Authored By : Eve Richardson
Royal Holloway University of London
Case name and citation:
Meridian International Services Ltd v Richardson and others [2008] EWCA Civ 6091
Judgement delivered:
4 June 2008
Judges:
The Chancellor of the High Court Sir Andrew Morrit, Rix LJ, and Rimer LJ
Court:
Court of Appeal (Civil Division) on appeal from the High Court, Chancery Division.
Key parties involved:
Meridian Internation Services Ltd (MIL):
The appellant company and successor to Meridian Associated Ltd (MAL).
Meridian Associated Ltd (MAL):
MIL’s predecessor company, founded by Mr John Bobeckyj.
Initiated the relationship with GSK Consumer Healthcare UK (CHUK).
Mr Bobeckyj:
Founder of both MAL and later MIL.
Recruited Mr Richardson and Mr Aldersley.
Mr Richardson:
Originally a regional manager for GSK before becoming a director at MAL. Resigned from MAL in 2004 due to concerns about management practices. Mr Aldersley:
IT manager recruited from New Zealand to work for MAL.
Joined Mr Richardson in forming IP Enterprises Ltd.
IP Enterprises Ltd:
The company established by Richardson and Aldersley after withdrawing from MIL. GlaxoSmithKline Consumer Healthcare UK (CHUK):
The commercial client for whom the software was being produced.
Material Facts:
Meridian International Services Ltd (MIL) was the successor to Meridian Associates Ltd (MAL), who had gone into creditors’ voluntary liquidation (where directors and shareholders decide to close down rather than waiting for the court to enforce liquidation) due to serious financial difficulties as of August 2005. Prior to this, MAL had developed a business relationship with GlaxoSmithKline (GSK), Consumer Healthcare UK (CHUK), for the implementation of an integrated financial forecasting system called Project Vista which later gave rise to a software labelled StratX.
A meeting that took place on 9th January 2006, marked the central moment where Mr. Richardson and IP Enterprises Ltd agreed to continue their work on Project Vista and StratX after MAL’s insolvency. This was agreed to orally, while MIL hoped to acquire copyright ownership of the software as part of the agreement which then led to their future claim, that this agreement implied the transfer of copyright in StratX to them.
Despite continual assurances, payments to Richardson and Aldersley by MAL (and later MIL) were often delayed or not made entirely. This included payments due on the 20th of October through December of 2005. This ultimately resulted in both Richardson and Aldersley withdrawing from working for MIL. Instead, they proposed alternative arrangements, including the creation of a new company (IP Enterprises Ltd) to continue any software developments, with certain payments owed by MIL.
Issue:
At its core, the issue revolves around the question of the ownership and control of intellectual property and whether the January agreement between MIL and IP Enterprises included an implied term which then subsequently created two significant obligations. The first being that, the source code and associated materials (such as any documentation) would be provided to MIL and secondly, that the copyright in StratX would ultimately belong to MIL meaning they would be the owner of all intellectual property rights associated with the software. If this was the case, MIL would have had the automatic right to use, sell, or license StratX without further consent from IP Enterprises. The second issue is that of whether it was necessary that the term would be considered implied, for the reasoning of business efficacy to make the contract work or alternatively, it is so obvious that it goes without saying that the terms should be implied. Finally, the question of whether the judge below said court erred in rejecting MIL’s claim for as implication of such terms.
Holding:
The Court of Appeal dismissed the appeal and the judges upheld the High Court’s decision. They concluded that MIL had failed to establish that the terms they were competing for were necessary for business efficacy or that it was so obvious that it goes without saying. The appeal was dismissed unanimously by Rix LJ, Rimer LJ, the Chancellor.
Ratio Decidendi:
The court reaffirmed that a term can only be implied into a contract where it is strictly necessary in order to give effect to the parties’ agreements. The court directed themselves by reference of the judgement of Robin Ray v Classic FM2, and summarised the principle to be that “an implication may only be made if it is necessary, and then only of what is necessary and no more. The test is, as has been said elsewhere, one of strict necessity”3. Ultimately, commercial convenience, unilateral objectives, or the mere desire to achieve one party’s interests are therefore insufficient to justify implying said term.
The objective implication test means the court must consider the contract as a whole including the relevant factual and commercial background known to the parties at the time of the creation of the contract. It is directed that the subjective intentions of a single party, or subsequent discussions or conduct, cannot justify implying a term retrospectively4.
For multi-party agreements, a term may only be implied if it meets the threshold that it is so obvious to all parties that it goes without saying it should be included. Additionally, the judge goes on to outline that a term which benefits or is apparent only from the perspective of one party5cannot be implied to ensure fairness and avoids inserting obligations which were not collectively intended.
The court also went on to say that the evidence from draft contracts or prior unproduced documents is not sufficient to establish an implied term where the terms were still under negotiation6and that the only terms consistent with the contract as executed and which are strictly necessary for its operation, can be implied.
