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Cite as: [2015] EWHC 41 (IPEC)

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		Neutral Citation Number: [2015] EWHC 41 (IPEC)
		Case No: CC13P04238

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
INTELLECTUAL PROPERTY ENTERPRISE COURT

Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL

16/01/2015

B e f o r e :

HIS HONOUR JUDGE HACON
____________________

Between:

	McCORMACK TRAINING LIMITED	Claimant
	- and -
	GOLDMARK TRAINING SERVICES LIMITED RUTH GOLDSWORTHY HIPPOZONE LIMITED	Defendants

____________________

Charlotte Scott (instructed by Gateley LLP) for the Claimant
Scott Farnsworth (instructed by Scott Farnsworth Solicitors) for the Defendant
Hearing dates: 6-7 November 2014
____________________

HTML VERSION OF JUDGMENT
____________________

Judge Hacon :

Introduction

This action concerns the alleged copying of a training manual used by those who teach techniques for physical restraint. The manual was published by the claimant ("MTL") in 2010. MTL is effectively Andy McCormack, who is its sole director, shareholder and employee.

The techniques demonstrated in the text and photographs of the manual ("the MTL Manual") are typically employed by those who work in the security industry – in jobs involving the protection of property or individuals, such as in night club security. The MTL Manual is not intended for use by people in the security industry themselves, but is designed to support courses to teach trainers of physical intervention techniques. These are known as 'level 3' courses and are to be distinguished from 'level 2' courses in which the trainers go on to teach those who work or want to work in the security industry. Level 2 courses, which tend to involve a subset of the skills and techniques taught in a level 3 course, are tailored to a particular branch of the security industry whereas level 3 courses cover a broader range of techniques.

MTL claims copyright in a number of works contained in the MTL Manual. MTL alleges that each of these copyrights has been infringed by the first defendant ("Goldmark") by reason of Goldmark's creation of its own manual called the "HZL Hostile and Hazardous Environment Training" manual ("the Goldmark Manual"). It is also alleged that the second defendant ("Mrs Goldsworthy") is jointly liable with Goldmark for the infringing acts. There was a claim for infringement against the Third Defendant ("Hippozone") but that was settled by a consent order dated 2 October 2014. Hereafter "the defendants" should be taken to mean just Goldmark and Mrs Goldsworthy.

The alleged copyright works

Photographs

At the end of May 2009 Mr McCormack arranged for photographs to be taken by Paul Lane of individuals carrying out physical intervention techniques. The photographs were taken by Mr Lane ("the Lane Photographs") on 31 May 2009 at the Ramada Hotel, Birmingham, with Mr McCormack giving instructions to the individuals being photographed. By a written assignment dated 25 March 2013 Mr Lane assigned the copyrights in the Lane Photographs to MTL.

The defendants accept that copyright subsists in the Lane Photographs and that the copyrights are owned by MTL. It is also common ground that copies of the photographs were created for use in the Goldmark Manual until a complaint was raised by Mr McCormack in August 2010, following which the copy photographs were replaced – save for four which were overlooked. The defence in relation to infringement of copyright in the Lane Photographs rests on an alleged licence granted by Mr McCormack to Goldmark on 14 February 2010. The defendants also rely on an alleged estoppel based on a representation by Mr McCormack on 14 February 2010, but this fails if there is no basis for a licence and is unnecessary if there is a licence.

Literary works

Mr McCormack states that one of the reasons the Lane Photographs were created was so that they could be used by the Institute of Conflict Management ("the ICM"), an organisation established to reduce aggressive and violent behaviour and to promote safe methods of containing such behaviour. At a date not indentified Mr McCormack said that he created handwritten notes ("the McCormack Notes") which described in words the methods demonstrated in the Lane Photographs. By a written assignment dated 27 March 2013, copyright in the McCormack Notes was assigned to MTL. According to Mr McCormack, these were typed up by Mrs Goldsworthy and become the text in the MTL Manual used to describe each technique shown in a Lane Photograph ("the text boxes"). MTL alleges that the McCormack Notes were directly or indirectly copied by the defendants into the Goldmark Manual. MTL relies on the substantial similarities between the Mr McCormack Notes and the text boxes in the Goldmark Manual as proof of copying and thus infringement by Goldmark.

The defendants fully accept that these similarities exist. The defendants' case is that the wording of the text boxes in the Goldmark Manual was created by Mrs Goldsworthy. They say that Mr McCormack made his handwritten notes solely for the purposes of these proceedings in order to create a bogus 'original' literary work and did so by copying the text boxes in the Goldmark Manual or the MTL Manual.

