Cyprotex Discovery Ltd v University of Sheffield
Reference:  EWCA Civ 380
Court: Court of Appeal
Judge: Ward, Potter & Clarke LJJ
Date of judgment: 1 Apr 2004
Summary: Intellectual Property- Copyright - Computer Programs - Construction of Contractual Terms
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Instructing Solicitors: Addleshaw Goddard for the Claimant; Keeble Hawson for the Defendant
Cyprotex, a computer program development company, appealed against a decision that copyright in a set of computer programs arising out of research at the University of Sheffield (and subsequently developed into a commercially exploitable form by Cyprotex) belonged to the University. The Simcyp Project at the University was pioneering a computer-based aid to assist research and development in the pharmaceutical industry by seeking to predict how a potential new drug would be absorbed across the gut wall and other body barriers. Following creation by the Sheffield team of equations, databases and algorithms, an arrangement was entered into with Cyprotex. Cyprotex were to provide the necessary programming expertise to develop the reaserach into a user friendly computer program and were one of the sponsors of the development. The programmer who undertook the work was provided by Cyprotex. A retrospective research agreement provided that the University would own the copyright.
On a proper construction of the contract, whether copyright in the code belonged to Cyprotex or to the University.
The court should interpret the wording of the contract in a manner which reflects not only the structure and apparent intention of a multipartite contract but the basis upon which the parties in fact proceeded. The Agreement contemplated and required that the University should recruit a programmer to produce the software. Whether that work was carried out by an programmer employed by the University or a sub-contracted programmer, the intention of the parties must have been that ownership would pass to the University.
The judge at first instance observed that the agreement was ‘not happily drafted in several respects.’ This case is a salutory lesson in the importance of ensuring that in any development contracts the ownership of copyright material created during the course of development is properly addressed.