When is copyright infringement unacceptable but condoned? When there are implied contract terms

Bristol Groundschool Ltd v Intelligent Data Capture Ltd and others [2014] EWHC 2145 (Ch), a 2 July 2014 decision of the Chancery Division, England and Wales, saw Richard Spearman QC, sitting as a deputy High Court judge, address various issues concerning ownership of copyright and breach of contract in a dispute relating to aviation training materials. The decision is lengthy (228 paragraphs) and raises a dozen or so issues, which readers are invited to read at their leisure.

Without the right software,
data mining is a real pain ...

The background and decision run as follows: in short, Bristol Groundschool, a company that specialised in training commercial pilots, brought suit against Intelligent Data (actually against several corporate and individual defendants) who supplied training materials. The Deputy Judge held that, on a true construction of its agreement with Intelligent Data, Bristol Groundschool owned most of the copyright in the artwork included in the electronic training materials and that the corporate defendants had infringed those copyrights by reproducing the artwork for their own business purposes, two of the three individual defendants being liable as joint tortfeasors because they were responsible for the day-to-day operations of those companies. Intelligent Data was also liable for breach of contract by failing to provide technical support to students to whom Bristol Groundschool had supplied the training materials. On the contractual side of things, the Deputy Judge held that a reasonable period for giving notice to terminate this agreement would have been nine months, giving Bristol Groundschool enough time to make other arrangements. On this basis, Intelligent Data was in breach of contract by threatening not to fulfil its obligations under the agreement unless Bristol Groundschool agreed new terms.

Learning to fly was so much
easier in the olden days ...

The interesting bit of this ruling was that the defendants counterclaimed against Bristol Groundschool and its managing director for infringement of copyright, breach of confidence, circumventing copy protection, malicious falsehood, and conspiracy to injure by unlawful means. Said the judge, the agreement contained an implied duty of acting in good faith: it transpired that Bristol Groundschool had secretly downloaded Intelligent Data's materials to use on its own behalf. This was commercially unacceptable behaviour which constituted copyright infringement -- but, however reprehensible that may be, even when added to other contractual breaches perpetrated by Bristol Groundschool, that did not amount to repudiation of the contract.  This was because there were extenuating circumstances -- including Bristol Groundschool's legitimate concerns about its own business, the fact that the downloading was essentially precautionary and the additional fact that the downloaded material was only used for limited purposes, causing minimal financial damage to Intelligent Data.  Even if one or more of the breaches had been repudiatory, he concluded, that would not have given Intelligent Data a defence to the claim against it for breach of contract.

This feels to this blogger like the sort of set of facts that, in an ideal world, would be dealt with best by mediation: as it is, neither comes out of the litigation with a clean bill of health, and the six days of hearing suggest that this was not a ruling that came cheaply.