Dramatic works

MTL relies on two types of dramatic work. The first ("the MTL Techniques") consist of the techniques set out in the MTL Manual. Paragraph 5 of the Particulars of Claim records that "many" of these techniques were developed by Mr McCormack in his earlier careers teaching in the army and police, without stating which are said to be the original work of Mr McCormack. The dramatic works are in each case defined by the combination of a Lane Photograph and the text box accompanying the Lane Photograph in the MTL Manual. Annex 6 to the Particulars of Claim identifies which of these dramatic works is alleged to have been copied by Goldmark by setting out a series of Lane Photographs and the equivalent photograph appearing in the Goldmark Manual.

The second type of dramatic work relied on consists of the sequence of the MTL Techniques as it appears in the MTL Manual, which is said to be a further overall dramatic work.

The pleaded acts of infringement by Goldmark are not performances of the dramatic works, but the various productions of the Goldmark Manual.

The defendants deny, as a matter of law, that either the MTL Techniques individually or the sequence of MTL Techniques relied on constitute dramatic works in which copyright can subsist. Goldmark also denies copying.

Joint liability

MTL alleges that Mrs Goldsworthy is jointly liable for the acts of Goldmark complained of. This is on the ground that she is sole director and owner of half the issued shares of the company, is responsible for the day-to-day running of Goldmark and thus procured all relevant acts. Mrs Goldsworthy admitted that she was sole director and owner of half the shares in Goldmark, but otherwise the allegation of joint liability is met with a denial in the Defence.

Additional damages

MTL claims additional damages pursuant to s.97(2) of the Copyright, Designs and Patents Act 1988.

The dispute about facts

MTL's case in more detail

Mr McCormack's account of the relevant facts begins with the MTL Techniques which MTL had been teaching since at least 2005. He said the Lane Photographs of these techniques were taken at the Birmingham Ramada Hotel in May 2009 for submission to the ICM. At that time the ICM did not run courses of its own but certified courses run by other organisations, giving them credibility. The Lane Photographs and the MTL Techniques they illustrated were presented to the ICM for its approval.

At around this time the ICM formed a committee to create a manual for use by its members to teach level 2 and level 3 courses in co-operation with the Security Industry Authority ("the SIA"), an organisation responsible for regulating the security industry and licensing its members. In about 2008 the SIA had decided to specify appropriate physical interventions which could be used by its members. In early 2009 a working group within the ICM was formed to create a training manual of physical interventions that could be used by all its members and which complied with the specifications introduced by the SIA. The member companies needed manuals that could gain accreditation from national examination bodies such as Edexcel and NOCN in order to offer their customers appropriately accredited courses.

According to Mr McCormack the initial plan was to create a standardised manual of relatively limited scope to which ICM members could add their own preferred physical intervention techniques. This was rejected by the SIA which wanted a single approved manual. The project therefore went forward in the form preferred by the SIA – or rather two forms, the L323 manual for level 3 courses and L225 for level 2.

The ICM working group included Mr McCormack and Mr Fox, a member of the ICM and a former director of a company called M3T Limited ("M3T") which provided training services. Goldmark, which was incorporated on 18 February 2010 with Mr Fox and Mrs Goldsworthy as directors, is the successor to M3T's business. Mr Fox is the brother of Mrs Goldsworthy.

Since about 1998 the ICM had been building up a library of photographs of physical intervention techniques supplied by its members. This was referred to by Mr Fox as 'the ICM skills register'. The techniques set out in the ICM manual were to be selected from the ICM skills register. Mr McCormack was asked for permission to incorporate MTL Techniques and Lane Photographs in the ICM Manual. Mr McCormack said that he agreed to this on condition that the MTL Techniques and the Lane Photographs were only to appear in the ICM manual and thus would only be used by those who bought the ICM manual and who had signed a licence to deliver the ICM course.

Meanwhile MTL wanted a manual for its sole use, distinct from the ICM manual. Mr McCormack was looking for someone to assemble the Lane Photographs and the McCormack Notes into what would become the MTL Manual for use in association with a course to be offered by MTL – a different course to that provided by the ICM. Mr Fox referred Mr McCormack to Mr Fox's sister, Mrs Goldsworthy. Mr McCormack said that he contacted Mrs Goldsworthy and sent her a selection of the Lane Photographs and also the McCormack Notes. Mr McCormack was consistently vague about the date and the details of how this was done.

Mr McCormack said that Mrs Goldsworthy went to Birmingham to see Mr McCormack demonstrate the MTL Techniques. She typed up the McCormack Notes and arranged them in separate texts to accompany each of the corresponding Lane Photographs she had been given. Mrs Goldsworthy created a copyright notice, "Copyright McCormack Training Limited", which appeared on the MTL Manual and on an accompanying compact disk.

