meant to be repaid when the company was making a profit. Vitof subsequently developed a labelling machine called the PDFM. The circuit boards for the machine were made in the UK by a company called UKE. As the relationship between the directors deteriorated, the defendant resigned as a director of Vitof. Vitof brought proceedings against the defendant claiming, inter alia, that: " all components of PDFM and all intellectual property rights in those components were owned by Vitof as they were created by the defendant whilst a director and employee of Vitof ; " the source code for PDFM's constituted confidential information owned by Vitof ; and " Vitof owned the copyright and design rights in the original design documents that it had sent to UKE in March 2003. The defendant served a defence and counterclaim on Vitof alleging an undervaluation of the defendant's shareholding and requesting repayment of the loans he had made to Vitof. Vitof then applied for summary judgment to strike out certain aspects of the defendant's counterclaim. The defendant then applied for reverse summary judgment on the Vitof 's claims and summary judgment on his counterclaims. The court granted Vitof summary judgment against the defendant on the following basis (i) the defendant did not own the intellectual property rights in PDFM but instead held the copyright in the latest version of PDFM's source code on trust for Vitof; and (ii) the source code for PDFM's constituted information confidential owned by Vito. The courts did not decide that the designs were owned by Vitof, the court ordered a declaration to be made by the defendant that he did not own the rights to the design. Therefore, there was a real prospect of the defendant succeeding in a claim against a declaration that the company did own the design right, but that the ownership of the design rights in the designs belonged to UKE rather than Vitof. The courts struck off the defendant's claim against Vitof for undervaluation of his shareholding but he was entitled to summary judgment on his claim for repayment of his cash advances to the company, but not on his claim for expenses. Email: enquiries@rtcoopers.com You may visit our website at http:www.rtcoopers.com/practice_intellectualproperty.com for legal advice on copyright, copyright law, patent law, trademarks, designs, intellectual property, and intellectual property law. For our dedicated website on intellectual property, visit http:www.rtcoopersiplaw.com. © RT COOPERS, 2006. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances.
Dr Cooper is a commercial lawyer with considerable expertise in intellectual property law