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"I infer from that email that either Sycurio did not have expert input before issuing proceedings, or had received expert input from Ms Penn and were looking to replace her, or considered that her expertise in VoIP and SIP technology was insufficient.
PCI Pal first had notice of the experts selected by Sycurio on 6 July 2022. My assumption when I saw that Sycurio had instructed Ms Penn and Professor Leung was that Professor Leung would speak to the technical aspects of the Patent concerning VoIP telephony and implementation in a call centre, and Ms Penn would speak to payment processing. They would in effect mirror Mr Robinson and Mr Whittaker. From looking at Mr Leung’s background, an obvious weakness was that he had no practical experience of actually implementing a telephony system in a call centre that was taking payments. This is reinforced by Ms Penn when she says:
“As is apparent from Professor Leung’s report, telephony and computer engineers are not engaged in the development of payment systems. Nor do they have knowledge of the needs of the payment card industry or its security requirements.”
However, when I received Sycurio’s first expert reports it was immediately apparent that this was not the approach that was taken. Professor Leung’s evidence was limited to a very technical, and essentially non-controversial explainer of the background technology. There was a critique of the PPD, but PCI Pal were able to respond to that critique with further explanations.
Ms Penn’s report made it clear that she was taking the same approach as she did in the case against Eckoh. She said: “I have reviewed the expert reports I gave in that case and have incorporated elements of them in this report as appropriate. My opinions regarding the patent and the invention have not changed since I gave evidence in the Eckoh Litigation.” “I became familiar with the Patent during my previous experience acting as an expert witness in the Eckoh Litigation. I note that some of the points being made by PCI-PAL in the present case rely on prior art documents, some of which were also cited in the Eckoh litigation. In the course of preparing this report, I have reviewed what I said about that prior art in my reports in that case. My views about the relationship of the invention of the Patent to that prior art have not changed.”
She also made clear the basis upon which she was (apparently) approaching the Patent: “I do not have expertise in the technology and operation of call processors and computers which might be required to implement the process of the Patent. Nor do I consider that such expertise is necessary to understand or evaluate the invention of the Patent and whether it is likely to be an effective solution to the requirements of PCI DSS. That expertise is needed only once the decision has been made that it is worth considering use of the invention to provide the underlying technical implementation.”
(continued in
Unbelievably, as darkness falls, a second package has plopped through the letterbox. Another ethics handbook! This time the magnum opus is from Michelmores, lawyers for Livingbridge/Sycurio in the patent case. It, too, comprises just two words: “MONEY FIRST”. The publisher is TOWINE Corporation (Vanuatu) Ltd, an extremely obscure publishing house that I had not heard of before. After some Googling, I eventually twigged that TOWINE is an acronym: “The Only Way Is No Ethics”.
On that note, here is another extract, which features Miichelmores heavily, from PCIP’s lawyer’s witness statement, this time on the subject of experts. (I have cut the length of a few paragraphs. And, for the sake of clarity, the rubric is mine).
An expert, an expert, my carried interest for an expert!
“I recognised the importance of instructing an appropriate expert, and sought expert input almost immediately. I was aware that Craig Robinson was an expert in the field, and that he had previous experience as an expert in the claim by Sycurio against Eckoh……...
On 31 January 2022, by way of email to Michelmores attaching draft Directions, I initially proposed a single expert for each side. From my perspective, it appeared that Craig Robinson could cover all issues in a proportionate way……
However, in the last few days before the CMC, Michelmores proposed changes to the draft Directions which provided for two experts. The amended Directions were sealed on 11 February 2022 and allowed parties: “one expert witness in the field of telecommunications including VOIP and SIP communications and one expert witness in the field of payment processing to address the technical issues to be decided at the trial”……..
On 12 April 2022, almost seven months after proceedings were served, and three months before the deadline to name the experts instructed, StableLogic Limited (the company of which Craig Robinson is the CEO) received an enquiry to their generic sales@ email address from Michelmores asking if the company could assist their search for an expert in communications applications employing SIP and VoIP applications. Michelmores explained that the proposed expert will be an expert in payment processing in telecommunications products, especially the use of VoIP and SIP technology.
(continued in part 8)
An earlier extract in the statement reads:
“A mediation was ultimately agreed and took place on 25 January 2022. The parties and named individuals signed a Mediation Agreement on the day, in which it was agreed everyone would keep confidential all information produced for or at the mediation. In preparation for that mediation PCI Pal prepared a position paper that contained an overview of their position on various issues as well as (confidential) schematics showing how Agent Assist operated. It also disclosed, as requested, (confidential) financial information relating to income and expenditure generated by Agent Assist”.
(More to follow later)
Late last night a package was posted through my letterbox. On the brown envelope, a typewritten message, mysteriously in French, read: “A l’attention du blogueur qui traite l’affaire Sycurio/Livingbridge”.
Inside was a hardback booklet on moral philosophy by Livingbridge. The title on the cover was “Ethics handbook (updated June 2021)” and the subtitle “A statement of the obvious”.
The booklet is not long. In fact, it is very short and, thankfully, written in plain English. For fear of being accused of making this up, I will quote verbatim the whole of the booklet. It reads: “ANYTHING GOES.”
On that note, here is a further extract from the witness statement of PCIP’s lawyer at Shepherd & Wedderburn, who led PCIP’s defence and counterattack in the recent patent case. When reading this bear in mind that on 7th June, just before the trial started, PCIP issued a RNS entitled “Breach of confidentiality agreement by Sycurio Ltd”. This mentioned that the breach occurred during a session in an April 2022 Sycurio board meeting that a number of personnel from Sycurio were involved in and also that “involved personnel from Sycurio’s private equity owners Livingbridge LLP”.