The MTL Manual was presented to NOCN for accreditation and received NOCN's approval in May 2010. According to Mr McCormack the presentation to NOCN was on 18 April 2010, but he provides nothing to support this. (Mr Fox says that the date of the presentation was 26 May 2010, likewise with nothing to back this up).

Mr McCormack said that in August 2010 he became aware that Goldmark had created another manual – the Goldmark Manual. MTL's case is that this was assembled using the McCormack Notes and some of the Lane Photographs. There followed an exchange of emails to which I will return.

MTL's case is that the Goldmark Manual was created in or shortly before April 2010 and its creation and sale infringed MTL's copyright in the Lane Photographs (or some of them) and in the McCormack Notes, and also infringed copyright in the MTL Techniques. The Goldmark Manual came in a number of versions:

(1) A copy was given to Paul Pearce who attended a course run by the defendants in April 2010. Mr Pearce is the owner of a training firm called 'EC Training'.

(2) A revised version was sent to Mr Pearce in September or October 2010.

(3) A version was sold to Hippozone in April 2010.

(4) A revised version was sold to Hippozone some time later. Al Prescott, a director of Hippozone, supplied it to a trainer, Barry Doherty.

The defendants' case in more detail according to the witness statements of Mr Fox and Mrs Goldsworthy

The defendants agree that early in 2009 the ICM formed a committee to create an ICM training manual of physical interventions that could be used by all its members which complied with the specifications introduced by the SIA. Mr Fox said that the committee consisted of Phil Hardy (the ICM Chairman), Trevel Henry (a director of the ICM), Stuart Hex (the ICM Secretary), Mr McCormack and Mr Fox. The intention was that once the manual was complete and satisfied the SIA, the ICM would obtain accreditation from Edexcel and thus the ICM members would be able to offer courses approved by Edexcel.

The defendants say that in the course of 2009 some members of the ICM thought that its training manual was taking too long to prepare. Mr Fox said that Mr Holyland of the SIA told him that individual organisations could submit their own manuals to the SIA for approval instead. Therefore in August 2009 a parallel working group of ICM members was set up. Mr Fox said that it consisted of himself, Mrs Goldsworthy, Al Foster and Trevel Henry. This group decided to create an alternative manual which became known as the 'white label' training manual. The name came from the idea that those undertakings to which the manual would be sold (and which could be ICM members or not) would each attach its own livery and so present the manual as the undertaking's own branded manual. Mr Fox said that the 'white label' project was funded by his company M3T. He also said that Mr McCormack was aware of it since he was a member of the ICM group working on the ICM manual.

Mr Fox said that the 'white label' programme, running in parallel with the programme to create the ICM manual, would be for ICM members and others wishing to have a more comprehensive manual.

Mr Fox went on to say that the physical intervention techniques selected for the white label manual all came from the ICM skills register. There were meetings at which Mr Foster demonstrated such techniques and at which Mrs Goldsworthy made notes. The notes were adapted to become step-by-step instructions as to the techniques set out in the white label manual illustrated by photographs. They became the wording of text boxes in what were called 'lesson plans' for trainers created by Mrs Goldsworthy on her home computer from September 2009. Thus, the wording of the text boxes in the white label manual, created between about September 2009 and March 2010, was done by Mrs Goldsworthy. Mrs Goldsworthy said that the white label manual was almost completed by January 2010.

The photographs in the lesson plans to begin with also came from the ICM skills register but were substituted at an early stage. On 14 October 2009 Mr Foster conducted a training session in Leicester. Mrs Goldsworthy took photographs of trainees performing the various techniques according to Mr Foster's instruction. These photographs replaced those taken from the ICM register.

On 14 February 2010 Mr Fox, Mrs Goldsworthy and Mr Henry met to finalise the white label manual. Also present was Mr McCormack. According to Mr Fox, Mr McCormack had received a copy of the draft white label manual in late January or early February 2010. He had compared it with the draft ICM manual and was impressed with the white label manual. At the meeting he offered better quality photographs of his own to be used in the white label manual. He provided such photographs during the next two to three days and Mrs Goldsworthy incorporated them into the draft white label manual by 26 February 2010.

Mrs Goldsworthy said that she had not met Mr McCormack before the meeting of 14 February 2010. According to her, Mr McCormack fully understood the intended purpose of the white label manual – specifically that it could be purchased by any party (ICM member or not) wishing to offer relevant training services and would be presented bearing the brand of that party.

