Performing Right Society Ltd v B4U Network (Europe) Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Moses,Lord Justice Kitchin,Lord Justice Underhill |
| Judgment Date | 16 October 2013 |
| Neutral Citation | [2013] EWCA Civ 1236 |
| Docket Number | Case No: A3/2012/2929 |
| Court | Court of Appeal (Civil Division) |
| Date | 16 October 2013 |
[2013] EWCA Civ 1236
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
INTELLECTUAL PROPERTY
The Hon. Mr Justice Vos
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Moses
Lord Justice Kitchin
And
Lord Justice Underhill
Case No: A3/2012/2929
Mr James Mellor QC and Mr James Abrahams (instructed by Field Fisher Waterhouse Llp) for the Appellant
Mr Robert Howe QC (instructed by Taylor Wessing Llp) for the Respondent
Hearing date: 4th July, 2013
Approved Judgment
Integral to Bollywood films are the songs and dances. The songs comment on the narrative, express a character's sentiments and afford an opportunity for the film to display extravagant choreography, costume, set design and cinematography. Salim and Suleiman Merchant are composers of renown, frequently commissioned to compose the songs on which so many Bollywood films depend for their success. Soundtracks have been commissioned from Salim Merchant since 1996 and Suleiman since 1997.
On 9 June 2004 these composers entered into written agreements with the respondent, the Performing Right Society Limited (the PRS), a music rights collecting society, which has, from 1914, administered within the United Kingdom and other territories certain rights which include the right to broadcast copyright musical works on behalf of writers and publishers of copyright music and associated lyrics. The PRS licenses those who use the works of its members and distributes royalties which it obtains, on behalf of its members, from the licensees.
By Clause 2(a) of the agreement Salim and Suleiman Merchant agreed to transfer to the PRS:
"absolutely for all parts of the world the rights which belong to you on the date of this Agreement or which you may acquire or own whilst you remain our member".
I have underlined the words which are central to this appeal.
Just over four years later, on 15 September 2008, the composers were commissioned by the producers, Dharma Productions Private Limited, to write music for the film Kurbaan. Under that commissioning agreement they were engaged as "Music Directors" to create, conduct, perform and record the music for the film (Clause 1 Engagement). The agreement continues:
"2. COPYRIGHT
(a) The Music Directors hereby confirm and agree that the entire copyright (if any) or any performer's rights, if any, or any other rights arising from the Services or the product of the Services of the Music Directors, including without limitation the Music shall vest with the Producer as the first owner of the same pursuant to this contract of service executed. This shall be applicable to all present and future work arising out of the Services. This right shall be exercised for the whole period of the right and in all territories of the world;
(b) The Music Directors hereby expressly consent to the incorporation of the Music and the performance of the Music Directors, if any, arising consequent to the rendering of the Services in the Film. Consequent to the same the Music Directors confirm that the Music Directors do not have and shall not exercise any performer's rights under the provisions of the Copyright Act 1957 ('the Act');
(c) Without prejudice to the aforesaid, in the event of any copyrights or any other rights, including performer's rights being vested by law in the Music Directors, in respect of the Music, the Music Directors hereby assign to the Producer without any limitation, reservation or condition the entire copyright and performer's rights and all other right, title or interest of whatsoever nature … whether vested, contingent or future in or to the product, results or proceeds … of the Services … whether now known, or in the future created to which the Music Directors are now or may at any time after the date of this Agreement be entitled by virtue of or pursuant to any of the laws in force in any part of the world to hold to the Producer, its successors, assignees, and licensees absolutely for the whole period of such rights for the time being capable of being assigned…"
By a chain of licensing agreements, which are not material, a satellite television broadcaster, B4U, the appellant, which specialises in music videos from Bollywood films, and in broadcasting the films themselves, acquired video rights to broadcast the song Shukran Allah from the music in the film Kurbaan. On 7 April 2010 B4U broadcast that song and PRS claimed for infringement of what it contended was its copyright. Vos J ( [2012] EWHC 3010 (Ch)) gave summary judgment under Part 24 of the CPR on the basis that B4U had no real prospect of successfully defending the claim in relation to the song.
