A High Court wrangle over parking software contains so many redlines that the key areas affecting IT contractors are somehow in the double figures.
A “messy” case of a dad and son at war over parking software drives home the value in clear terms when doing business with family.
Law firm Egos Ltd issued this verdict yesterday to ITContracting.com, about the case — ES Parking Enforcement Ltd v McCartney & others.
‘Clarity of documentation’
But it’s not just “clarity of documentation” concerning “business with family” that are the takeaways, as the law firm’s Roger Sinclair put it.
Those probably are the top two takeaways however, legal company Dentons signalled in a supporting analysis, exclusively for ITContracting.com.
The High Court battle raises copyright ownership, contractor versus employee status, and use of developed software as well, says Lawdit.
‘ES Parking Enforcement Ltd (ESPEL)’
Lawdit’s Michael Coyle hinted to ITContracting.com that the starting point is probably 2014, when Ken Marland set up ES Parking Enforcement Ltd (ESPEL).
The ‘dad’ in the case, Marland formed ESPEL in December of that year, to help landowners exploit their land by using parking spaces.
But Marland’s son, Jack McCartney, told the court that he wrote software for his dad’s project in 2020, the ‘KnightPark Software’ (KPS).
‘Expended significant skill’
McCartney claims he wrote KPS, complete with parking warden apps, vehicle registration tech and debt widgets, under a development agreement with ESPEL.
The 26-year-old reportedly “expended significant skill, labour and intellectual creation” on the ‘understanding’ that he would retain the copyright.
However, Marland claims that KPS was actually created by an employee of ESPEL, an engineer, in 2019.
Also disputed is that despite McCartney being appointed a director in 2019 (Companies House shows), he denies ever being an employee.
‘Source of cheap labour’
Instead, he is said to have insisted to the High Court that he was only ever taken on by ESPEL as a self-employed contractor.
To his 68-year-old dad, he was used as “a source of cheap labour,” McCartney reportedly added.
This part of the wrangle is significant, as “an employer will generally own copyright in materials created by its employees in the course of their work,” Egos observes.
‘Main point of contention’
Indeed, Lawdit says the “main point of contention” in ESPEL v Jack McCartney & Others is “who is the rightful owner” of KPS’s copyright.
“While McCartney argues that he maintains ownership, in that he built the program independently under a contract that acknowledged his copyright ownership, [Marland disagrees],” Coyle says.
“The [dad’s] company, ESPEL, maintains that it is the rightful owner of the copyright, because the software was purportedly developed by an employee and is therefore the first owner of the work.”
‘Trading name’
But the legal wrangle has even another dimension.
In court, ESPEL reportedly accused McCartney of taking a CD containing an early version of KPS and set up two firms to exploit it.
One firm was established to house the software — KnightPark Ltd, and with that firm’s help, the second firm, ANPR 365 Ltd, was formed.
While McCartney denied taking a CD, he alleged that ESPEL attacked KnightPark’s website and defaced it, with words informing visitors that KnightPark was a “trading name” of ESPEL.
The case therefore has an additional two areas IT contractors often come up against – ‘alleged infringement’ and ‘passing off.’
‘ESPEL violated his copyright and committed passing off’
Lawdit’s advocate solicitor Mr Coyle explained his assessment last night:
“Jack McCartney alleges that by passing off the program as their own, ESPEL violated his copyright and committed ‘passing off.’
“If McCartney can demonstrate ownership, passing off here would suggest that ESPEL misrepresented the program to clients as their original work.”
‘Brand identity, fair representation and control over IP assets’
Coyle further advised that based on court reports, McCartney is accusing ESPEL of removing his access to its server.
In addition, to carry out the alleged hijacking of KnightPark’s website, Coyle suggests McCartney may argue that his ‘trading name’ claim gives rise to possible legal concerns over “brand identity, fair representation, as well as control over intellectual property assets.”
The areas relevant to IT contractors that ESPEL v Jack McCartney & Others touches on, are therefore in double figures.
The 10 areas are:
- clear terms and documentation;
- doing business with family;
- copyright ownership;
- contractor versus employee status;
- use of developed software;
- alleged infringement;
- passing off;
- brand identity;
- fair representation, and;
- control over IP.
Egos’s Mr Sinclair says as many as eight of the areas could have been avoided, if ‘Ken’ and ‘Jack’ had just been diligent on the first two.
‘Messy’
“This is a messy case,” he started.
“But one might imagine that there would be documentation making clear — first; that Jack retained the rights to anything he might have created — and second; Jack’s employment status in relation to Ken’s, his Dad’s, company.
“But I suspect that if it were as simple as that, it is unlikely that this case would have made it to where it is now.
“Nonetheless, disputes like this can be an enormous drain, not only of money, but also of time and energy, and are always best avoided.
“And the first step to take in avoiding the risks of disputes arising is to ensure that any business arrangement — especially one between family members — is clearly documented. And it needs to be documented in a way that covers all relevant bases, and at a time when there is a shared joint vision of the arrangement.”
‘The need for businesses to have clear provisions’
In short, continued former solicitor Mr Sinclair, “given clearer documentation, the parties might not be where they are today.”
Pauline Hughes, employment law associate at Dentons echoed yesterday to ITContracting.com:
“While the focus in [ESPEL v McCartney & Others] is on issues related to IP, it also highlights the need for businesses to have clear provisions on who will be the owner of any IP created during someone’s employment or engagement.
“Regardless of an individual’s employment status, the dispute in this case might have been avoided if the parties had agreed ‘who owns what’ at the outset of the relationship and recorded that within an appropriate document”.
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