Mrs Goldsworthy said that in late February 2010 Mr McCormack asked her to create a copy of the white label manual with MTL branding. She produced an invoice dated 23 March 2010 for £200 in relation to that work. Mr Fox's witness statement differed in this regard. According to him Mr McCormack only asked for an MTL version of the white label manual after Hippozone had used one to gain accreditation from NOCN, some time after late April 2010. The two witness statements were consistent, however, in stating that Mr McCormack sought use of an MTL-branded white label manual in order to obtain accreditation after he had heard that Hippozone had used a white label manual for that purpose.

Meanwhile progress on the ICM manual continued. A copy of the draft was presented to the ICM board on 25 March 2010 for approval. The board finalised the list of techniques to be used in the ICM manual. On the same day Mr Fox asked Mrs Goldsworthy to 'map across' the ICM manual techniques, that is to say include them in the white label lesson plans.

Mr Fox stated that around this time a sense of urgency was imposed by the SIA, which wanted to launch the ICM manual on 12 April 2010 and by that time for the manual to be accredited by Edexcel. The deadline was missed which, according to Mr Fox, caused a degree of rancour within the ICM.

Mr Fox said that Al Prescott, a director of Hippozone, became impatient regarding the delay. He contacted Mr Fox in April 2010 inquiring whether he could gain accreditation using a white label manual. Mrs Goldsworthy said that she spoke to Mr McCormack to inform him of this proposal and that Mr McCormack agreed to the sale of a white label manual to Hippozone. On 22 April 2010 a copy was sold for £500 and some time thereafter it received accreditation from NOCN.

Inspired by this, according to Mr Fox, Mr McCormack wanted MTL to obtain similar accreditation. Mrs Goldsworthy said that she assisted Mr McCormack with the forms when MTL applied for accreditation using the white label manual. Mr Fox accompanied Mr McCormack to a meeting with NOCN at which MTL was given accreditation for the manual. (It is common ground that Mr Fox accompanied Mr McCormack to such a meeting, but Mr McCormack says that it had nothing to do with a white label manual. Mr McCormack's evidence was that the meeting with NOCN was on 18 April 2010 and he relied on this to undermine Mr Fox's suggestion that Mr McCormack had been inspired by the accreditation of the Hippozone manual since that happened four days later. Mr Fox said that the meeting with NOCN was on 26 May 2010.)

In brief, according to the defendants the MTL Manual on which MTL founds its case was nothing more than an MTL-branded white label manual. The photographs in the white label manual were Lane Photographs used with the permission of Mr McCormack and the text boxes accompanying those photographs were drafted by Mrs Goldsworthy.

The Defence

The pleaded Defence, with a statement of truth signed by Mrs Goldsworthy, differs from the witness statements of Mr Fox and Mrs Goldsworthy in its account of what happened in an important respect. It makes no mention of any parallel working group or programme at the ICM for the creation of a white label manual. According to the Defence there was a single programme at the ICM to create a manual – the ICM manual – but this was intended to be used as a 'white label' product in the limited sense that it was to be made available to ICM members for individual branding (not, apparently, others). The Defence states that this was understood by Mr McCormack.

Otherwise the Defence is similar to what Mr Fox and Mrs Goldsworthy say at least in its essentials: the physical interventions selected for the manual were drawn from the ICM register, the text boxes used in the manual were drafted by Mrs Goldsworthy and the photographs used were provided by Mr McCormack at his suggestion at the meeting of 14 February 2010.

There are, however, further differences between the Defence and the account given by Mr Fox and Mrs Goldsworthy. Among these, paragraph 14.25 of the Defence pleads that the meeting of 14 February 2010 was the first time Mr McCormack had sight of the draft ICM (white label) training manual. This does not accord with Mr Fox's evidence that Mr McCormack had seen the ICM draft manual and the (separate) white label manual in late January or early February of that year.

A detail appears in the Defence which is not mentioned by either Mr Fox or Mrs Goldsworthy. The Defence pleads at paragraph 14.39 that a bespoke ICM white label manual bearing MTL livery, created by Mrs Goldsworthy at Mr McCormack's request, included four additional lesson plans that were specific to MTL.

The email exchanges

Neither of the rival accounts of the facts, from Mr McCormack on the one hand and Mr Fox and Mrs Goldsworthy on the other, which I have summarised above, is to any significant degree corroborated by documentary evidence. However, both sides rely on email exchanges between June and December 2010 to support their respective cases.

On 10 June 2010 Mrs Goldsworthy sent an email to Mr McCormack in response to an email not in the evidence. It seems that Mr McCormack had raised an objection to the use of his materials. Mrs Goldsworthy said this:

"Hi Andy, perhaps I am miss reading this but I am a little concerned about the last paragraph in this email. My understanding of the purpose of the letter was to limit any 'fall out' from the ICM, we had already agreed verbally that both McCormack Training Ltd & Goldmark Training Services Ltd were able to use each other's materials freely as part of our working partnership, to produce a quality instruction manual which would be approved by the awarding bodies.

