The importance of drawing up a contract has been highlighted after a copyright dispute involving a Midlands-based company reached the High Court.
IP Enterprises, an IT firm, was successfully defended by Wright Hassall, in a claim against its ownership of copyright for a piece of software being developed for pharmaceutical giant GlaxoSmithKline (GSK).
Meridian Associates, the claimant, had won a contract to develop the software – but went into liquidation. One of its staff left the company and set-up IP Enterprises, which then agreed to take over the GSK contract after a meeting between his firm and a phoenix firm, Meridian International.
But neither drew up a contract. The only confirmation came in the form of an e-mail, sent by IP Enterprises, which outlined the main agreements made in the meeting - primarily that IP Enterprises would take control of the project. The e-mail was not disputed.
In court, Meridian said that at the meeting it was agreed it would own the copyright in the software once it was finished.
But Robert Ham QC, Deputy High Court Judge, found in favour of IP Enterprises because there was no clear agreement stating that copyright would be retained by Meridian.
The Judge added that the evidence submitted by Meridian was unreliable and “dishonest”.
Iain Colville, who defended IP Enterprises for Wright Hassall, said the case highlighted the necessity of signing contracts.
“Contracts must be properly drawn up and watertight so that any subsequent disputes can be avoided.
“In this case, Meridian’s claims were dismissed by the Court because they had no proof of any agreement. IP Enterprises sent a clear outline of the agreements made at the meeting, which went unchallenged. But any legal challenge to the copyright ownership could have avoided by involving lawyers at an earlier stage.
“Good legal advice is essential in these cases – and can save a lot of money and hassle in the long run.”
