April 9, 2021
Software Solutions Ltd claimed that 365 Health and Wellbeing Ltd had infringed copyright and database right in a computer application development framework known as the “Integrated Development Environment for Applications” (IDEA System) by marketing a mental health application called “Beating the Blues” (BTB), and specifically version 5 of BTB.
The IDEA System was developed utilising the XML format to create/structure, validate and run applications created using the IDEA System.
Three of the main components of the IDEA System were:
- the IDEA Editor, or authoring software, which allows the author-user creating an application to define the “frames” and “trees” of the application and creates XML files that conform with the XML data formats developed as part of the development of the IDEA System and referred to as the “XML Schema”;
- the IDEA Engine, which deciphers XML files that have been encoded according to the XML Schema, renders the results for the user, and handles the data flow between different parts of the system; and
- the IDEA Player, which processes the XML files and “plays” them according to the sequence of IDEA commands encoded within them.
The BTB application was the first application built using the IDEA System. It is a mental health self-help tool which provides users with a clinical programme aimed at treating depression by means of a series of eight self-guided sessions. It was not disputed that it was initially developed by Mindlife Solutions Ltd (the second claimant) and the rights in BTB versions 1 and 2 were assigned by Mindlife Solutions to Ultrasis plc in 2002.
365 Health and Wellbeing denied that BTB v5 infringed Software Solutions’ rights, asserting that in 2004/5 it had been completely rewritten from the versions created by Mindlife Solutions. It also said that it had acquired all IP rights in BTB v5 from the administrators of the Ultrasis group of companies in 2015.
365 Health accepted that copyright subsisted in the IDEA System, each of its components and its source code, as well as in the XML Schema as a literary work. Further, it accepted that Software Solutions was the owner of all copyright subsisting in the IDEA System and each of its components, but not the XML Schema which 365 Health denied was part of the IDEA System or owned by Software Solutions. 365 Health also accepted that BTB v4, and BTB v5 reproduced the IDEA System source code materials and XML Schema. It followed that all of 365 Health’s dealings in BTB v5 infringed Software Solutions’ copyright in the IDEA System source code.
The narrow remaining questions were: (i) What was the XML Schema? Was it part of the IDEA System or part of the BTB application developed using the IDEA System? (ii) Who owned the rights in the XML Schema? Was it the Claimants? (iii) It being accepted by 365 Health that copyright subsisted in the XML Schema, did database rights also subsist in it? What factual questions could the Court make which might be relevant to a consideration of additional damages under s97(2) of the Copyright, Designs and Patents Act 1998 and/or Article 13 (1) of Directive 2004/48/EC (the Enforcement Directive).
The judge found that, based on factual and expert evidence, the XML Schema, which was used to create, validate and run the BTB application and which was implicit in the BTB XML files, was substantially the same XML Schema that was utilised to create, validate and run any interactive multimedia self-help application created on the IDEA System. The XML Schema was used across the IDEA System and was an important part of the IDEA System. Software Solutions’ description of the XML Schema as being “at the heart” of the IDEA System was as good as any. Therefore, it was properly to be characterised as part of the IDEA System, not part of the BTB application.
The judge also found, on the facts, that, in respect of the 2002 assignment, the XML Schema was included within “Retained IPR” retained by Mindlife Solutions. Accordingly, Mindlife Solutions had not assigned any rights in the XML Schema to Ultrasis. It followed, therefore, that 365 Health had not acquired rights in the XML Schema from the administrators of the Ultrasis group of companies in 2015.
Accordingly, the judge held that Software Solutions owned the rights in the XML Schema, and that BTB v5, which reproduced the SML Schema, infringed the literary copyright in the XML Schema.
As for database rights, the judge found that the XML Schema provided a structure or framework for arranging independent data in a systematic or methodical way which were then individually accessible by electronic means. However, it was not clear that it was itself a collection of independent data so arranged. “Independent” data are data that are “separable from one another without their informative, literary… or other value being affected”. The question was whether they had autonomous informative value as per Case C-444/02 Fixtures Marketing Ltd v Organismos Prognostikon Agonon Podosfairou EU:C:2004:697. That case related to a structure for recording the date, time and identity of teams for various fixtures in a football league. This was held to be a database even without being populated by the results of various matches, as that data (date, time and identity of teams) was held to have an independent value in that they provided interested third parties with relevant information. There was no evidence that the various elements making up the XML Schema had autonomous informative value. Much as the individual words in a literary work cannot be separated without losing their literary value, the individual categories of what elements, attributes and data are validly contained in the XML Schema could not be separated without losing the informative value of the rules as a whole.
Accordingly, although the definition of “database” has a wide scope, Software Solutions had failed to establish that the XML Schema was a database. There was therefore no need to consider infringement. (Software Solutions Ltd v 365 Health and Wellbeing Ltd  EWHC 237 (IPEC) (9 February 2021) — to read the judgment in full, click here).
As for additional damages, the judge held that (i) the decision by 365 Health to exploit BTB v5 without a sufficient investigation was reckless and (ii) 365 Health were further reckless as they did not carry out a sufficient investigation into the allegations of infringement by Mindlife Solutions. 365 Health and John Smith had accrued benefits from the infringements, and the infringements and the litigation had caused distress to Mr Orbach, the founder of Ultrasis and its parent, Ultramind plv and Mr Uliel, the “architect” of the IDEA System,