Sony/ATV Music Publishing LLC and Another v WPMC Ltd and Another

JurisdictionEngland & Wales
JudgeThe Hon Mr Justice Arnold,Mr Justice Arnold
Judgment Date01 July 2015
Neutral Citation[2015] EWHC 1853 (Ch)
Date01 July 2015
CourtChancery Division
Docket NumberCase No: HC-2012-000143

[2015] EWHC 1853 (Ch)

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Rolls Building

Fetter Lane, London, EC4A 1NL

Before:

The Hon Mr Justice Arnold

Case No: HC-2012-000143

Between:
(1) Sony/ATV Music Publishing LLC
(2) Sony/ATV Music Publishing (UK) Limited
Claimants
and
(1) WPMC Limited
(2) Iambic Media Limited (In Liquidation)
Defendants

Ian Mill QC and Andrew Scott (instructed by Forbes Anderson Free) for the Claimants

Alastair Wilson QC and Stephanie Wickenden (instructed by McFaddens LLP) for the First Defendant

Hearing dates: 15–16 and 18–19 June 2015

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

The Hon Mr Justice Arnold Mr Justice Arnold

Contents

Topic

Paragraphs

Topic

Paragraphs

Introduction

1–8

The Concert

9–10

The Concert Video

11–13

The Copyright Works

14–15

The Documentary

16–19

Factual background

20–77

Issue 1: Collateral contract

78–91

WPMC's primary case

79–82

WPMC's alternative case

83–90

Assignment of the benefit of the contract

91

Issue 2: Proprietary estoppel

92–95

Issue 3: Fair Use

96–123

Principles

96–109

Factor (1)

102–103

Factor (2)

104

Factor (3)

105–108

Factor (4)

109

Assessment

110–123

Factor (1)

111–113

Factor (2)

114

Factor (3)

115–116

Factor (4)

117–121

Overall assessment

122–123

Conclusion

124

Introduction

1

On 11 February 1964 the Beatles gave their first concert in the United States of America at the Coliseum in Washington DC ("the Concert"). They performed 12 songs. The Concert was videotaped for subsequent exhibition at cinemas and theatres across the USA ("the Concert Video"). In 2009 the Second Defendant ("Iambic") acquired a copy of the (or at least a) master tape of the Concert Video and set about making a documentary about the Concert entitled The Beatles: The Lost Concert ("the Documentary"). Subsequently the rights to the tape of the Concert Video were transferred to the First Defendant ("WPMC"). The First Claimant ("SATV US") is (subject to the small qualification noted below) the owner of the worldwide copyrights in eight of the songs performed during the Concert ("the Copyright Works") and the Second Claimant ("SATV UK") is the exclusive United Kingdom licensee of the Copyright Works. Between late 2009 and October 2010 Iambic negotiated with the Claimants (collectively "SATV") for a synchronisation licence in respect of the Copyright Works (i.e. a licence to reproduce and otherwise exploit the Copyright Works as part of the soundtrack to the Documentary). No synchronisation licence was executed as a result of these negotiations.

2

In April 2012 it came to SATV's attention that the Documentary was being promoted by means of a website located at www.lostbeatlesconcert. com ("the Website") and a trailer ("the Trailer"). Following correspondence, SATV commenced these proceedings and applied for an interim injunction. Given that the Documentary had been made in the UK, but the Defendants' principal target market was the USA, SATV brought claims for infringement of both the UK and US copyrights in the Copyright Works. The claim for infringement of the US copyrights was brought pursuant to the decision of the Supreme Court in Lucasfilm Ltd v Ainsworth [2011] UKSC 39, [2012] 1 AC 208. On 15 May 2012 David Richards J made an order by consent recording an undertaking by the Defendants not to exploit the Documentary except on 28 days' notice to SATV and a cross-undertaking in damages by SATV. WPMC has not to date given 28 days' notice. It may be that, in reality, this dispute is now about compensation for what happened in 2012; but that does not affect the issues I have to decide.

3

Iambic and WPMC are both English companies. At all material times prior to 17 September 2012, both companies were wholly owned by Christopher Hunt, who was also a director of both of them. Iambic was wound up on 17 September 2012. On 9 January 2013 Mr Hunt was made bankrupt. At around the same time Mr Hunt was replaced as director of WPMC by David Bailey, who also acquired a majority shareholding in WPMC. On 14 January 2014 SATV entered into a deed of settlement with Iambic and its liquidator under which Iambic assigned to SATV all its rights in the Concert Video and the Documentary. Accordingly, SATV have not applied to lift the automatic stay of the claim against Iambic as a result of its being in liquidation.

