DEEPMATTER LTD AGAINST THE UNIVERSITY COURT OF THE UNIVERSITY OF GLASGOW

Factual and Procedural Background

In August 2015, the Plaintiff and the Defendant entered into an Intellectual Property Right (IPR) Option and Royalty Agreement concerning a research project and licensing of technology related to 3D printing of chemical and biological reaction vessels and evolutionary chemical synthesis. The Defendant assigned certain rights in the resulting "Assigned Technology" to the Plaintiff. The Plaintiff became concerned about a company incorporated in 2019, referred to here as Company A, which shares similar commercial objectives and includes among its shareholders a holding company beneficially owned by the Defendant and the principal academic involved in the research project, Professor X. The Plaintiff apprehended that the Defendant may have licensed patents to Company A derived from the Assigned Technology.

The Plaintiff sought an order compelling the Defendant to produce specified documents and provide assistance under clause 11.4 of the IPR Option and Royalty Agreement, which requires the Defendant to provide information reasonably required by the Plaintiff to take action related to the defence or enforcement of the Assigned Technology. The Defendant denied licensing or assigning any Assigned Technology to Company A and argued the Plaintiff had waived or was barred from asserting rights in the relevant patents.

The parties agreed the documentary productions and lodged affidavits and expert reports. The court decided to determine the matter on the written evidence and submissions without further proof.

Legal Issues Presented

1. What is the proper construction and scope of clause 11.4 of the IPR Option and Royalty Agreement, specifically regarding the Defendant's obligation to provide information, documentation, and assistance to the Plaintiff?
2. Whether the Plaintiff has a reasonable basis to require the Defendant to provide the requested information and assistance in relation to the defence and/or enforcement of the Assigned Technology.
3. Whether the Plaintiff's requests exceed what a reasonable and prudent person would require under clause 11.4.
4. Whether the Plaintiff has waived or is personally barred from asserting rights in certain patents related to the Assigned Technology.

Arguments of the Parties

Plaintiff's Arguments

• The obligation in clause 11.4 is triggered when the Plaintiff wishes to take any action related to the defence or enforcement of the Assigned Technology, with "action" given its ordinary meaning to include investigations, legal advice, and preparatory steps.
• The term "reasonably" controls the entitlement, requiring an objective reasonable basis for the demand, not a necessity test or subjective assessment by the Defendant.
• The Plaintiff has a reasonable basis to seek the information due to concerns including aborted licensing negotiations with Company A, unauthorized use of code forming part of the Assigned Technology by Professor X, and similarities between the Defendant's patents and the Assigned Technology.
• The Defendant's refusal to provide full disclosure and its vigorous resistance suggest it is defending something, justifying the Plaintiff's request.
• The Plaintiff is entitled to information that would improve its ability to take action and is not limited to accepting the Defendant's assertions without access to relevant information.
• The Plaintiff rejects the Defendant's reliance on waiver and personal bar doctrines as premature and insufficiently evidenced at this stage.
• The Plaintiff accepts certain modifications to the scope of the order sought, excluding privileged communications and certain irrelevant categories of intellectual property.

Defendant's Arguments

• The Defendant has provided all information reasonably required for the Plaintiff to take legal advice regarding enforcement of the Assigned Technology.
• The Plaintiff's requests are unclear, unnecessary, and unreasonable given the volume of material already provided and the lack of evidence that further information is needed.
• The Defendant denies licensing or assigning any Assigned Technology to Company A; Professor X and the Defendant assert Company A does not use the Assigned Technology.
• The Defendant contends that the phrase "reasonably require" in clause 11.4 should be interpreted as "reasonably necessary," imposing a higher threshold than the Plaintiff suggests.
• The Defendant argues the Plaintiff has waived or is personally barred from asserting rights in the patents at issue, citing the Plaintiff's failure to exercise options or object during licensing discussions and conduct implying abandonment of those rights.
• The Defendant relies on expert opinion that the patents differ substantially from the Assigned Technology and that infringement is theoretical and dependent on unspecified acts.
• Legal advice privilege protects certain communications with patent attorneys, limiting disclosure.
• The Defendant submits the Plaintiff failed to demonstrate why further disclosure is necessary and has not adequately pursued alternative avenues of investigation.
• The Defendant stresses the need to balance disclosure obligations with protecting confidential information, especially given Company A's status as a competitor.

Table of Precedents Cited

Court's Reasoning and Analysis

The court first addressed the proper construction of clause 11.4, which obliges the Defendant to provide the Plaintiff, at the Plaintiff's expense, with all information, documentation, and assistance reasonably required to enable it to take any action in relation to the defence and/or enforcement of the Assigned Technology. The court adopted the interpretation of "reasonably required" as meaning "reasonably necessary," applying the standard of a reasonable and prudent person in the Plaintiff's position. This interpretation balances the Plaintiff's rights and the Defendant's obligations without imposing an overly onerous or subjective test.

The term "action" was held to encompass any step reasonably related to enforcement or defence, not limited to formal legal proceedings, including preparatory measures such as investigations and obtaining legal advice. The concept of "enable" was interpreted as conferring the means, competence, or ability to take such steps, not requiring complete disability before entitlement arises.

Applying this test to the facts, the court found that the Plaintiff had demonstrated a reasonable basis to seek the requested information. This was supported by the history of serious negotiations regarding licensing to Company A, the unauthorized use of code forming part of the Assigned Technology by Professor X, and the expert report indicating possible infringement issues between the Defendant's patents and the Assigned Technology. The court viewed these circumstances as sufficient to justify the Plaintiff's concerns and entitlement to information to assess and potentially enforce its rights.

The court rejected the Defendant's argument that the Plaintiff had waived or was personally barred from asserting rights at this stage, noting the lack of sufficient demonstration and the preliminary nature of these claims. The court also rejected the Defendant's suggestion that the Plaintiff must prove inability to take advice without the information sought, emphasizing the clause's purpose to improve the Plaintiff's ability to act.

Regarding the Defendant's objections about the burden of searching voluminous data, the court considered these concerns overstated and emphasized that the Defendant must make reasonable efforts to locate information where it is likely to be found.

The court accepted certain modifications to the scope of the order sought, including excluding privileged communications and references to intellectual property outside the scope of clause 11.4.

Holding and Implications

The court granted the Plaintiff's request to the extent set out in the adjusted schedule, subject to agreed deletions and modifications. The Defendant's pleas-in-law and objections were repelled.

HOLDING: The Plaintiff is entitled under clause 11.4 of the IPR Option and Royalty Agreement to require the Defendant to provide all information, documentation, and assistance reasonably necessary to enable it to take any action related to the defence and/or enforcement of the Assigned Technology, including the material specified in the adjusted schedule.

IMPLICATIONS: The decision enforces the contractual cooperation obligations between the parties, facilitating the Plaintiff's ability to investigate and potentially enforce its intellectual property rights. The ruling does not resolve underlying disputes about infringement or waiver but clarifies the standard and scope of disclosure obligations. No new legal precedent beyond the interpretation of clause 11.4 in this context is established.