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Mr Viney and Mr Barham then had three telephone calls. In those calls it became clear to Mr Barham that although Mr Viney talked about “settlement” of the litigation, the only option that he wanted to consider was a corporate acquisition. At around this time, PCI Pal sought a second opinion from leading counsel on prospects of success.
PCI Pal received a formal offer on 1 March 2023, which was rejected. On 7 March 2023, PCI Pal received an updated offer, raising the offer price to 90p per share. This offer was rejected on 8 March 2023.
After various communications Mr Barham met with Mr Viney and Mr Simon Hollingsworth (a NED at Sycurio) on 17 April 2023 after which the previous offer was reiterated and then again rejected.
On or about 3 May 2023, Sycurio’s M&A advisors, contacted the First Defendant’s two largest institutional shareholders, Canaccord and Gresham House, directly. On 19 May 2023, the offer from Sycurio was formally withdrawn.
On 26 May 2023, PCI Pal sent a settlement offer, covering both the US and UK litigation, to Mr Viney of Sycurio which was rejected. In that offer there was an offer by PCI Pal to take a licence on a worldwide basis.
It was the view of PCI Pal’s Board following these events that Sycurio were not interested in licensing PCI Pal, and that Sycurio were continuing to press the actions (in the UK and the US) with a view to continued disruption of PCI Pal’s business and ‘softening up’ PCI Pal for further acquisition attempts.”
Wow! Devious, or what!? That explains an awful lot about Sycurio/Livingbridge’s actions for those who have followed this case closely.
What price Sycurio offered in the initial approach is a matter for speculation, but my guess would be in the 75-80p range. The final offer of 90p would have been relatively easy to reject. PCIP’s brokers, FinnCap (now Cavendish) issued a price target of 125p at the time of the equity raise in May 2021, which has remained unchanged ever since. This target price, presumably, at least informed the PCIP’s Board’s thinking about the value it places on the business, and hence its decision to reject the offer.
Let’s hope that PCIP’s large institutional and private shareholders will resoundingly back the board of PCIP if Sycurio makes another approach, as foreseen in the witness statement, with a blunt: “vai a fanculo”. (continued in part 4)
First, at the beginning of September 2020, around the time Sycurio put itself on the market (my surmise; it is not stated in the witness statement), PCIP’s lawyers received a letter from Michelmores threatening PCIP with legal proceedings for patent infringement. Nothing further was heard from Michelmores, despite PCIP replying to refute patent infringement and dispute certain claims in Sycurio’s UK patent, until nearly a year later, after Livingbridge had taken over Sycurio. So: was patent litigation contemplated from the beginning of talks with potential purchasers?
Second, on September 15th 2021, the day Sycurio issued a press release saying it was suing PCOP for patent infringement in the UK and the US, Michelmores served its client’s Particulars of Claim, thereby, in effect, answering PCIP’s lawyers’ letter of a year earlier. Letters between the respective lawyers followed. Two of four options put forward by PCIP’s lawyers for resolving the dispute—a licence or “any other creative solution”—were apparently endorsed by Michelmores in a letter of 9th December 2021, which stated that: “Our clients agree that a licence is not the only option for resolution of the dispute, and indeed it is not our client’s preferred option”. The witness statement goes on to say: “…..Sycurio has consistently refused to discuss a possible licence, despite what was said in Michelmores’ letter of 9 December 2021.” Mediation, details of which both parties agreed to keep confidential, followed in January 2022. This failed.
Third, and this is the really big thing, it soon become very apparent what Sycurio’s “preferred option” really was. For fear of being accused of making up what follows, I quote nearly verbatim from the witness statement, edited only in a one place for brevity and to remove references to exhibits.
“After the mediation, there was a ‘Chairman to Chairman’ call in March 2022 at Sycurio’s suggestion. I was told that no price was mentioned at the time, but what was suggested was an acquisition by Sycurio of PCI Pal. This was the start of Sycurio’s attempts to purchase PCI Pal while the litigation was ongoing………The offer was rejected.
Sycurio hired a new CEO in the summer of 2022, Nick Viney. Mr Viney contacted James Barham, CEO of the First Defendant, via LinkedIn in November 2022 suggesting they connect as “it's always good to connect with other like-minded leaders” I recall this being seen as a somewhat odd approach as the two parties were involved in high stakes, and high cost, litigation. However, it was seen by PCI Pal as an opportunity to open a line of communication with a view to potentially resolving the dispute.
