Animatrix Limited & Dr Snuggles Animatrix Partnership LLP v Jeffrey O'Kelly [2008] EWHC 438 (Ch) [2008] EWCA Civ 1415
Intellectual Property - Compromise Agreement - Declaratory and Injunctive Relief
Alan Gourgey QC and Tim Penny acted for the Claimant / Respondents to this appeal brought by the Defendant / Appellant against the Order of Philip Sales QC, who had given Judgment in their Client's favour in granting declaratory and injunctive relief pursuant to a compromise agreement between the Parties relating to the ownership and vesting of certain intellectual property rights in and to a cartoon character called Doctor Snuggles. The Appellant's appeal contended that the Judge's decision was wrong in particular on issues of estoppel by convention and further on his decision to grant summary declaratory relief as well as summary injunctive relief without the full determination by the Court after a trial of the rights of the respective parties. The Appellant contended that on a true construction of the compromise agreement, the Claimants were not entitled to the relief claimed, but that even if they failed on that ground, the Court should not have made an exception to the general rule that declaratory relief will not be granted without an investigation of the merits at trial, and the Defendant relied upon Wallersteiner v Moir [1974] 1 WLR 991 (CA) in this regard.
The Claimants / Appellants were successful in resisting the appeal in its entirety. The most interesting aspect of the Judgment of the Court of Appeal is paragraphs 50-57 of the Judgment of Arden LJ, in which the Court considered whether this was indeed an appropriate case for an exception to be made to the general rule that declarations are not made by consent. The Court affirmed that the rule that declarations should not be made by consent is one of practice and not an immutable rule and that such declarations may be made where that is necessary to do justice in a particular case. In this case, the parties had entered into a commercial bargain, and it was no longer open to the Appellant to raise defences to the Respondents' claims. The position was the same as if the Appellants had agreed to transfer his rights, and the Appellant's position that the Respondent still had to establish that it was the rightful owner of the rights was inconsistent with the agreement. The Judge was correct to conclude that this was one of those rare cases in which it was necessary to grant the declarations to do justice between the parties.