McCormack Training Ltd contributed the images and handouts, all other materials have been produced by Goldmark Training Services Ltd, with some information obtained via the ICM which is free for the use of its members.

The impression I get from the final paragraph in the email you have sent to Stewart is that you employed Goldmark Training Services Ltd to provide you with a full manual, which when you have approval, you will let us use for our sole purpose and that we cannot use our own materials without permission from yourself.

In reality you have employed Goldmark Training Services Ltd to:

Review our V5 of the images and wording to correct any errors so that the wording reflected the images – for approval submission to the ICM.

Review the image assessment forms so that they reflected the correct process – for approval submission to the ICM.

Brand the manual to McCormack Training Ltd, using the company logo and ICM QAC logo.

Provide 4 additional lesson plans, adjusting the assessment forms and documentation to include the variation techniques.

Produce 2 master copies and 4 instructor packs.

It goes without saying that we would under no circumstances 'sell' the McCormack Training manual, and that has never been our intention. However you are aware that we are submitting the Goldmark Training Services Ltd pack to Edexcel for approval (no Refs to McCormack Training Ltd will be in it, with the exception of the acknowledgment of the work and contributions made by McCormack Training Ltd in order to produce the manual) and that we have been seeking to sell the pack to other providers, by 'branding' it specifically to the respective company with the endorsement page again acknowledging McCormack Training Ltd and Goldmark Training Services Ltd for their production of the manual which we discussed and you were happy with.

Am I miss reading this?"

I think I am entitled to take this email as setting out the defendants' position as of 10 June 2010. A number of points emerge from the email:

• There is no mention of a 'white label' manual either by name or by implication. Instead there was according to Mrs Goldsworthy a 'working partnership' between MTL and Goldmark to produce a joint manual in order to obtain accreditation. (The email implies that this was a single joint manual, distinct from the ICM manual, to be used by both parties – see also below.)

• This partnership was apparently not under the auspices of the ICM (implied by Mrs Goldsworthy's stated inference that fall out from the ICM was to be limited).

• Goldmark carried out work to produce a specific manual to MTL's requirements, including 4 additional lesson plans.

• Goldmark intended to use its version of the manual created by the partnership to gain Edexcel approval and also to sell to other companies, branding the manual accordingly, with acknowledgment of MTL's input.

There was no written response from Mr McCormack. In his second witness statement Mr McCormack raises only one objection to the email, namely the suggestion (in the second paragraph) that the information obtained via the ICM was free for the use of its members. Mr McCormack maintained that ICM material could be used to create an ICM manual for purchase by its members, but was not otherwise available for use and this aspect of Mr McCormack's view was corroborated by the evidence of Stuart Hex of the ICM.

Mr McCormack stated that he responded to the email of 10 June 2010 by speaking to Mrs Goldsworthy and making it clear that the Lane Photographs and other material could not be used by anyone else.

Mrs Goldsworthy said that in this conversation, Mr McCormack's concern was that Goldmark should not sell MTL's 'bespoke' version of the manual to others. This is consistent with her email of 12 June 2010:

"Also just wanted to say thank you for explaining the PI manual issues; I now understand that we can still use our joint materials for other future projects, and that you were just protecting your bespoke manual from being re-sold to another company."

Mr McCormack said that his understanding of "joint materials" as used in the email of 12 June was that it meant nothing more than standardised documents. In his second witness statement he said (at paragraph 22):

"I did not regard the Claimant's photographs risk assessment handouts, the Claimant's sequence of technique which is unique to the Claimant, or the text that explained the Claimant's techniques as 'joint materials', I believed they belonged to the Claimant."

At best there was a clear misunderstanding between Mr McCormack and Mrs Goldsworthy.

On 13 August Mrs Goldsworthy suggested to Mr McCormack in an email that he become a listed trainer for Goldmark to deliver their level 3 course. In an email dated 15 August 2010 to Mrs Goldsworthy, Mr McCormack said that he had given some thought to the suggestion but rejected it. He went on to discuss the implications of Goldmark submitting a manual for accreditation:

"If you continue to submit your manual for accreditation to the BIIAB, I hope that you will honour our agreement that you do not use McCormack Training's manual as your manual. I should explain my position as far as the use of physical intervention techniques and McCormack Training materials. In my opinion the techniques themselves cannot be copyrighted by anyone. However, the photographs and the manuals belong to McCormack Training Ltd. Though we started from a position of presenting the ICM with a joint manual, we later found that this would not be possible, and I employed you to complete the arrangement of the McCormack Training's manuals for which you were paid as a consultant."

