Lennox Estates v S&W Ventures – Lennox Estates wins rare IP summary judgment
The UK’s Intellectual Property Enterprise Court (IPEC) has held in favour of the claimant in a relatively rare example of the court granting summary judgment in respect of intellectual property.
Lennox Estates is a property developer which, in 2016, acquired an option under a written agreement (option Agreement) to buy and develop a site owned by Cherubond Ltd. Lennox Estates, in conjunction with Matthew Allchurch Architects Ltd, designed a residential and office property scheme for construction on the site (creating the Matthew Allchurch Architects drawings). In 2016, Lennox Estates (as provided for in the option agreement) filed a planning application using the Matthew Allchurch Architects Drawings and, after one failed attempt, planning permission was granted by the relevant council in 2017.
Due to a downturn in the market, Lennox Estates allowed the option to lapse. S&W Ventures Ltd, another property developer, purchased the site from Cherubond in early 2020 and Cherubond supplied S&W with a set of drawings (the Cherubond drawings). It was alleged that the Cherubond drawings were closely based on the Matthew Allchurch Architects drawings. The site was sold to S&W with the benefit of the earlier planning permission. S&W, needing to make up some further drawings to vary the planning permission, instructed Places Architects to make a further set of drawings (the Places drawings), alleged to be based on the Cherubond Drawings. S&W admitted that work on the site commenced in line with the Places Drawings and Cherubond Drawings.
In 2021, Lennox Estates issued a claim against S&W, alleging that, irrespective of whether the variation application was successful, its copyright was infringed, as all drawings for the various planning consents are directly or indirectly copied from the original Matthew Allchurch Architects drawings. Prior to case management, Lennox Estates applied for summary judgment on the basis that S&W had no prospect of success at trial.
In relation to whether copyright subsisted in the Matthew Allchurch Architects drawings, HHJ Hacon started by comparing the elevations of the original buildings on the site (an old garage) with the Lennox Estates/Matthew Allchurch Architects design and held they were not at all the same. The judge further held that subsistence of copyright could only be put into doubt by evidence that the Matthew Allchurch Architects drawings were slavishly copied from another source. As there was no such evidence before the judge, and no reason given to suppose that such evidence would be available to the trial judge, HHJ Hacon was satisfied that S&W had no real prospect at trial of establishing that there was no intellectual creativity on the part of Matthew Allchurch Architects in the creation of the Matthew Allchurch Architects drawings.
In relation to whether the Cherubond drawings were derived from the Matthew Allchurch Architects drawings, the judge thought the similarities were obvious. This was "unsurprising", he said, as Cherubond (as third party defendant) had accepted that overwhelmingly the Matthew Allchurch Architects drawings were retained. The judge held there was no real prospect S&W could establish at trial that use of the Cherubond drawings, either for the construction of buildings or for making copies of Cherubond drawings in order to facilitate construction, would not infringe the Matthew Allchurch Architects drawings.
The application to vary the planning permission, which used the Places drawings, is stated on its face to be only a “minor material amendment”. The judge thought both the elevations and plans to be very similar to their equivalents in the Cherubond drawings and held there was no real prospect of S&W establishing a defence that the Places drawings would not infringe the MAA drawings.
The judge also considered whether Cherubond was entitled to make use of the Matthew Allchurch Architects drawings under an express term of the option agreement, or under an implied licence; and therefore whether S&W, being successor in title, was similarly entitled. Procedurally, the issue was that S&W had not pleaded this, and therefore permission was required to amend its defence; Cherubond as third party defendant had not expressly pleaded the alleged implied term either. In respect of the submission that there existed an implied term, the judge thought this "fanciful", as the option agreement was not concerned with ensuring that Cherubond could develop the site, nor whether it could apply for planning permission if Lennox Estates did not, nor that Cherubond could exploit the Matthew Allchurch Architects drawings. There was no need to imply such a term for business efficacy. As to whether there could be an express term, the judge found it impossible to read into the relevant term that Cherubond could grant a sub-licence to any other developer it chose. Furthermore, as the likelihood was that the Matthew Allchurch Architects drawings were created with expert input from Lennox Estates, and paid for by Lennox Estates, it would not sit well with a licence being made available to another developer.
The judge granted summary judgment to the claimant.
D Young & Co acted for the successful claimant, Lennox Estates, in this case.
Case details at a glance
Jurisdiction: England & Wales
Decision level: IPEC
Parties: Lennox Estates Ltd v (1) S&W Ventures Ltd; (2) Mr Andrew Peter Walters v (first named third party) Cherubond Ltd; (second named third party) Mr Andrew Michael
Date: 08 November 2021
Citation:  EWHC 3323 (IPEC)