Copyright - Lish v The Northern Block Ltd
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| Saints Cyril and Methodius, Creators of the Glagolitic Alphabet, Forerunner of Cyrillic Author Z Zograf Public Domain Source Wikimedia Commons |
Chancery Division (David Stone) Lish v The Northern Block Ltd and Another [2025] EWHC 2172 (Ch) (22 Aug 2025)
This was an application by the defendants, The Northern Block Ltd. and Jonathan Hill, its director and shareholder, for the striking out and/or summary judgment in claims by Mariya Vasilyevna Lish for breach of contract, breach of obligations following acceptance of a CPR Part 36 offer and copyright infringement. The application was heard by Mr David Stone sitting as a deputy judge of the High Court on 15 July 2025. He delivered judgment in Lish v The Northern Block Ltd and Another [2025] EWHC 2172 (Ch) on 22 Aug 2025. He dismissed the application for summary judgment but allowed the strikeout applications.
The Background
Northern Block is a type foundry which supplies typefaces or fonts in various alphabets to graphic designers, printers, manufacturers and others. The foundry was established by Mr Hill. Mrs Lish is a typeface designer who created typefaces in the Cyrillic script for the Northern Block between 2012 and 2022.
The parties fell out over the ownership of the copyright in Mrs Lish's typefaces. The foundry claimed that Mrs Lish had been its employee, whereas she contended that she had been a self-employed contractor. She started proceedings in the County Court in Newcastle for (a) a declaration that she was the owner of the intellectual property rights in various typefaces; (b) injunctions to restrain further infringement of her rights; (c) financial remedies for past acts of infringement; and (d) an account for sums Northern Block had received after termination of the 2012 Agreement.
The litigation was brought to an end when Northern Block and Mr Hill accepted Mrs Lish's Part 36 offer. Their acceptance created a new contract between the parties but a further disagreement arose over their respective obligations under that contract. Mrs Lish issued new proceedings in March 2024.
The Claim
Mrs Lish claimed in the new proceedings:
- An account and payment of Outstanding Royalties: Mrs Lish sought 60% of the sums Northern Block received for the exploitation of the typeface designs that she had designed ("the Unpaid Royalties Claim");
- Failure to Disclose and/or Account for Sublicence(s): She also sought 60% of the revenues from licensing a font known as the "Neusa Next typeface", which she argued should have been disclosed to her under the terms of the settlement of the previous litigation ("the Neusa Next Claim"); and
- Damages for Continuing Copyright Infringement: She alleged that The Northern Block continued to infringe her copyrights in 4 typefaces and the Cyrillic extensions of 4 more ("the Infringements Claim").
The Application
The defendants sought summary judgment of the Neusa Next Claim pursuant to CPR 24.3 and a strikeout of the Unpaid Royalties and the Infringements Claims as an abuse of process under CPR 3.4 (2) (b).
The applicants argued that the Neusa Next Claim involved a discrete point of interpretation of Mrs Lish's Part 36 Offer and was therefore suitable for summary judgment. They contended that the Part 36 Offer required disclosure of sub-licences and payment of future income received by Northern Block in relation to typefaces listed in paras 9 and 16 of Mrs Lish's draft Amended Particulars of Claim in the earlier proceedings. They alleged that Neusa Next had not been listed in those paragraphs and that it followed that Neusa Next did not fall within the ambit of the Part 36 Offer.
After considering CPR 24.3, Mr Stone referred to para [15] of Mr Justice Lewison's judgment in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) as approved by the Court of Appeal in AC Ward & Sons Ltd v Catlin (Five) Ltd [2009] EWCA Civ 1098 and TFL Management Services Ltd v Lloyds Bank [2014] 1 WLR 2006:
"… the court must be careful before giving summary judgment on a claim. The correct approach on applications by defendants is, in my judgment, as follows:(i) The court must consider whether the claimant has a 'realistic' as opposed to a 'fanciful' prospect of success: Swain v Hillman [2001] 1 All ER 91;
(ii) A 'realistic' claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel [2003] EWCA Civ 472 at [8];
(iii) In reaching its conclusion, the court must not conduct a 'mini-trial': Swain v Hillman;
(iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED & F Man Liquid Products v Patel, at para 10;
(v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5) [2001] EWCA Civ 550;
(vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd [2007] FSR 63;
(vii) On the other hand it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant's case is bad in law, the sooner that is determined, the better. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction: ICI Chemicals & Polymers Ltd v TTE Training Ltd [2007] EWCA Civ 725."
The parties agreed that the following rules of contractual interpretation applied to CPR Part 36 offers as they did to other kinds of agreements:
"i) The court will seek to ascertain the objective meaning of the language used by the parties in the agreement, in the relevant context: Wood v Capita Insurance Services Ltd [2017] AC 1173.
ii) Where the natural and ordinary meaning of the words used is clear and unambiguous the court should apply it, but where there is ambiguity the court will seek to favour commercial common sense: Rainy Sky SA v Kookmin Bank [2011] 1 WLR 2900 per Lord Clarke JSC at [14-30].
iii) Commercial common sense cannot be applied retrospectively and cannot be invoked where there is no ambiguity: Arnold v Britton [2015] UKSC 36."
Mrs Lish pointed to the similarity of Neusa Next to Neusa and argued that Northern Block could not have exploited Neusa Next without her licence. She added that the post-termination provisions of her agreement with Northern Block entitled her to payment on sales of discs and all other products containing typefaces from her work after that agreement came to an end.