What Mr McCormack said there was consistent with what Mrs Goldsworthy had said in her email of 10 June 2010 in a number of significant respects:

• There was no reference to a 'white label' manual or to anything that might fit that description.

• To the extent that that there had been a manual in preparation (separate from the ICM manual) it was apparently originally intended to be a joint manual for use by both MTL and Goldmark.

• That joint project had fallen by the wayside and Mrs Goldsworthy was paid to finalise a manual solely for MTL's use.

• Goldmark intended to use its version of the former joint draft manual created by the partnership to gain accreditation.

By August 2010 the ICM had either been called upon or felt the need to give advice and in an email dated 20 August 2010 sent to various interested parties, including Mr Fox, Mrs Goldsworthy and Mr McCormack, asserted that companies should use their own photographs in their manuals since photographs were protected by copyright, though physical skills were not.

On the same day Mr Fox responded by saying that there was an open issue regarding ownership of copyright in ICM materials and suggesting that the board of the ICM should consider this as a matter of urgency. However Mr Fox also clearly stated that Goldmark was "very lucky" because it had its own photographs of all the techniques contained in the ICM manual. This seems to imply (a) that Goldmark was only going to use its own photographs for its manual and (b) Goldmark accepted that there was doubt regarding its right to use photographs or other materials made available through the ICM.

The next day, 21 August 2010, Mr McCormack sent an email solely to Mr Fox:

"With reference to the images used in the ICM manual these pictures have already been signed over for the use in the ICM manual. There is no need to change the photos.

The issue is because you and Ruth was going to use my pictures for your own gains of which certain individual who had there photo taken was not happy.

The publication of your manual should use your photos."

It seems to me that by 21 August 2010 at the latest, the defendants can have been in no doubt that they had no licence to use the Lane Photographs and that Mr McCormack reasonably understood that the defendants had no intention of doing so.

Mr Fox said that he and Mrs Goldsworthy interpreted Mr McCormack's email of 21 August 2010 to mean that while Mr McCormack objected to their use of the Lane Photographs, he had no objection to their use of techniques, a sequence of techniques or text originating from Mr McCormack. I do not think that this was a fair inference. It is not what Mr McCormack said and is not consistent with his email of 15 August 2010.

On 22 August 2010 Mr Fox sent an email to Phil Hardy (chairman of the ICM) among others, copied to Mr (Andy) McCormack and Mrs Goldsworthy:

"Hi all, it is perfectly correct Goldmark Training Services do intend to submit their own folder for approval, from which they do hope to benefit financially, predominantly through gaining recognition of their growing expertise, in the area of producing quality Training Manuals. However for Goldmark the issue was never about the photographs, as they already had their own, it was about the time it would take to replace some 750 images. Goldmark were at the time under the mistaken impression that the images in the manuals, they helped to prepare, were an open-resource, freely available to all the membership. Goldmark can positively assure both Phil, Andy, and the rest of the Board, that this exercise has been completed, and our their manual is ready for submission to the Awarding Body."

In cross-examination Mr Fox said that he used the word "mistaken" because he was being diplomatic and wished to avoid conflict. To the extent that Mr Fox sought to imply that he had been told that Goldmark was free to use photographs on the ICM register, I do not accept that. The evidence of Mr Hex of the ICM was both clear and consistent with what Mr McCormack had said: photographs held by the ICM were for use solely for the preparation of the ICM manual. I accept that evidence.

Between October and December 2010 Mrs Goldsworthy requested the return of Goldmark manuals which had been sent out, to be replaced by new versions which were thought to have none of Mr McCormack's photographs in them. It transpired by the time of the trial that four such photographs remained.

The witnesses

Mr McCormack was a garrulous witness who was often imprecise about dates and other details and was inclined to respond to questions by delivering argument rather than answering the question put to him. This did not inspire confidence that he was always giving honest and accurate answers. He was not a satisfactory witness.

Mr Fox and Mrs Goldsworthy were more self-controlled, but equally unsatisfactory as witnesses. In cross-examination they firmly maintained their account of a project undertaken by a committee of the ICM to create a white label manual, separate from the programme to create an ICM manual. For reasons I will explain, I do not accept that there ever was such a project. One consequence of this is that I am not able to assume that I can accept other aspects of the evidence given by Mr Fox and Mrs Goldsworthy, where uncorroborated.

The remaining witnesses gave their evidence clearly and, it seemed to me, reliably.

Findings of fact

Was there a 'white label' programme?