4

WPMC does not dispute that it has (acting by a contractor, Prime Focus, which carried out the editing of the Documentary) reproduced the whole of each of the Copyright Works on the soundtrack of the Documentary in the UK, and hence committed acts which infringe the UK copyrights in the Copyright Works if it does not have SATV's licence. Nor does WPMC dispute that it threatens and intends to exploit (or at least authorise the exploitation of) the Documentary in the USA by means of an agreement with Ace Arts LLC ("Ace") or that it has (again acting by Prime Focus) transmitted at least one copy of the Documentary to the USA for that purpose.

5

There are three issues to be determined. The first is whether a collateral contract to grant a synchronisation licence was concluded during the negotiations. The second is whether, if no collateral contract was concluded, SATV are estopped from denying that they have granted a synchronisation licence. It is common ground that the first and second issues are to be determined applying English law. The third issue is whether the exploitation of the Documentary in the USA would be an infringement of the US copyrights in the Copyright Works. WPMC contends that it would not, because it amounts to fair use. This issue is to be determined applying US copyright law.

6

It should be noted before proceeding further that on 6 June 2013 Ace brought proceedings in respect of the Documentary against SATV US and Apple Corps Ltd ("Apple") in the US District Court for the Central District of California Western Division. Ace subsequently discontinued those proceedings and re-filed them in the US District Court for the Southern District of New York. In those proceedings Ace seeks a declaration that neither SATV US nor Apple have any rights which would be infringed by commercial exploitation of the Documentary in the USA. In particular, Ace contends that exploitation of the Documentary would not infringe the US copyrights in the Copyright Works because it amounts to fair use. Thus the issue of fair use has been raised in both sets of proceedings. In those circumstances I approach the issue with some diffidence; but that does not absolve me from the responsibility of deciding it.

7

The only witness of fact who gave evidence before me was Mr Hunt. Mr Hunt is a television producer and media executive of almost 30 years' experience. Much of his experience is in the field of music films and television productions, and he has long experience of musical copyright clearance. Although he is not a lawyer, during the course of his career he has acquired some knowledge of some areas of the law, particularly contract and copyright law. Counsel for SATV submitted that Mr Hunt was not a reliable witness. In my assessment Mr Hunt was an essentially truthful witness, but his evidence did suffer from two flaws. First, as he readily accepted, he had understandable difficulty recollecting precise details of events which took place five to six years ago. Secondly, I consider that some of his evidence was coloured by his awareness of the legal issues. In any event, so far as the first two issues identified above are concerned, what matters are the communications that passed between Mr Hunt and SATV, mainly by email, which must be objectively assessed.

8

In addition, I heard evidence from two experts on US copyright law. SATV's expert witness was William Hart, an attorney who has specialised in copyright since he was admitted in 1982 and who was recently Co-Chair of the copyright practice at Proskauer Rose LLP. He is also an Adjunct Professor at Brooklyn Law School in New York City. WPMC's expert was Prof Peter Jaszi, who is Professor of Law at the Washington College of Law, American University, Washington DC and Director of the Glushko-Samuelson Intellectual Property Law Clinic. He is also an attorney and a Trustee of the Copyright Society of the USA and a member of the Editorial Board of its Journal. Among other publications, he is the author of "When Works Collide: Derivative Motion Pictures, Underlying Rights and the Public Interest" 28 UCLA Law Review 715 (1981) and "Copyright, Fair Use and Motion Pictures" 2007 Utah Law Review 715. He is also the co-author of the Documentary Filmmakers' Statement of Best Practices on Fair Uses (November 2005). Both experts had prepared expert reports which, in addition to setting out the relevant principles of US law, had inadmissibly sought to apply those principles to the facts of the case. At my suggestion, it was agreed that both experts should give evidence by videolink. In addition, I guillotined the cross-examinations to one hour each. I am grateful to both experts for their assistance, but their oral evidence added little to my understanding of the principles which are set out in the cases and other materials identified in their reports.

The Concert

9

It is relevant to note that the Concert took place less than three months after the assassination of President Kennedy and shortly after the Beatles' first appearance on the Ed Sullivan Show on US television. The arrival of the Beatles in New York, their appearance on the Ed Sullivan Show and the Concert marked the start of "Beatlemania" in the USA.

10

The songs...

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