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Recycled judgment will not be enforced in England

SAS Institute Inc v World Programming Limited [2018] EWHC 3452 (Comm)

Paul Lowenstein QC and Josephine Davies acted for the Defendant (WPL) which, on public policy, res judicata, abuse of process and statutory grounds successfully resisted enforcement of a US Judgment for some US$26 million. Moreover, WPL obtained the first ever judgment under s.6 of the Protection of Trading Interests Act 1980 (PTIA). This means that WPL will recoup two thirds of all sums paid to SAS in respect of the treble damages judgment (for some US$78 million) which SAS had obtained in the USA. 

The case is important in relation to worldwide software licensing, public policy and enforcement of US treble damages judgments. 

Summary of facts

WPL created software which had similar functionality to software produced and licensed by SAS, which had until then been the only software with that functionality. SAS sued WPL for breach of licence agreement and copyright infringement first in England and then in the North Carolina, USA. WPL won in the English proceedings, which included a reference to the European Court of Justice and an appeal to the Court of Appel, in part because the EU Software Directive rendered the contract terms relied upon by SAS null and void. However, SAS succeeded in its subsequent but overlapping action in North Carolina, broadly because the North Carolina court refused to apply the Software Directive. SAS was awarded damages in North Carolina for breach of contract, fraudulent inducement to contract and treble damages under the Unfair Deceptive Practices Act (UDTPA).

Enforcement action in England

Notwithstanding the earlier English action, SAS sought to enforce the ‘fraud’ and UDTPA elements of its North Carolina judgment in the Commercial Court in England. 

Judgment for WPL on the claim and the counterclaim

In a rare modern example of the English court applying principles of public policy to refuse enforcement of a commercial judgment from a jurisdiction with a developed legal system, Cockerill J on 13 December 2018 following a full trial refused enforcement. She held that recognition/enforcement were precluded by public policy because:

  • The prior English judgment was inconsistent with the US judgment because there could be no ‘fraud’ where the contract terms in question had previously been found by the English court to have been a nullity.
  • The Henderson v Henderson abuse of process principle applied: SAS could have brought the US claims in the earlier English proceedings (obiter); and
  • Enforcement would have conflicted with the Software Directive whose pro-competitive purpose is to prevent the monopolisation of ideas (obiter).

Cockerill J also held that s.5 of the PTIA precluded enforcement of any part of the treble damages judgment (not just the two thirds ‘non-compensatory’ or multiplication element). In doing so, she declined to follow the obiter dictum of Mann J in Lucasfilm and followed Lord Hodge’s decision in Service Temps, a Scottish case.

Finally, Cockerill J awarded damages under s.6 PTIA allowing WPL to recoup all ‘multiplication’ sums paid to SAS in execution of the US treble damages judgment.

Paul Lowenstein QC and Josephine Davies were instructed by Alexander Carter-Silk and Claire Blewett of Brown Rudnick LLP.

A copy of the judgment is attached.

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AttachmentSize
SASWPL judgment final 131218 Sealed.pdf321.67 KB