A key point of dispute in this case is whether there ever existed a separate ICM project to create a 'white label' manual. Both Mr Fox and Mrs Goldsworthy in their respective witness statements refer to the 'white label' programme and the progress of creating the 'white label' manual as if that term was used at the time. The contemporary documents indicate that it was not. I also think that if the project had existed then some sort of identifying name would have been given in those documents to the manual intended to bear whichever brand the purchaser chose (ICM member or otherwise). Yet none appears.

In my view, there was never a 'white label' project of the type described by Mr Fox and Mrs Goldsworthy and I so find. I have reached that conclusion for the following reasons.

First, the notion that there was such a project does not appear in the Defence, which has a statement of truth signed by Mrs Goldsworthy. It is said (at paragraph 14.10) that the project to create an ICM manual included the intention on the part of the ICM "that such training manual would go on to be used as a 'white label' product suitable for self-branding by individual ICM members." This was common ground. The main ICM project envisaged the creation of a manual for use by all and any ICM members, though not outsiders. It is not the white label project Mr Fox and Mrs Goldsworthy described in their evidence.

This left me with the impression that Mr Fox and Mrs Goldsworthy had persuaded themselves of a separate 'white label' project during the course of the preparation of their evidence. No application was made to amend the Defence.

Secondly, there was an inconsistency between the suggestion that the white label project had emerged by way of a working group within the ICM, parallel to the group responsible for the preparation of the ICM manual proper, and the suggestions that the project was (a) funded by Mr Fox's party M3T and (b) was later to be sold by Goldmark, which would recover the profits. No reason was given why the ICM should sanction such a project or why any party other than M3T and then Goldmark should contribute to it. It made no commercial sense.

Thirdly, in cross-examination Mr Fox was definite in his evidence that the ICM knew about both working parties – that is to say the one working on the ICM manual and the other on the white label manual. He had also said that the white label manual was based on skills taken from the ICM register of skills. Yet Mr Hex, director of the company which manages the ICM, was clear in his second witness statement that the ICM knew of no white label working group. In cross-examination he had no difficulty with the idea that any party could create its own manual, but he said that such a party, if not a member, would not be permitted to use the register of skills held by the ICM. I have no reason to doubt Mr Hex's evidence on this point; it is not consistent with that of Mr Fox and Mrs Goldsworthy.

Fourthly, the defendants pointed to no documentary evidence to support their account of a white label project of the type they rely on.

Was there a project to create a manual other than the ICM manual?

It seems to me to be clear on the evidence that the ICM manual was not the only manual in preparation in 2010. I have rejected the suggestion of a separate white label project, but Mr McCormack said that MTL decided to create its own manual and did so with the help of Mrs Goldsworthy, who used the Lane Photographs (which hereafter should be taken to mean, alternatively, some of them) and the McCormack Notes to draft the text boxes. In my view Mr McCormack's recollection of the facts in this regard is at best incomplete.

The emails I have referred to above strongly suggest that the breakaway project (i.e. to be pursued independently of the ICM project) started life as a joint enterprise between MTL and Goldmark (or M3T). At some point that idea fell apart and the parties were left to go their separate ways. It is also clear that the MTL Manual as then emerged was created in part through the efforts of Mrs Goldsworthy, paid for by MTL.

Goldmark also pursued the creation of its own manual, the one complained of. It is common ground that early version(s) of the Goldmark Manual used the Lane Photographs, but later versions used Goldmark's own, subject to four Lane Photographs remaining in error. This leads on to two further issues which I have to decide: (1) was the use of the Lane Photographs by Goldmark licensed by Mr McCormack and (2) who drafted the text boxes in the Goldmark Manual?

Did Mr McCormack grant Goldmark a licence to use the Lane Photographs?

The defendants contended that at the meeting of 14 February 2010 Mr McCormack said that the defendants could use the Lane Photographs in the white label manual and that he was fully aware that the white label manual would be offered for sale by Goldmark or its predecessor, M3T, to all comers. Those parties would brand it with their own respective liveries (and, incidentally, compete with MTL and any other ICM member). I have rejected that contention and therefore the defendants' case in support of a licence falls away.

It is common ground that by 21 August 2010 the defendants realised they had no licence to use the Lane Photographs. In my view there is no reason to believe that there was such a licence at any time.

Who created the text used in the Goldmark Manual?

Having rejected the defendants' submission that Mrs Goldsworthy created the text boxes for a white label manual, it is tempting to accept the only other account of the facts expressly on offer: Mr McCormack sent the McCormack Notes to Mrs Goldsworthy, who just typed them up. However, I have not fully accepted Mr McCormack's account of events either, so the matter needs to be considered a little further.