Livingbridge ne regrette rien
The subject matter of the extract is confidentiality:
“The question of the confidentiality of the information produced by PCI Pal in these proceedings is a matter of ongoing concern to PCI Pal.
In late May this year, shortly before trial in the UK, PCI Pal’s US counsel received a letter from Sycurio’s US counsel in which it was explained that at a Sycurio Board meeting in April 2022:
“Mr. Lovelock and Mr. Mosely [both of Sycurio] presented information regarding Sycurio’s technology and call flows, and various competitor technology and call flows, including PCI Pal, and information from the [Mediation] Position Paper may have been incorporated into the presentation and corresponding slides.”
On 5 June 2023, I wrote to Michelmores setting out PCI Pal’s concerns and sought further information and certain undertakings relating to further dissemination of the information. That letter sets out the sequence of events as far as PCI Pal could ascertain.
On 9 June 2023, Michelmores responded describing the use of information regarding the deployment topologies as “regrettable”. Certain undertakings were provided, although restricted to the material contained in the Mediation Position Paper. The Board meeting at which competitor technology was discussed came after the disclosure of the PPD, and signature of further confidentiality undertakings, so PCI Pal are concerned that in fact the much more detailed information in the PPD informed the content of Mr Lovelock and Mr Mosely’s presentation. Again, this behaviour has given rise to concerns on PCI Pal’s part that one objective of the litigation may have been to allow Sycurio to develop a better understanding of how Agent Assist Gen
As for the matter of leave to appeal, it seems unlikely that Mrs Justice Bacon, who has described the High Court as a “collegiate place”, will grant this, leaving Sycurio with the option of not appealing, or applying to the Appeals Court for leave to appeal. The fact that Mrs Justice Bacon delivered her judgment several weeks after her self-imposed deadline of the end of July implies to me that she took especial care, and consulted colleagues as necessary, to ensure her judgment contained no errors of fact or law.
(More to follow over the weekend from the witness statement about confidentiality.)
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)
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”.
Lol. Mathys & Squire fight back:
https://register.epo.org/application?documentId=LORLO4FM1BHKJ2A&number=EP18715240&lng=en&npl=false
Victor
I think those documents might be very helpful, in particular the one on PCI-DSS compliance. I can’t see any date on it but it is obviously from 2012 or later as there is a reference in the document to data breaches in 2011. Have you spotted any way of dating it more precisely?
Victor,
Thanks.
The dates of the questions raised of Eckoh in 2012 and 2013 about potentially infringing Semafone’s patents are interesting. For instance, tbe meeting with Laura Ashley in Rome was the same day the UK IPO had informed Semafone the patent would be granted, but a month before the patent was actually granted. This implies a campaign of “unjustified threats” (Eckoh’s phrase in the counterclaim) to potential Eckoh customers, even in anticipation of the formal grant of the patent.
The same modus operandi with a call from Lebara in October 2013 to inform Eckoh that Semafone had emailed Lebara to say that Eckoh was being sued for patent infringement by Eckoh. This was a month before the infringement proceedings were actually started in the High Court.
I now realise the Semafone web page with the alleged ‘Malicious Falsehood’ is publicly available:
https://www.ipo.gov.uk/p-ipsum/Document/ApplicationNumber/GB1020894.0/e913123d-d9de-4e7a-ab14-9bfccaff22c2/GB2473376-20140414-Letter%20%20Agentapplicant.pdf
I am working on the comment you mention, but so far without luck.
Victor,
Yes, I have. The colour coded box in the latest filing is a (very) condensed version of that.
The continuing absence of Tim Critchley remains very strange. Nice stuff on Pogo but in the end I think he said it hardly sold because it was overtaken by 3G?
Incidentally, it is worth looking again at Eckoh’s Defence and Counterclaim in the Semafone litigation, in particular what Semafone was allegedly up to (see pages 5-9, inclusive). It would be good if you could find the old Semafone URL referred to under ‘Malicious Falsehood’ on p 8. Critchley was CEO when all this was allegedly going on. The details in the Counterclaim may help explain Eckoh’ continuing animus towards Semafone/Sycurio.
Victor,
Looks like things are progressing at a leisurely pace as the US court has only just given its blessing to three of the patents’ inventors being deposed in the UK, a month after PCIP’s unopposed request to do so. So it will be 2024 before they are deposed.
Also let’s hope conmon sense prevails and the US Court takes account of Mrs Justice Bacon’s judgment, as PCIP requests. Good coloured coded box in PCIP’s latest filing that illustrates the “substantial similarities” between the UK patent and its US offspring.
Victor,
Yes, a warning shot was fired in September 2020 (this from nemory, I haven’t checked the date), doubtless to be able to show how earnest Semafone was about protecting its IP.
The DC Advisory guff on the Semafone sale is hilarious. Livingbridge “committed significant growth funding “ for Semafone, was the “perfect partner”, and “has a track record of investments.,,,with businesses that, similarly to Semafone, have strong IP…”. Just three problems there: none of it has turned out to be true. Livingbridge hasn’t put any money into Sycurio; looks to have been the perfect partner for IP lawyers not the company; and decisions to date have shown the IP to be invalid rather than strong. But at least it was indeed “an outstanding outcome for Gary”: he trousered about £3.4m.
Victor,
My answer to your question would be that the legal groundwork was aleady being laid in March 2021 for the infringement case against PCIP. Of course, PCIP rather peskily raised more funds in April 2021, which must have reinforced the determination to construct a bogus infringement case, to be based almost entirely on assertion & on the evidence of a non-expert expert.
[Oops]
As Livingbridge/Sycurio continue to butcher the IP portfolio (and apparently the business), Mr Barnett seems carelessly to have inserted a redundant ‘0’ into the “eventual exit” valuation forecast.