Ownerless Emails - Still No Takers

Scotland
Fairstar Heavy Transport N.V. v Philip Jeffrey Adkins Claranet Limited [2012] EWHC 2952

The High Court of Justice has recently made an interesting decision regarding the ability to own an e-mail, or rather, the lack thereof!

The facts

The facts in Fairstar concerned the ownership of Fairstar's business e-mails that were sent to and from the personal e-mail account of the Chief Executive Officer, Mr Adkins.

Fairstar is a Dutch company specialising in the transport of heavy cargo. Fairstar had instructed a Chinese shipyard to build several vessels. Finding itself in financial difficulty, Fairstar defaulted on payment. Consequently, the shipyard claimed that Fairstar was liable to pay a cancellation charge of US$ 37 million. Mr Adkins disputed that claim based on the terms of a collateral contract, presumably negotiated over e-mail. Shortly after, Fairstar was subject to a hostile takeover by the owners of a competitor, which terminated Mr Adkins' role as CEO.

In this case, Fairstar's new owners sought recovery of incoming e-mails that were automatically forwarded to Mr Adkins' private account (and deleted from Fairstar's server) and Mr Adkins' replies. Fairstar claimed a proprietary right in the e-mails' content. Fairstar stated that without access to these e-mails, it did not know what was agreed between Mr Adkins, on behalf of Fairstar, and the Chinese shipyard.

The e-mail ownership issue

The particular circumstances raised the legal question of whether the content of an e-mail can actually be owned. In their respective submissions the parties relied on various different authorities in their attempt to prove that an e-mail could/could not be owned. Mr Adkins' proposition was simple; information can not be owned as it is not a type of property. There are many cases that support the proposition that information is not property, including a 2012 decision from the High Court. The judge, in Fairstar, fell on this side of the fence, although he stated "I would not go so far as to say that this is now settled law".

Taking a different angle, Fairstar's solicitor put forward several cases which highlighted that various types of material used by an employee in the course of his employment are the property of the employer. Fairstar's most supportive case was one which held that information copied from a work Microsoft Outlook account into an Excel spreadsheet belonged to the employer, and even where the Outlook was accessed remotely it is still the property of the employer. However, it appears that this case may have jumped the gun in that the question being answered was "who owns it?" rather than "is it capable of being owned?". It was the latter question that the judge in the present case was seeking to answer and his decision was based very much on practicalities rather than case law.

The judge submitted that if e-mail content was capable of being owned at all there were five options. These options were as follows:  
   Square title to the content remains throughout with the sender (or his principal);
   Square when an e-mail is sent, title to the content passes to the recipient (or his principal);
   Square title remains with the creator, but the recipient has a licence to use the content for any legitimate purpose consistent with the circumstances in which it was sent;
   Square title passes to the recipient but the sender of the e-mail has a licence to hold onto the content and use it for a legitimate purpose; or
   Square the email is jointly owned between the sender and the recipient.
The judge then explained that the various practical problems underlying these situations meant that none of these could possibly be the case in law. Taking option 1, if the creator owns an e-mail he could require any recipient to delete it at any point down the line. The judge noted that if the creator did not have the right to do this then there would be no point in his proprietary right. Similarly, if the recipient held title to the e-mail and the creator had no rights once it was sent (option 2), then the recipient could legitimately ask the creator to delete the e-mail. The judge considered that although options 3 and 4 may seem workable in theory, in practice they would deprive the proprietary right of any value. Finally, the e-mail being jointly owned between the sender and the recipient was regarded by the judge as unrealistic, particularly when emails are forwarded numerous times.

In conclusion, the judge held that an e-mail cannot be owned.

Comment

This decision highlights three things. Firstly, it is unclear whether ownership can be asserted over confidential information that is disclosed in an e-mail. Secondly, the case raises the question of whether confidential information can actually be owned at all. This is worrying given that ownership terminology in relation to confidential information is used in many contracts. Some small comfort can be gained from the judge's reassurance that a breach of confidence action can still be taken in the event of misuse of confidential information. Thirdly, this situation clearly shows that the law can struggle to keep up with changing times. It surely won't be long until the ownership question is raised again.