30 January 2017 by Paul Harris
All too often the agreements are sought to be overturned because they are no longer convenient for one party
Whenever litigation involving celebrities occurs, I am always curious as to what the motivation is for them doing so. The immediate knee-jerk response is always to assume that the celebrity wants more money, and so considered greedy by the popular press, whereas it is often other motivations such as quality control or simply wanting to use their own name.
In the recent case involving members of Duran Duran trying to wrest the copyright from the publishing company they originally assigned it all to, the temptation to cry ‘greedy’ is there again, but somehow I doubt that was the issue at all. After all, the hits in dispute, such as ‘Rio’, ‘Girls on Film’ and ‘A View to a Kill’, all receive a staggering amount of airplay − the royalties must be rolling in.
But I guess I will never know since they failed to recover the copyright in their songs.
The written decision is mercifully short; this from a judge (Arnold J) meticulous in detail, and who generally follows his math teacher’s advice religiously and explains all his working out. It does, however, provide a useful reminder about the importance of express terms in contracts − in this case publishing agreements in which current and future copyright is assigned − the interpretation of them, and the issue of non-derogation from grant. Or, as the Judge put it, giving with one hand and taking away with the other.
In essence, the band members executed individual music publishing agreements back in 1980, and again in 1993 when their ‘services’ were provided through companies they had each set up for that purpose.
The key provisions in the agreements were: the assignment of existing copyright and future copyright (Clause 3(a)); a clause relating to modification/adaptation of the entire copyright (Clause 4); a warranty provision as to ownership (Clause 6); a further assurances clause (i.e. that the author will do all acts and execute all documents to give effect to the agreement etc – Clause 12); and finally the law and jurisdiction clause (Clause 18), being English law and exclusive jurisdiction of the English Court.
In 2014, the band members sought to terminate these agreements and recover the copyright in their songs in the US by giving notice pursuant to section 203 of the US Copyright Act. That provision, if applicable, would cause the reversion of US copyright back to the owner.
The Judge first had to consider law and jurisdiction, which were, to say the least, manifestly obvious: English law and jurisdiction. However, the Judge had to consider the effect of English law both in giving effect to the Rome Convention on applicable law, as well as common law. The Judge noted that the UK had not (and he emphasised the ‘not’) agreed to a provision, which gives mandatory effect to another country’s law where there is a close connection to the contract.
The common law rule considers that the law arising in the country of protection is the one to decide whether and to what extent copyright can be assigned. Beyond that, however, is the question of whether, and to what extent, title has in fact been assigned by an agreement governed by English law, which depends on the effect of the agreement applying English law − and in particular English principles of contractual interpretation.
In considering the applicable principles of English law, the Judge believed there were only two issues: interpretation of written agreements and non-derogation from grant.
In relation to the former, there was no dispute as to the correct approach, namely that this is an objective test in which the court asks simply what the reasonable man would consider the contract to mean, having all the relevant background knowledge (in this case including the effect of international law) material as at the date of the agreements.
The non-derogation from grant issue merited marginally more time spent on it, but save for one comment from the Judge was never going to be in doubt. That is, that this doctrine arises in property law and is essentially (as stated before) that one cannot give something to someone freely, but then ask for it back or claim the freedom was somehow restricted or revocable.
That this was applicable to copyright was also not in doubt following the House of Lords’ landmark decision in British Leyland v Armstrong back in 1986, which lead to the reform of copyright. In that case, British Leyland sought to claim copyright infringement by Armstrong who manufactured spare parts (such as exhaust pipes) for cars.
The law lords considered that once the car manufacturer had sold the car, they could not stop the owner of the car getting it repaired how he liked and whether with original parts or spare parts. To allow otherwise, would be to derogate from the rights given to the owner to decide on the fate of his/her car.
In assessing the matter, the Judge considered that because the assignment clause used the phrase ‘entire copyrights’ coupled with other provisions, which stated likewise, then the band members had assigned everything over to the publishing company. Given that the contracting parties are taken to be aware of international law and its effect (in this case section 203 of the US Copyright Act), if they had wanted to express that this was to be incorporated they should have said so.
As the parties’ intention had been to vest all copyright in the publishing company, to allow section 203 to operate would constitute a derogation from grant. That was therefore precluded by the assignment of all the rights. Accordingly, by serving notices under section 203 and claiming that copyright in the various songs were to return to the band members, they were in breach of the publishing agreements.
In his concluding remarks on the case, the Judge considered that the arguments had been ‘finely balanced’ and it was ‘not without hesitation’ that he had decided in the publishing company’s favour. I am not sure if he was just being diplomatic about the band member’s case, or that he is a big fan and he is sorry he has had to decide this case this way.
Whatever truly lies behind his comments, I am pleased he has done as he has. All too often, the agreements parties have freely reached (with heavy lawyer support) are sought to be overturned because it is no longer convenient for one party to accept its original contractual responsibilities. I have no idea what went on back in 1980 or 1993 between these contracting parties, but it is sad when what appears to have been a successful relationship ends up in court.
No doubt the grievances that have been aired in cases like those featuring Elton John and George Michael, and now this one, will cause young musicians to take careful legal advice.
Or perhaps they will acknowledge how in the pharmaceutical world, only rarely do you get a blockbuster drug, but that one pays for all the others that do not make it past clinical trials. Duran Duran are that blockbuster of the musical world, but they so easily might not have been.