The High Court has upheld a claim by Force India brought against various parties (including Lotus) for breach of confidence and for infringement of copyright works belonging to Force India, awarding the F1 team damages of Eur 25,000. However, the Court also ruled that Force India must pay to Aerolab, one of the defendants, Eur 846,230 in respect of monies owed pursuant to a development agreement between the parties.

Background

Force India entered into a car development agreement with Aerolab (and its parent, Fondtech). Aerolab and Fondtech specialised in aerodynamics and created confidential computer aid design files (CADS) pursuant to the development agreement. After the agreement was terminated, Aerolab and Fondtech commenced working for Lotus and used the Force India CAD files as their 'starting point'.

It is common practice for aerodynamicists to use existing CAD files in order to save time. The question for the Court was whether or not this act was a breach of the Force India/Aerolab contract (including the Concorde Agreement, which under FIA rules each F1 team must sign as a declaration that it will not misuse confidential information owned by other teams) and/or an infringement of Force India's copyright.

The decision

The Judge ruled that Aerolab and Fondtech had acted in breach of confidence, but only in relation to some of the car parts. One of the problems for the Court was that Force India's claim lacked particularity, in that the pleadings did not focus on precise dimensions, so the Judge had to analyse what was confidential and what was deemed to be within the public domain. Furthermore, although it was accepted that the aerodynamicists had used the CAD files as short cuts, this was not the same as using the information to create the actual Lotus designs.

In relation to the breach of the development agreement, the Judge held that Force India breached that agreement first by failing to pay monies due to Aerolab under the contract, and that Aerolab was therefore entitled to discontinue Force India's server access. It was also decided that because Aerolab had entered into an agreement with Lotus after the Force India agreement had ended, there could be no breach of the exclusivity clause.

In relation to the copyright infringement claim, the Court unsurprisingly ruled that the CAD files constituted a literary and artistic work. The original reproduction occurred in Italy but further copies were made in the UK. This constituted an infringement , but again principally because of the lack of particularity of the pleadings, it was decided that the infringement only related to some of the car parts.

Comment

The glaring aspect of this case is that Force India 'won' the argument that its copyright had been infringed, but that the information had not been misused to the extent that it appeared in the Lotus designs. As a result, the Court awarded damages by estimating a 'fair' fee the parties might have agreed (at the time of the breach) to allow Aerolab to use the CAD files as a 'starting point' when it commenced work for Lotus.

The other glaring aspect of this case is that the Eur 25,000 awarded to Force India was set off against the monies due to Aerolab under the development agreement, which was just under Eur900,000. When legal costs were factored in, the litigation cost Force India considerably more in cash outlay than it gained.

There was clearly a strategic element to this claim and it was inevitably as much about protecting Force India's copyright (it knew that using CADs as a 'starting point' was common practice) as it was about leveraging a better deal on monies owed under the development contract. However, the case demonstrates that, when it comes to infringement of copyright and misuse of confidential information claims (whether within the sports sector or otherwise) it is vital to plead the breaches and infringements as precisely as possible.

Sport shorts

Nike sues Reebok over Tebow products

Nike has brought a claim against Reebok for allegedly improperly introducing new products bearing the name of star NFL Quarterback, Tim Tebow.

Nike recently signed a 5 year deal as the NFL's exclusive provider of on-field apparel for the NFL (taking over from Reebok) and it claims only it is licensed to use Tebow's name on merchandise. Nike stated in its claim that Reebok has no authorisation from Mr. Tebow or anyone else to use his name or other identification on such New York Jets products. Nike is seeking unspecified compensation and punitive damages from Reebok, including an account of the profits from any sales of Tebow-related apparel.

ECJ Dataco judgment

The ECJ has handed down its much anticipated judgment on Dataco, ruling that there is no database copyright protection for fixture list.

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