Oxford case (7): permission to appeal refused

noThe Oxford case keeps on giving… material for more articles!

This week, the parties were back in court, for a hearing on consequential issues: liability for costs, confidentiality, and whether they could appeal the decision. The further hearing is reported as Oxford University Innovation Ltd v Oxford Nanoimaging Ltd (Re Consequentials) [2023] EWHC 138 (Pat) (26 January 2023).

  1. Costs. After hearing technical arguments about the amount of legal costs that should be paid, the judge ordered ONI to make an interim payment to OUI of £925,000, in respect of OUI’s legal costs. Nice for the law firm, Powell Gilbert, who represented OUI! As the judge pointed out, the amount of the costs that ONI has been ordered to pay exceeds the amount of royalties that they previously refused to pay, which led to this case being brought.
  2. Confidentiality. Oxford sought confidential treatment of certain evidence that had been put before the court. As the judge explained, the evidence “…references the internal discussions and documentation of the Intellectual Property Advisory Group (“IPAG”) of the University and OUI. On that basis [Oxford argued that confidential treatment] is appropriate because there is a risk that this material contains information which remains genuinely commercially confidential and the disclosure of which could prejudice Oxford or a third party.” The judge granted the confidentiality order requested, but with leave for a party to apply to the court to vary this order on notice.
  3. Appeal. The judge refused leave to appeal, on the grounds that “an appeal stands no real prospect of success and there are no other good reasons for granting permission.” ONI has a small window of time, in which it can apply directly to the Court of Appeal for leave to appeal, despite the judge’s refusal – a second bite of the cherry.

Why an appeal is inappropriate

Unusually, this judgment gives detailed reasons why an appeal is inappropriate. The judge summarises each of the main arguments in the case, and why it stands no prospect of being overturned on appeal. IP Draughts is not sure whether the judge’s comments are directed primarily at the Board of ONI, to persuade them to drop the case, or to the Court of Appeal judge to whom ONI might apply for permission to appeal. The judge seems to be suggesting that the case has so many complex features that a Court of Appeal judge, coming to the matter cold, might find it difficult to see the wood from the trees. This could be regarded as helpful or impertinent, depending on your view. He concludes:

…the prospect is vanishingly small of the English courts reaching decisions with the aggregate effect that ONI would end up in a better position than it enjoys at present with respect to payment of royalties for key aspects of design of the Nanoimager which appear, prima facie, to be at percentages in the normal range for products of this kind.

Another way of putting this might be: while Mr Jing might personally wish to campaign for fair treatment of students, he is not a party to the proceedings. The case concerns a claim for unpaid royalties, which was brought against his current employer, ONI. ONI defended the claim, presumably on business grounds. ONI’s business interests are unlikely to be improved via an appeal.

Fresh issues

The judge also mentions that an appeal might result in additional, legally complex issues being raised by the parties in litigation.

Were the Court of Appeal to overturn the Main Judgment on the grounds suggested, that would open the door to further proceedings including as to what relief or remedy should be granted. On the assumption that an appeal succeeded, further proceedings would need to address the following …points …

The judge lists several points. They include:

  • whether an IP policy should be regarded as unfair based on its wording, even if in practice the policy is interpreted more narrowly than the wording suggests [a similar point was raised by IP Draughts in an earlier article on this blog]
  • even if Mr Jing has not assigned his interest in the licensed patents, has Oxford retained some ownership rights in the licensed patents, because there were two other inventors and they validly assigned their interests to Oxford
  • what the effect of the previous point is on the validity of the licence agreement to ONI
  • whether the parties are “estopped” from raising any of the arguments that were made in the case (eg that Mr Jing rather than OUI owns the licensed patent), on the basis that they voluntarily entered into the licence agreement
  • whether, if the licence agreement is void, any legal principle such as restitution would result in any reallocation of the benefits previously obtained in respect of the licence (eg revenue shares)

The judge opines that deciding these issues would be of “very limited wider interest” (but IP Draughts would be interested!). He also repeats a point, made in his main judgment in the case, that finding the licence agreement invalid on the ground that Mr Jing owns the IP, would lead to business uncertainty for ONI that its Board (as distinct from Mr Jing personally) might consider not to be in the company’s best interests.

