European Gaming Lawyer magazine Spring 2016 | Page 8

UK: Software licensing in 2016 –
the virtual minefield
by Gemma Boore

A

licence is often defined as
“a permission to do
something that otherwise
would be unlawful” but is
this really the case? In this
article, Gemma Boore of Bates Wells &
Braithwaite London LLP outlines five
important legal developments in the United
Kingdom that have the ultimate result of
conveying either more or less upon the
subjects of a licence than the parties
expressly intended and will likely influence
the advice that UK software licensing
practitioners convey to their clients.
Case law update
1. AFD Software v ZIP Address
AFD Software Limited v ZIP Address Ltd
[2015] EWHC 453 (Ch) is a cautionary
tale in which a Chancery Division judge’s
assessment of what was said during a
sales call left a claimant software supplier
with £12million less than it sought to
recover and will ultimately cast doubt on
the effectiveness of express contractual
agreements in general.
AFD supplied postcode lookup software
to the defendant, DCML, under a licence
which permitted use of the software on
public internet websites. In breach of
licence, DCML used the software on a
website for its business with car dealerships,
which could only be accessed via a log in
page and password (ie, it was not available
to the wider public). After some years, AFD
recalculated its fees and demanded a much
higher sum (£12million: more than 1,000
times the annual cost of the software) from
DCML and brought proceedings, seeking
to recover such sum. DCML defended the
claim and sought to establish that AFD

8 | European Gaming Lawyer | Spring Issue | 2016

was estopped from contending that DCML
was not properly licensed to do what it did
because its sales representative, Mr Johnson,
was made aware of the use DCML intended
for the software before the licence was
entered into by the parties. The judge agreed
that DCML had established its estoppel
defence and the claim was dismissed.
Although this case is unusual and very
much turns on its facts, the ultimate result
creates ambiguity and, when interpreted
literally, an argument that pre-contractual
discussions will trump click through
contract terms in court. In reality, licensors
would be ill-advised to rely on such an
argument. However, the case may prove
useful for licensees negotiating settlement of
software licensing disputes and, even though
It may well have assisted AFD if their
licence expressly said that the terms would
supersede any