(continued in part 3)
At the forthcoming Form of Order hearing in the patent case, the presiding judge, Mrs Justice Bacon, will decide whether to give Sycurio leave to appeal and on the size and timing of the cost award to PCIP, including whether costs should be awarded on an indemnity basis (ie, a higher award than otherwise would be the case). An award on an indemnity basis is a punishment for a losing litigant for engaging in poor litigation conduct.
With regard to litigation conduct, bear in mind that Sycurio/Livingbridge could not have taken its patent infringement case to trial without the “technical expertise” of an “expert” witness, a 70-year dyslexic widow in ill health, called Mrs Penn, whose “expert” report Michelmores, Sycurio/Livingbridge’s law firm for the case, put together. Under cross-examination Mrs Penn, in a cloud of “brain frog”, turned out to be a non-expert expert, not qualified at all to give evidence on technical matters. This did not impress Mrs Justic Bacon, who disregarded all Mrs Penn’s evidence on technical matters. And, reading between the lines, Michelmores were severely wrapped on the knuckles: “It is [the instructing solicitors’] duty to ensure the expert has the necessary expertise and is aware of the duties imposed on an expert witness”, wrote Mrs Justice Bacon.
In anticipation of the hearing, I wrote to PCIP asking if it had made any court filings for the hearing that could be shared with a shareholder, which I am. I was sent a meticulously prepared, highly forensic, marginally redacted 31-page witness statement, written by PCIP’s lead solicitor from Shepherd & Wedderburn on the patent case. It is a dense document. But three new things emerge from the statement, one really big, which cast new light on Sycurio/Livingbridge’s actions and raise fresh and troubling questions.
(continued in part 2)
Good point leycrjb - could be the reason this client is coming back!
Cavendish 9th November - page six:
We note the group has only lost 2 mid-sized customers (with less than £100k of ACV) since 2018, with one implementing their own solution and now being in talks to re-implement PCI Pal, and NHS Test & Trace when the service closed in 2023.
Interesting point in Eckoh's results. Wonder if we'll see it drive out more of the in-house solutions that some merchants use.
"New updated PCI DSS v4.0 standard effective from April 2024 will increase complexity and cost of compliance for merchants, which is likely to drive higher levels of sales engagement for Eckoh's solutions"
Zoom lifts annual results forecast as AI features boost demand
By Samrhith
November 20, 2023
"The Phone segment grew to roughly 7 million paid seats while Contact Center reached about 700 customers as of quarter-end"
"Zoom's AI Companion, introduced during the third quarter, allows paid users to access features including meeting summaries and catch-ups, as well as email and chat composed prompts. More than 220,000 accounts had enabled it as of Monday"
More here
https://www.reuters.com/technology/zoom-raises-full-year-revenue-forecast-2023-11-20/
==================================================
From the RNS Reach 13 November 2023
New strategic reseller partnership with Zoom
"The new partnership, which follows an extensive evaluation process, will see PCI Pal's award winning secure payment solutions become available in H2 across Zoom's unified communications (Zoom Phone) and contact centre (Zoom Contact Centre) portfolio. The partnership will not only provide a light-touch pathway for Zoom customers to achieve PCI compliance but also empowers seamless payment experiences across Zoom's communications platforms"
"At PCI Pal we have built our business on the ability to attract, integrate to, and be successful with partners. It is hugely exciting to make our entire Agent Assist, both speech and keypad tone, and Digital, across chat, social, email, and video, product-sets available to Zoom customers globally"
https://www.lse.co.uk/rns/PCIP/new-strategic-reseller-partnership-with-zoom-u5hwqjwdcoyf6pl.html
Thanks for that Victor.
What are the ethical considerations of leaving Hogarth (PCIP) to join 11 South Sq (Sycurio) when the court case is still ongoing.
Edward Cronan joins 11 South Square
We are pleased to announce the arrival of a new member of chambers, Edward Cronan. Edward first came on to our radar at 11 South Square when he was a solicitor, and we watched his move to the bar in 2018 with interest. Since then he has developed an excellent reputation in IP litigation, particularly patents. Edward is already well accustomed to working alongside the members of chambers, having been led by members of 11 South Square in cases such as Phillip Morris v RAI, Commscope v SoliD, Carku v NOCO, and AIM Sport v Supponor. Edward’s profile
-------------------------------------------------------------
Edward Cronan
Recent & Notable Cases
Sycurio v PCI-Pal [2023] EWHC 2361 (Pat)
This was the trial of a claim for infringement of a patent relating to the secure processing of payments by telephone calls to a call centre. The patent was addressed to a method for reducing fraud by blocking data signals relating to the payment whilst maintaining voice communication between the user and the call centre agent. The Defendants’ card payment system was alleged to infringe either on purposive construction or under the doctrine of equivalents.