After reviewing the documents, Mr Stone concluded that this was not a suitable issue for summary judgment. He did not accept the defendants' interpretation of the settlement terms. It was not the case that the claimant had no real prospect of success. He therefore dismissed the defendants' application for summary judgment on the Neusa Next Claim.
Strikeout Applications
Mr Stone noted that CPR 3.4 (2) (b) enables the court to strike out a statement of case (or part of it) if the statement of case is an abuse of the court's process or otherwise likely to obstruct the just disposal of the proceedings. The abuse alleged by the defendants was Mrs Lish's attempt to relitigate issues which were raised, or should have been raised, in the previous proceedings, under the principle established in Henderson v Henderson (1843) Hare 100 and developed in Johnson v Gore Wood & Co [2002] 2 AC 1 and Aldi Stores Ltd v WDP Group Plc [2008] 1 WLR 748. In Aldi, Lord Justice Thomas approved para [49] of Lord Justice Clarke's judgment in Dexter v Vlieland-Boddy [2003] EWCA Civ 14:
"i) Where A has brought an action against B, a later action against B or C may be struck out where the second action is an abuse of process.
ii) A later action against B is much more likely to be held to be an abuse of process than a later action against C.
iii) The burden of establishing abuse of process is on B or C as the case may be.
iv) It is wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive.
v) The question in every case is whether, applying a broad merits based approach, A's conduct is in all the circumstances an abuse of process.
vi) The court will rarely find that the later action is an abuse of process unless the later action involves unjust harassment or oppression of B or C."
"i) Where A has brought an action against B, a later action against B or C may be struck out where the second action is an abuse of process.
ii) A later action against B is much more likely to be held to be an abuse of process than a later action against C.
iii) The burden of establishing abuse of process is on B or C as the case may be.
iv) It is wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive.
v) The question in every case is whether, applying a broad merits based approach, A's conduct is in all the circumstances an abuse of process.
vi) The court will rarely find that the later action is an abuse of process unless the later action involves unjust harassment or oppression of B or C."
The deputy judge considered para [53 (3)], [53 (4)] and [53 (5)] of Lord Justice Coulson's judgment in Outotec (US) Inc and Anor v MW High Tech Projects UK Ltd [2024] EWCA Civ 844, para [84] of Lord Justice Nugee's in Orji and Another v Nagra and Another [2023] EWCA Civ 1289, paras [51] and [53] of Lord Justice Sales's in Playboy Club London Ltd v Banca Nazionale Del Lavoro SpA [2018] EWCA Civ 2025 and para [59] of Lord Justice Lloyd's in Stuart v Goldberg Linde [2008] EWCA Civ 2 while noting that all those cases were decided on their own facts.
The Unpaid Royalties Claim
Northern Block and Mr Hill submitted that this claim had been settled by their acceptance of the Part 36 offer in the previous proceedings. Alternatively, the claim could and should have been brought in those proceedings. Mrs Lish argued that the Unpaid Royalties Claim could not have been compromised by the settlement agreement because the issue had not been pleaded in the previous action. It was not an abuse to bring the Unpaid Royalties Claim at this stage because she only learnt about the underpayment after service of the Amended Particulars of Claim which was shortly before the defendants accepted her Part 36 offer. She notified the defendants that she intended to claim later for unpaid royalties. The defendants should not have accepted her settlement offer in the hope that the Unpaid Royalties Claim would go away,
The deputy judge agreed with Mrs Lish that the Unpaid Royalties Claim had not been compromised by the acceptance of her Part 36 offer. He disregarded the amended pleadings and party-to-party correspondence. What mattered was the filed pleadings, and they were silent on the issue. He rejected that part of the strikeout application.
Turning to the Henderson v Henderson point, Mr Stone thought it likely that Mrs Lish must have known that she had not received royalties that she believed to have been due to her under her agreement with Northern Block long before the settlement of the previous proceedings. Moreover, she admitted that she became aware of the underpayment on seeing the Amended Defence and Counterclaim. She had time to withdraw her settlement offer or at least make clear that the settlement would not cover the Unpaid Royalties Claim. Mr Stone emphasized at para [81] of his judgment that "it was not open to Mrs Lish on the basis of Dexter to allow the [previous litigation] to settle, and then commence further proceedings against the same parties in relation to the same arrangement and the same facts." In compromising the previous claim, the defendants made certain admissions as to copyright ownership that ran contrary to their pleaded case that Mrs Lish was an employee. The defendants would have had to fight the Unpaid Royalties Claim with one arm tied behind their back, underlining its abusive nature.
The Infringements Claim
Mrs Lish accepted that she could have included the Infringements Claim in the earlier proceedings, but chose not to do so for various reasons that the deputy judge listed in para [84]. Having found that it would have been an abuse of process to allow the Unpaid Royalties Claim, which had been pleaded to proceed, the deputy judge held that an unpleaded claim could be in no better position. He therefore struck out the Infringements Claim.
Disposal
Disposal
As all that remained of Mrs Lish's action was a claim for information in relation to licences granted by Northern Block in relation to one typeface only, and an account for monies owed in relation to that single typeface, which was unlikely to exceed £10,000, Mr Stone suggested that the claim should proceed in the Intellectual Property Enterprise Court Small Claims Track. He also reminded Mrs Lish that the letter containing her Part 36 offer stated that she simply wished to move forward and develop her business rather than continue protracted litigation. He hoped that the parties could come to terms.
Comment
This judgment reviews the case law on summary judgment and Henderson v Henderson but barely touches on copyright. Anyone wishing to discuss this case note may call me on 020 7404 5252 during office hours or message me through my contact form at any time.
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