In essence, his latest judgment makes an argument, on legal, business and even emotional grounds, for ending the litigation now rather than trying to prolong it through an appeal.

IP Draughts looks forward to hearing whether ONI applies directly to the Court of Appeal for permission to appeal, and if so, whether it obtains permission.

The business context

IP Draughts is also curious to know what ONI’s US-based investors think about the company’s expensive decision to defend OUI’s claim for royalties. Were they expecting ONI to win the case? Did they realise that under the English system, unlike the US system, the loser generally has to pay the winner’s legal costs? Or were they content for shareholder funding to be spent on what might be considered altruistic grounds, in support of a campaign to improve the lot of students at UK universities? The judgment mentions that:

The finance team at ONI has been replaced and currently matters are being handled by an interim CFO who needs to call upon external assistance in order to finalise royalty statements.

No reasons are given for this replacement of staff, so it is unclear whether it is linked to the outcome of the case.


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4 responses to “Oxford case (7): permission to appeal refused

  1. fiarguo

    “The judge seems to be suggesting that the case has so many complex features that a Court of Appeal judge, coming to the matter cold, might find it difficult to see the wood from the trees.” Mr Daniel Alexander KC knew every detail of the case, maybe he felt uneasy some time because the judgment is unfair.

  2. fiarguo

    there was a casual 3-month contract, and an Undertaking of work for 8 months, just as Mr Daniel Alexander KC wrote.

  3. fiarguo

    Mr Daniel Alexander KC wrote about the contract signing process of Mr Jing’s internship:
    (1) On 6 February 2013, when he started, he signed an undertaking that was countersigned by Professor Kapanidis on 7 February 2013. The handwritten dates on the Undertaking state that its terms applied from 1 March 2013 to 30 September 2013.
    (2) Paragraph 4 of the Undertaking provide das follows:
    “I accept that the terms of the University Statutes relating to intellectual property apply to me; and that the University will be entitled in accordance with those terms to claim ownership of intellectual property which I produce. “
    (3) On 11 March 2013, after Mr Jing had started work as an intern, Professor Kapanidis confirmed that his laboratory would pay Mr Jing £6,000 for his internship in an e-mail.
    “OK. I will pay you £6000 for a 7-months internship (although the employment will appear as a casual 3-month contract to make hiring easier), which will include your summer vacation. OK? There will be a single payment.”
    (4) On 15 April 2013, Mr Jing signed a formal letter of engagement, a greeing to work as a Research Intern in Professor Kapanidis’ laboratory. This included the following:
    “1. Type of work
    You will provide your services as a Research Intern as and when required‚
    As regards the performance of your services, you will:
    (a) be responsible to Dr A Kapanidis (your “supervisor”) or as otherwise specified;
    11. Intellectual Property
    By agreeing to the terms of this letter, you expressly agree that the terms of the University Statute and Regulations (see attached list of University Statutes and Regulations) relating to intellectual property apply to you; and that the University will be entitled in accordance with those terms to claim ownership of intellectual property which you produce while carrying out work for the University”.
    From the process that Mr Daniel Alexander KC wrote, we can clearly know:
    1. The approach by which the contractual relation between Oxford and Mr Jing was signed is uncommon.
    2. Some terms used in the Undertaking, letter and e-mail are unfair.
    3. These terms are contrary to the requirement of good faith.
    4. These terms result in the existence of a significant imbalance, to the detriment of Mr Jing.
    5. These terms result in the significant imbalance between the rights and obligations of Mr Jing under the contract.

    • Without checking, I don’t recall whether all of this information is mentioned in the judgment. One of the questions I have is whether there was a genuine contract of employment with the university. If there was, then I’m not sure that the consumer protection issues that you mention are relevant. Can someone be an employee and a consumer at the same time? My instinctive view is no, but I haven’t studied this issue. If there was no contract of employment, then the issues you mention (points 2-5) come back into play. The judge considered these issues in relation to the period of studentship and concluded that the university was not in breach of consumer protection law.

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