University Spin-offs - QMC Instruments Ltd v Celtic Terahertz Technology Ltd

Jane Lambert

 

Business and Property Courts of England and Wales, Intellectual Property (Sir Colin Birss, Chancellor) QMC Instruments Ltd v Celtic Terahertz Technology Ltd and others[2025] EWHC 3485 (IPEC) (26 Nov 2025)

This was a dispute between two university spin-off companies, which were incorporated to exploit the work of Professor Peter Ade.  Professor Ade carried out research into the far-infrared spectrum first at Queen Mary College (now Queen Mary University London) until 2001 and afterwards at Cardiff University. While at Queen Mary, he helped to set up QMC Instruments Ltd. ("QMCIL") to sell far-infrared detectors and multimesh filters, some of which he had designed.  Some years later, Professor Ade and colleagues who had followed him to Cardiff established Celtic Terahertz Technology Ltd ("CTT").

QMCIL

Queen Mary College sold QMCILto investors in 1991 and warranted that the company was the sole beneficial owner of all the IP relating to Professor Ade/s technology. It also granted QMCIL the following exclusive licence:

"The College hereby irrevocably grants to QMCIL an exclusive licence to use all know-how, designs, circuit diagrams, computer programmes and all other technical information relating to the cooled detector technology developed in the future by the College and the exclusive licence to use, sell or otherwise deal in products manufactured in accordance with the licence granted by this clause. Provided that if QMCIL does not itself wish to exploit any such technical information it agrees that the College may itself (without prejudice to other rights of QMCIL) exploit such information as QMCIL does not wish to exploit."

QMCIL also entered a profit-sharing agreement with Professor Ade and his colleagues.

The Move to Cardiff

When Professor Ade and his colleagues moved to Cardiff, QMCIL entered a collaboration agreement with them and the University.  The relationship between the company and the academics was very much the same as it had been when they were at Queen Mary, except that 85% of the filters were supplied to researchers and not to QMCIL.

CTT

Professor Ade retired in 2021, though he continued to work as a consultant. His colleague, Professor Tucker and others set up CTT to carry on the business that they thought they were entitled to conduct under the terms of their agreements with QMCIL.

The Dispute

QMCIL accused  CTT, Cardiff University, Professor Tucker, Professor Ade and a former director of QMCIL of infringing its IP rights (in particular copyright), breach of contracts and breach of fiduciary duty.   It applied for summary judgment pursuant to CPR Part 24 and an interim injunction to restrain CTT and Professors Ade and Tucker from making or selling micromesh filters.

The Hearing

The application came before Sir Colin Burss, Chancellor of the High Court, on 25 Nov 2025.  His lordship handed down judgment in QMC Instruments Ltd v Celtic Terahertz Technology Ltd and others  [2025] EWHC 3485 (IPEC) (26 Nov 2025). Sir Colin said at the outset that although the application notice referred to interim injunctive relief, there was no basis for such a claim in the material before him.

Grounds for Summary Judgment

Sir Colin's starting point was CPR24.3.  He referred to para [15] of Mr Justice Lewison's judgment in Easyair v Opal Telecom [2009] EWHC 339 (Ch):

"[15] As Ms Anderson QC rightly reminded me, 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] 2 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 [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 Chancellor noted that the Court of Appeal had approved those principles in AC Ward v Catlin [2009] EWCA Civ 1098 at [24].

The Judgment

His lordship dismissed the application for summary judgment.  In his view, the 1991 business sale and licence agreements could not be construed at this stage because a vital term had not been defined and its meaning could only be determined after a finding of fact.  Without such a finding, either party's contention was arguable.  Another problem with the 1991 agreements was that it was unclear what sort of intellectual property was involved.   This dispute was crying out for professional mediation.  He stayed the action until the end of February and directed them to seek mediation.

Costs

Sir Colin directed a detailed assessment of costs and awarded payments on account of £85.000 to Cardiff University and £94,000 to the other defendants.   He ordered such payments not to be enforced until 14 days after the expiry of the stay for mediation.

Comment

This case is listed as a decision of the Intellectual Property Enterprise Court ("IPEC") but that seems unlikely for two reasons.  The first is that the costs in IPEC are limited by CPR46.21 and the tables in para 11.1 of Practice Direction 46 - Costs in Special Cases.  There was no reference to Part 46.21 or the Practice Direction by the Chancellor or any of the parties in the judgment.  The other reason why the case is unlikely to have proceeded in IPEC is that the Chancellor is the head of the Chancery Division and sits in the Court of Appeal.  It is true that Sir Colin Birss started his judicial career in the Patents County Court and that he could sit again in that court if he so wished but it would be very unusual.

The other point to note is that contracts to assign or license unspecified intellectual rights are by no means 

uncommon and that they give rise to all sorts of difficulties.   Uncertainties as to the nature and extend of the rights in question will prolong the case's duration and add to the costs.  

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