There are difficulties with the McCormack Notes. Mr McCormack more than once emphasised that he is dyslexic and therefore not able to set things down in writing. There is no trace of this in the McCormack Notes. Also Mr McCormack had either an inability or an unwillingness to be tied down either as to the precise date on which he supplied the McCormack Notes to Mrs Goldsworthy or, less understandably, the way in which that was done.

In relation to this part of the case I was most struck by the following aspects of the evidence. Mr McCormack said this in paragraph 39 of his second witness statement:

"That I had asked Mrs Goldsworthy personally to assist with the creation of the Claimant's Manual in early 2010, is shown by the fact that I asked her to work on the core skills manual, which would form a central part of the Claimant's Manual as this comprises the full sequence of techniques. It can be seen that Mrs Goldsworthy invoiced me for this work, on 17 February 2010." (My emphasis)

Thus a key part of Mr McCormack's case is that his core skills manual formed a central part of the MTL Manual since it comprised the full sequence of techniques required for that manual. I was shown the invoice of 17 February 2010 which states "Proof read/amend Core Skills manual" and records that Mrs Goldsworthy charged £200 including VAT. Mrs Goldsworthy also referred to this work in her first witness statement. She discussed the material she had received from Mr McCormack (she consistently denied receiving the McCormack Notes or having had any sight of them before this litigation), including the core skills manual. (In her witness statement she calls the material from Mr McCormack which she proof read the 'physical skills catalogue (version 3)'. It was common ground that this was the proof reading exercise identified in the invoice referred to above and that the 'core skills manual' and the 'physical skills catalogue (version 3)' were the same thing. I will use the term 'physical skills catalogue' to refer to this document.) In the relevant part of her witness statement Mrs Goldsworthy said:

"24. Following the meeting on 14 February 2010, Mr McCormack provided me with his high-resolution images for their inclusion within the white label manual. The images were provided in the form of a PowerPoint presentation file. Mr Fox asked me to integrate the images into the relevant draft lesson plans.

25. Separately, Mr McCormack asked me to proof read a copy of his 'Physical Skills Catalogue' (version 3) as a quick review had highlighted errors. I completed this review, returned all of the electronic files to Mr McCormack and the Claimant was invoiced accordingly. A copy of the Physical Skills Catalogue I proof read is in the schedule [to the witness statement]."

It is not obvious why Mr McCormack should send Mrs Goldsworthy the McCormack Notes as well as the physical skills catalogue since they both set out the full sequence of techniques to be used in the MTL Manual. In cross-examination Mr McCormack said that the physical skills catalogue did not reflect what he wanted. But this is not consistent with his witness statement in which he described the physical skills catalogue as forming a central part of the MTL Manual – precisely because it comprised the full sequence of techniques. If he merely wanted to amend the wording of part of the physical skills catalogue one would expect a reference to the catalogue in the McCormack Notes. Besides, Mr McCormack on his own account was not the man to improve wording. He relied on others such as Mrs Goldsworthy to do that.

As was pointed out on behalf of the defendants in a table handed up at trial, the physical skills catalogue and the McCormack Notes cover similar ground – they both describe the sequence of techniques to be presented in a manual – but the wording used to describe each technique is for the most part different.

To recap: there are striking similarities between the text boxes in the MTL Manual and the equivalents in the Goldmark Manual. It was common ground that (a) this could not be explained by coincidence and (b) those similarities are shared with the McCormack Notes. Just after the meeting of 14 February 2010 Mr McCormack sent to Mrs Goldsworthy the physical skills catalogue which contains the full sequence of techniques and the wording necessary to make the text boxes for a manual.

I think this gives rise to three possibilities:

(1) Mrs Goldsworthy was supplied with the McCormack Notes around 14 February 2010. She typed them up to create text boxes which she used in the creation of the MTL Manual and also the rival Goldmark Manual.

(2) Mrs Goldsworthy was not supplied with the McCormack Notes. She had earlier created notes based on Mr Foster's demonstrations of techniques with trainers in about September 2009 and used these for the text boxes in both the MTL Manual and the Goldmark Manual. The similarities between these text boxes and the McCormack Notes must be attributed to Mr McCormack having created the McCormack Notes from those text boxes for the purpose of this litigation.

(3) Mrs Goldsworthy did not merely proof read the physical skills catalogue and return it. She used it to create text boxes but amended the wording, either relying on earlier notes she had prepared herself or for reasons of better expression, giving rise to the text boxes that were then used in the MTL and Goldmark Manuals. The similarities between these text boxes and the McCormack Notes are explained for the reason given in (2).