements of copyright, as well as the operational control of Skype and
the availability of the Skype services and the advertising and promotion of
the Skype services is located in the USA;
v) The majority of the witnesses of fact who will be giving evidence in the
US proceedings are resident in the United States;
vi) Expert witnesses are also likely to be resident in, or operating in the
US.
37.All of these factors were eminently foreseeable when Skype
Technologies and Joltid agreed the exclusive jurisdiction clause. They are
no more than the standard considerations that arise in arguments about
forum non conveniens. In my judgment they do not (whether individually
or collectively) amount to a strong reason for refusing to enforce the
exclusive jurisdiction clause by injunction. Indeed it may be that in
the context of an exclusive jurisdiction clause they are matters which
Joltid is simply not entitled to rely upon at all: UBS AG v HSH Nordbank
AG [2009] 2 Lloyd's Rep 272 § 100, citing British Aerospace plc v Dee
Howard [1993] 1 Lloyd's Rep 368, 376.
38.Joltid has proposed undertakings which, it says, should tip the balance.
The undertakings are:
i) Joltid undertakes to the English Court in the High Court, Chancery
Division proceedings (Claim Number HC09C00756) ("the UK
proceedings") that in the US proceedings it agrees to be bound, as
against Skype Technologies, by the final decision of the English Courts in
the UK proceedings as to (i) whether Joltid's notices of breach and notice
of termination are valid/invalid and (ii) whether the License Agreement
has been terminated and (iii) whether Skype Technologies acted in breach
of the License Agreement and/or infringed Joltid's copyright as it subsists
in the UK and Estonia.
ii) In turn, Skype Technologies should be required to undertake to be
bound as against Joltid by the final decision of the English Courts in the
UK proceedings for the purposes of the US proceedings.
iii) Joltid undertakes that it will not seek to recover damages or any other
remedy in the US proceedings against Skype Technologies for any alleged
breach of copyright occurring prior to the date on which Joltid maintains
that the License Agreement was terminated, namely 12 March 2009.
39.It is common ground between the experts (Professor Menell for
Skype Technologies and Mr Hadley for Joltid) that Joltid's claim for
statutory damages against Skype Technologies, in so far as it is based
on allegations of direct copyright infringement, is based on the number
of works infringed, rather than on the number of infringements. There is
only one award per work, regardless of the number of infringements. It
follows, therefore, that Joltid's claim against Skype Technologies for direct
infringement cannot be split into pre- and post-12 March 2009 segments.
In addition, whether Joltid is entitled to recover damages for copyright
infringement after 12 March 2009 is the question to be decided in the
English proceedings, and depends on whether the License Agreement is
still in force.
40.In my judgment these undertakings are no more than an attempt by
Joltid to wriggle out of its contract. I do not consider that they should
tip the balance against the grant of an anti-suit injunction. In principle,
therefore, I shall grant the anti-suit injunction.
41.The first order sought is an order that Joltid must not pursue or take
any further step in the US proceedings against Skype Technologies. I
will make an order in those terms. The third order sought is an order
requiring Joltid to discontinue the US proceedings as against Skype
Technologies. That is the logical consequence of the grant of the first
order; and I will make an order in those terms. The second order sought
is an order that Joltid:
"shall not commence or pursue or procure or assist in the commencement
or pursuit of any further proceedings against [Skype Technologies] arising
under or relating to the Joltid Global Index Software License Agreement
… before any court or tribunal other than the High Court of Justice of
England and Wales …"
42.Mr Calver says that if I were to make an order in these terms I
would be fettering for all time the discretion of any court to determine
on the facts of a particular case whether it was appropriate to prevent
proceedings being brought in another jurisdiction by way of injunctive
relief. That is not appropriate in circumstances where the court always
retains a discretion as to whether or not to grant such relief depending
upon the facts of a particular case, see Donohue v Armco Inc § 24. In
principle I agree with this submission. However, paragraph 3 of the
draft order (unusually for a final injunction) gives Joltid liberty to apply
to discharge or vary the order on 24 hours' notice. The real question,
therefore, is: who should bear the burden of showing that a particular
action that Joltid wishes to begin or pursue in the future should or
should not be allowed to proceed? As the same paragraph in Donohue
v Armco Inc makes clear the burden is on the person who seeks to
displace the exclusive jurisdiction clause; in other words Joltid. In those
circumstances, I do not consider that the mechanism for which the draft
order provides is unfair or oppressive in, in effect, requiring Joltid to
come back to court for a variation of the order if there are particular
proceedings which it asserts ought to be allowed to be commenced or
continued; or if there is a dispute about whether particular proceedings
fall within the ambit of the exclusive jurisdiction clause.
I propose, therefore, to make an order in the terms of the draft.