When the composers entered into the agreement with PRS and the agreement with Dharma, the song had not yet been composed. Before this court, the parties accepted that both the agreements, therefore, took effect as equitable assignments of a future copyright. If the song, Shukran Allah, came within the scope of the equitable assignment to PRS, then, under the rules of priority in relation to equitable assignments, PRS is owner of the copyright. Those rules dictate that the first assignee in time, in casu PRS, becomes the owner.
But B4U contends that Dharma is owner of the relevant copyright to that song because the rights to the song never came within the class of rights assigned to PRS in June 2004. The reason why the copyright in the song fell outwith the class of rights assigned to PRS is, so B4U contends, because the composers never owned the rights to the song. As soon as it was composed, copyright in the song was owned by Dharma by virtue of section 91(1) of the Copyright, Designs and Patents Act 1988. Although resolution of the appeal turns on the proper construction of the agreement with PRS, in the light of this argument, it is necessary to consider the relevant provisions of the 1988 Act.
Section 91(1) provides:
"(1) Where by an agreement made in relation to future copyright, and signed by or on behalf of the prospective owner of the copyright, the prospective owner purports to assign the future copyright (wholly or partially) to another person, then if, on the copyright coming into existence, the assignee or another person claiming under him would be entitled as against all other persons to require the copyright to be vested in him, the copyright shall vest in the assignee or his successor in title by virtue of this subsection.
(2) In this Part –
'future copyright' means copyright which will or may come into existence in respect of a future work or class of works or on the occurrence of a future event, and
'prospective owner' shall be construed accordingly, and includes a person who is prospectively entitled to copyright by virtue of such an agreement as is mentioned in subsection (1) …"
The effect of section 91 is best understood in the context of the law as it was before the introduction of its predecessor, section 37 of the Copyright Act 1956. At common law a man cannot give to another that which he does not own or does not yet possess. Thus, absent statute, a work must be in existence before ownership in the rights in the work can be assigned at law. But although future property, or an expectancy, cannot be assigned at law, equity would decree specific performance of the contract, provided it was for value and sufficiently specific ( Maitland on Equity, 2 nd ed. 1936, p.150, Kitto, Equity Doctrines and Remedies Butterworths Aus. 2002).
Accordingly, where an author, or composer, assigned the copyright in works which he had not yet created, the assignment took effect only in equity as an agreement to assign future copyright in those works, should they be created. Once the work was created, the legal title would have to be dealt with by a separate assignment.
PRS v London Theatre of Varieties [1924] AC 1, 13–14 illustrates a particular problem which flowed from the fact that an assignment of future copyright had no effect in law. PRS failed to obtain a perpetual injunction against music hall proprietors to prevent unlicensed public performances of 'the Devonshire Wedding' and 'Love in Lilac Time' because they did not own the legal right to the copyright and had not joined the legal owners. Section 37 of the 1956 Act, now section 91, remedies that difficulty and avoids the need to join those who would have remained legal owners but for the operation of that section. ( Chaplin v Leslie Frewin (Publishers) Ltd [1966] 1 Ch 71, 96–96 (cited by Vos J [33]). Section 91, like its predecessor, vests legal title in the assignee as soon as that work is created; there is now no need for a separate assignment of legal ownership ( Copinger & Skone James Copyright ( 16 th Ed. 2011 5–108, p.304)).
As the judge noted, [37], the reference in section 91 to "entitled as against all other persons" is an acknowledgement of the rule in equity that the first equitable assignee would be entitled to specific performance in priority to others to whom the prospective owner purported to make a later assignment of the future copyright. ( Copinger 5–110 (e) p.305).
Accordingly, the only question which calls for resolution is whether the song Shukran Allah comes within the scope of the assignment to PRS on 9 June 2004. If it does, it is agreed that that assignment, as the first in time, takes priority over the purported assignment to Dharma.
The relative clause in 2 (a), describing the rights assigned to PRS, is...
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