The Defendants denied infringement and raised a Gillette/Formstein defence. They counterclaimed for invalidity on the basis that the Patent was obvious over three additional prior art citations (two patents and one press release).
The judgment discusses the composition of the Skilled Team and claim construction. The court held the patent obvious over the prior art patents and not infringed. The claimants propose to seek permission to appeal from these findings.
Michael Silverleaf KC and Kyra Nezami instructed by Michelmores LLP appeared for the Claimant.
Edward Cronan instructed by Shepherd and Wedderburn LLP appeared for the Defendants.
https://www.11southsquare.com/2023/11/edward-cronan-joins-11-south-square/
-----------------------------------------------------
11 South Square
1923–2023 • CELEBRATING 100 YEARS
Barristers
Michael Silverleaf KC
Recent & Notable Cases
Sycurio v PCI-Pal [2023] EWHC 2361 (Pat)
The judgment discusses the composition of the Skilled Team and claim construction. The court held the patent obvious over the prior art patents and not infringed. The claimants propose to seek permission to appeal from these findings.
Michael Silverleaf KC and Kyra Nezami instructed by Michelmores LLP appeared for the Claimant.
Edward Cronan instructed by Shepherd and Wedderburn LLP appeared for the Defendants.
https://www.11southsquare.com/barristers/michael-silverleaf-kc/
Victor,
I will have a look at those when the site is back up.
I am sure Dentons is limbering up for a monster reply to Mathys earlier effort.
By the way, the stuff you posted on Mrs Justice Bacon and Haji-Ioannu was interesting. Another witness she has eviscerated! And another case of solicitors being too “helpful”.
Thanks, Lucretuis
The same method of answering, as the EP2286576 reply
Was digging into some UK Documents, when it went down due to maintenance.
TELEPHONE SIGNAL PROCESSING, GB2562163 (exam report)
----------------------------------------
GB2535434 - Method and apparatus for implementing telephone payments (Third party observations)
Status Terminated before grant
Filing Date 12 December 2014
Publication Date 24 August 2016
Not In Force Date 25 February 2017
Application Title Method and apparatus for implementing telephone payments
Applicant / Proprietor AERIANDI LIMITED
07 September 2016..Third party observations
17 October 2016..Letter - Third party observations
https://www.ipo.gov.uk/p-ipsum/Case/PublicationNumber/GB2535434
-------------------
This was cited by ECK, in the EP3603043 opposition Documents
WO2016092331A1 METHOD AND APPARATUS FOR IMPLEMENTING TELEPHONE PAYMENTS
Applicants
AERIANDI LTD [GB
https://worldwide.espacenet.com/patent/search/family/054937269/publication/WO2016092331A1?q=pn%3DWO2016092331
-----------------------------
And PCIP, cited Syntec/ Westlake
EP3029918 - SYSTEM AND METHOD FOR SECURE TRANSMISSION OF DATA SIGNALS IN A CALL CENTRE
https://register.epo.org/application?number=EP15198111&lng=en&tab=main
-----------------
System and method for secure transmission of data signals
https://patents.google.com/patent/US20170026516A1/en?oq=20170026516
---------------------------------
Dentons, looking to beat Mathys 52 page reply?
EP2286576
10.11.2023 Letter regarding the opposition procedure (no time limit)
https://register.epo.org/application?documentId=LOSL8EITPDHYG7L&number=EP09742359&lng=en&npl=false
Mainly 1. I think. Force PCIP to cut back on S&M spend, which partly succeeded given taht PCIP have delayed moving into continental Europe til next year
Lol. Mathys & Squire fight back:
https://register.epo.org/application?documentId=LORLO4FM1BHKJ2A&number=EP18715240&lng=en&npl=false
I'm left wondering what Sycurio's intentions were / are:
1. Make PCIP burn cash.
2. Consume PCIP's management in a legal swamp.
3. Take a look at PCIP's engineering for Agent Assist.
Hi NoCheddar
It does make you wonder. This Document is dated 17th May 2023.
Read from 24 Counterclaim
https://www.ipo.gov.uk/p-ipsum/Document/ApplicationNumber/GB1020894.0/64547799-c621-49c2-a23c-864f9dd85379/GB2473376-20230619-Letter%20%20Agentapplicant.pdf
Hi Victor,
Thought this was an interesting little snippet in yesterday's Prelims:
"Sycurio also accepted that the variants submitted by PCI Pal, which were changes it could make to its solution, would also not have infringed."
Sounds familiar?