Applying the above principles, the court’s reasoning involved the analysis of several points advanced by MIL in favour of their claim for the implied terms. Firstly, the court considered the Project Vista contract terms, and maintained that as the contract was still subject to negotiation, it could not provide a sufficient
foundation to imply a copyright transfer7. The court also went on to reject MIL’s argument that an implied term was necessary to prevent GDK from using StratX outside of the SHUK framework. The reasoning being that any concern regarding potential misuse of StratX by third parties could have been expressed explicitly within the formal agreements once the contract was executed.
The court found MIL’s third claim in that the term was needed to support a strategy to sell the software, was rejected. The claim was found to be unsubstantiated in that bespoke software could not realistically be resold and that under this umbrella, the business efficacy argument failed8.
Once these principles were extensively discussed and applied, the court concluded that the alleged implied terms which would constitute in the transfer of the StratX source code and any associated copyright to MIL, were neither strictly necessary for performance nor were they obvious to all parties involved. Consequently, the judge rejected MIL’s claim for the implication of said terms.
Obiter Dicta:
In addition to the ratio decidendi, the court made several obiter observations providing guidance on the law of implied terms in commercial contracts. Firstly, the court emphasised that commercial strategy will not and cannot justify the implication of a term. The court went on to note that MIL’s argument framed the matter exclusively from its own perspective, without taking into account any interest or intention from the other parties involved9. It reinforced the idea that implied terms must meet an objective standard rather than being imposed to simply further the business interests of one contracting party. The court also clarified that the use of confidential information in the development of software does not automatically give rise to an implied transfer of copyright. So, while MIL argued that their involvement created an entitlement to the ownership of StratX, the court dismissed this noting that issues of confidentiality must be kept separate from issues of copyright transfer10 and that any intellectual property rights must be explicitly agreed or shown to be strictly necessary for the contract to function.
Dissenting Opinions and judgement: In this case, there were no dissenting opinions. The decision was unanimous in the Court of Appeal.
The court dismissed MIL’s claim for the implication of terms into the January Agreement and held that the any alleged terms were neither strictly necessary for the performance of the contract, nor were they so obvious as to go without saying. The appeal was dismissed in full with no modification to the original contract and no additional orders or directions given.
Significance:
Courts are highly cautious when implying terms, and this case is nothing if not an example of this. Particularly in multi-party agreements. The decision highlights that, in the context of such collaborative commercial projects, the ownership of intellectual property must be expressly documented, especially where prior entities have become insolvent or where projects have simply transferred between companies. The decision reinforces a clear framework for contracting parties to ensure the reduction of risks of disputed when projects involve multiple stakeholders.
From a doctrinal perspective, the judgement demonstrates that necessity and mutual agreement remain the strict tests for implying contractual terms rather than convenience. Even in situations where one party faces financial uncertainty or commercial pressures, the court will not infer terms to achieve that party’s objectives if they are not imperative to make the contract workable. The court’s decision reinforces predictability and fairness in contractual interpretation, ensuring that implied terms remain aligned with objective necessity. Overall, the judgement provides both a doctrinal and practical guide for managing multi-party commercial arrangements while “illustrating the value of determining the ownership of IP rights in software at the outset of a commercial relationship”11.
Conclusion:
Meridian International Ltd v Richardson serves as a definitive example of the careful scrutiny the courts must involve when considering implied terms in any commercial contracts. The decision reinforces that implied terms will not be recognised to further one party while highlighting the importance of establishing and documenting intellectual property rights, responsibilities and contractual obligations at the outset of any collaborative projects. The judgement promotes clarity and predictability in multi-party arrangements, providing a practical guide for ensuring that agreements are comprehensive, enforceable and most importantly, capable of functioning without reliance of unilateral interpretations. In delivering this judgement, the court reinforces that the legal framework must continue to be governed by necessity, mutual agreement, and objective reasoning.
Bibliography:
Table of Cases:
Robin Ray v Classic FM [1998] EWHC Patents 333
Meridian International Services Ltd v Richardson and others [2008] EWCA Civ 609 Articles:
‘Software development – never assume that you own the copyright’ (CMS LawNow, [published June 17, 2008]) cms-lawnow.com/en/ealerts/2008/06/software-development-never-assume-that-you-own-the copyright?format=pdf&v=8 ,accessed November 29, 2025
1 Meridian International Services Ltd v Richardson and others [2008] EWCA Civ 609
2 Robin Ray v Classic FM [1998] EWHC Patents 333, [45]
3 Meridian International Services Ltd v Richardson and others [2008] EWCA Civ 609, [60]
4Ibid, [62]
5Ibid [68]
6Ibid [63,64]
7Ibid, [64]
8Ibid, [67]
9Ibid, [68]
10 Ibid, [33]
11 ‘Software development – never assume that you own the copyright’ (CMS LawNow [June 17, 2008]) https://cms lawnow.com/en/ealerts/2008/06/software-development-never-assume-that-you-own-the-copyright?format=pdf&v=8 , [accessed November 29, 2025]
