Case No. IP-2018-000200

14.Mr Penhallurick’s first contract of employment with MD5, dated 6 November 2006, was for a fixed three month term. In January or February 2007 he entered into more permanent terms of employment by a written contract which, as both parties agree, was backdated, but incorrectly to 6 October 2006. It has consequently been referred to as “the 2006 Agreement”. 15.From March 2007 VFC software was offered and sold to customers of MD5, but the basis on which this was done is disputed. Mr Penhallurick says that the software was offered and sold under licence from him. MD5’s case is that customers were given a written End User Licence Agreement (“EULA”) identifying MD5 as the licensor, which it was, and that Mr Penhallurick had approved the EULA. 16.In November 2008 Mr Penhallurick and MD5 signed an agreement under which Mr Penhallurick was given an annual bonus of 7.5% of annual sales by MD5 of VFC software. It was referred to in evidence and argument as “the November Agreement” but to be clearer I will call it “the November 2008 Agreement”. 17.18.19.A further agreement was entered into on 8 November 2011 (“the 2011 Agreement”). The terms were not relevantly different from those of the November 2008 Agreement, save that there was an increase of the annual bonus to 10% of the value of VFC software sales. 20.On 26 February 2016 Mr Penhallurick resigned from his employment with MD5. His last working day was 22 April 2016 and his last day of employment was 30 April 2016. 21.On 20 April 2016 the parties entered into a final, written, agreement (“the 2016 Agreement”). Its effect is in dispute as I will discuss below. 22.In January 2018 MD5 stopped payments under the 2016 Agreement which, by common consent, brought the 2016 Agreement and the commercial relationship between Mr Penhallurick and MD5 to an end.