The team is joined by Guest Kats Rosie Burbidge, Stephen Jones, Mathilde Parvis, and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Hayleigh Bosher, Tian Lu and Cecilia Sbrolli.

Friday, 26 July 2013

Disclosure of emails: property in information -- or agency?

Back in November of last year, guest Kat Kate Manning posted "Emails are not property ... it's not practical!", here, in which she gave a full and instructive analysis of the decision of Mr Justice Edwards-Stuart in Fairstar Heavy Transport N V v Adkins and another (here) that Fairstar did not have a proprietary right in emails sent to it but effectively hijacked by Adkins so that Fairstar could not gain access to them in order to read them. On this basis, Adkins, who had been acting as Fairstar's CEO in the course of a corporate takeover, could not be ordered to disclose those emails to Fairstar.

Last week the Court of Appeal, at [2013] EWCA Civ 886), took quite a different view. Lords Justices Mummery and Patten and Lady Justice Black held that, given that this was a dispute between a claimant and its former agent, the trial judge was wrong to look at whether there was any proprietary right in the content of emails. Instead, the claim actually turned on the nature of the agency relationship between the parties. Under an agency relationship, a principal was entitled to require production by the agent of documents relating to its affairs. Materials held and stored on a computer, which could be displayed in readable form on a screen or printed out on paper, were in principle covered by the same rules as those which applied to paper documents. Adkins was therefore ordered to disclose the emails to Fairstar on the basis of their former relationship as agent and principal.

Says the IPKat, what is of particular interest here is what Lord Justice Mummery, delivering judgment on behalf of the court, said at paragraphs 46 to 56:
"In my view, it is unfortunate that the agreed wording of the preliminary issue introduced an unnecessary complication into the dispute. The reference to a "proprietary right" was a distraction from the centrality of the agency relationship and its legal incidents. ... The assertion of a right to inspect and copy the content of the emails on his computer relating to its business affairs arises from the legal incidents of an agency relationship that survive its termination. That question can be decided, as between those parties, without a jurisprudential debate about the legal characteristics of "property", or whether the content of the emails was "information" in which property existed in this case or could exist at all [It's not often that this Kat has had cause to express agreement with the words of Mummery LJ, but this is one such occasion. Mummery LJ then goes on to explain what he means].

Everybody knows that "property" differentiates between things that are mine and things that are not mine. The law lays down criteria for determining the boundary between, on the one hand, those rights that are only enforceable against particular persons and, on the other hand, those rights attaching to things that are capable of being vindicated against the whole world. The claim to property in intangible information presents obvious definitional difficulties, having regard to the criteria of certainty, exclusivity, control and assignability that normally characterise property rights and distinguish them from personal rights.

In my judgment, the court should decline to enter into a controversy of that kind when it is not necessary to do so in order to decide the case on its particular facts. It would be unwise, for example, for this court to endorse the proposition that there can never be property in information without knowing more about the nature of the information in dispute and the circumstances in which a property right was being asserted. Some kinds of information, such as non-patentable know-how, are more akin to property in their specificity and exclusivity than, say, personal information about private life ["Ooh", says Merpel, "is this not 'entering into a controversy of that kind when it is not necessary to do so"?].

The conclusion that I have reached on this appeal makes it unnecessary to explore the question whether information in the content of the emails is property owned by Fairstar, either as a matter of fact or law. The distinction drawn in the preliminary issue between an electronic communication and the content of it and the claim to a proprietary right in the content was not the real point at issue. It has led to some confusion in the arguments advanced and to error in the outcome. As explained below, the position is that emails and their content stored and held in the computer are, in my view, either documents or should be treated as documents, for the purposes of determining the scope of the legal incidents of the agency relationship that survive its termination.

In my judgment, the judge ought to have made an order for inspection of the emails on the computer. He was not prevented from doing so by his conclusion that there was no proprietary right in the content of the emails. The absence of a proprietary right would not affect the legal right of the principal to an inspection and copying remedy against a former agent in respect of the emails. It was not necessary to decide the property issue in order to make the order for inspection or copying. To ask in a case like this the questions such as "Is there property in an email?", or "Who owns the content of an email?" is not a helpful way of stating the real issue, which is not one of ownership of property claimed against the world. The issue is one of enforcement, as between the parties, of particular rights of access by a remedy of inspection and copying, which is based on rights and duties incidental to the relationship that existed between the parties at the relevant time.
... as for the authorities cited to the judge and in this court on whether there can be property in confidential information, or whether there is property in the content of a letter, as distinct from the paper on which it is written, they relate to a point that does not need to be decided. Quite apart from the existence or non-existence of property in content, Mr Adkins was under a duty, as a former agent of Fairstar, to allow Fairstar to inspect emails sent to or received by him and relating to its business. The termination of the agency did not terminate the duty binding on Mr Adkins as a result of the agency relationship".
Quite right, says the IPKat: philosophical positions taken by Court of Appeal judges (or indeed any others) on the nature of information as property should not be encouraged, particularly if they are likely to be taken as having some degree of precedental power.  Merpel says, how about a shot at an appeal to the Supreme Court? It would be a shame to let this entertaining litigation stop short of the summit ...

Another attempt to retrieve correspondence here (comes with a 'best avoided' warning)


Anonymous said...

Sometimes I wonder at the UK Courts whether the following events happen on IP cases:
i) at first instance: the right outcome for the wrong legal reasons
ii) at second instance: the wrong outcome for the right legal reasons
iii) at third instance: the right outcome for reasons made up by the third instance, which must be the correct reasons because they are the ultimate instance.

It would be fascinating for this case to go to third instance.

Anonymous said...

I found the comment "["Ooh", says Merpel, "is this not 'entering into a controversy of that kind when it is not necessary to do so"?]." to be a little catty and frankly unhelpful.

Pointing out the existence of s situation possible is by no means entering into any controversy of the particulars of a certain factual situation. The proper answer to the question is a simple "No."

But asking the question as it has been and implying so is to obfuscate.

If you instead disagree with the notion that there in fact could never be property in information, then say so straight-up (and deal with the ramifications of IP - including trade secrets - directly).

Anonymous said...

anonymous of 14:43, or are you Ld Justice Mummery in disguise? - isn't Merpel just being a witty kitty? Don't be such a sourpuss

Anonymous said...

Anonymous of 15:00, no, I have no relation to Ld Justice Mummery.

And rather, it is the lack of wit that makes me sour. A sly attack on philosophical grounds that is not so sly makes me want to retch. Obfuscation and petty misdirection has never appealed to me.

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