Maria Ward-Brennan
Fri, 10 November 2023
During the case, High Court judge Justice Bacon previously found Haji-Ioannou to be a “deeply unimpressive witness” concluding that she could place “very little weight on his evidence”.
Last month, the Court of Appeal upheld Judge Bacon’s ruling that Easygroup had failed to prove genuine use of any of the trademarks by IWG.
In a statement following the decision, Haji-Ioannou said: “We are disappointed that the Court of Appeal found that Mr Dixon’s Regus is not infringing our marks with its use of www.easyoffices.com in what is essentially a ‘live and let live’ decision.”
https://uk.finance.yahoo.com/news/charity-tech-firm-vows-fight-060000728.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvLnVrLw&guce_referrer_sig=AQAAABtj8qeLefXu9HBBXxiaUeJzDhIHpCQf8uv_inSCTibt6fObBiyF71cFNliOfHBdvxCuZbaVvUyXUXjwdwgm3sxUh54IpgzONamt4F1UxwzuQS3yNSi8QND_IuVT6UhJT9EmoftgsYRmEjXp4mNmxrObUKZgTFZDrMhbLsbns7pJ
------------------------------------------
MRS JUSTICE BACON
Between :
EASYGROUP LIMITED
Claimant
- and -
(1) NUCLEI LIMITED
(2) PATHWAY IP SARL
(a company incorporated under the laws of Luxembourg)
(3) REGUS GROUP LIMITED
(4) IWG PLC
(a company incorporated under the laws of Jersey)
Defendants
13. "easyGroup’s principal witness was Sir Stelios, who is the founder, ultimate beneficial owner and director of easyGroup. He provided a witness statement for these proceedings, and also relied on a previous witness statement given in October 2009 for the purpose of his defamation claim against Mr Dixon and others. When cross-examined Sir Stelios was revealed to be a deeply unimpressive witness. He was argumentative, giving answers that were defensive to the point of implausibility, and repeatedly contradicted points set out in one or other of his witness statements. It was clear that he had a poor recollection of the events that formed the background to these proceedings. It also became evident that his most recent witness statement contained substantial material that (contrary to the requirements of Practice Direction 57AC) was not within Sir Stelios’ personal knowledge and recollection, but was instead drafted by his lawyers, giving evidence of points on which Sir Stelios had no clear recollection whatsoever. In those circumstances I unfortunately have to conclude that I can place very little weight on his evidence save where it is corroborated by other evidence in the case, including contemporaneous documents"
https://www.bailii.org/cgi-bin/format.cgi?doc=/ew/cases/EWHC/Ch/2022/901.html&query=(.2022.)+AND+(EWHC)+AND+(901)+AND+((Ch))
Possibly, though I'd be surprised if that many people viewed the Cavendish note that quickly. 16% growth would mean quite a dramatic change in their business trajectory and if that were the case, they could cut back on spending more than is in the Cav note
I would imagine it's because of disappointment in the FY25 numbers. That's effectively management guidance and only calls for growth of 16%.
Surprised by the share price reaction, though the lower price reduces my holding value enough to allow me to add more!
Trying to work out why people will have sold today. Current trading looks good - adding 11% more ACV than last year in a tough market. Will on course for profitability this year. Cash is no problem given they've stated that the remaining legal costs and will be profitable as well as cash balance + facility.
Only thing I can think of is whether people might mistake the +11% narrative and think that means that they're only growing at 11% rather than the new ACV being on course for 25%-30% growth?
There's a 35 page Cavendish note available on Research Tree. Crazily pessimistic - £22.1m revenue in FY25 and 1.5p EPS. My own figures are around £24m and 3p-4p. At least they reference them as being conservative!
Anyone managed to get hold of the house broker forecasts for FY25?
Yes, looks like someone is being pushed and framing it differently. They have a CMO on the marketing team, and quite possible that they have this manager level under her here in the UK and an equivalent in the US
Ah interesting, she probably just got the sack then!
Bit odd that, because they are hiring for a Marketing Manager, though UK based.
You will be responsible for driving global demand generation activities, and working with internal team and external agencies to develop integrated digital campaigns including paid social, paid search, content and nurture activities. The successful candidate will work with our sales team to grow the pipeline through generating great content, new communication channels and smart nurture activity.
https://www.pcipal.com/why-us/careers/marketing-manager-uk-based/
Looks like PCIP are doing a little restructuring. Not a total surprise in the current market.
https://www.linkedin.com/posts/kaylahilton_openforwork-b2bmarketing-saas-activity-7126225993526034432-wq9x?utm_source=share&utm_medium=member_desktop