On 24 January 2010 Gordon Williams, senior partner in the firm’s Dispute Resolution and Brand Protection groups, delivered his UK Legal Update speech at the international music industry conference MIDEM on behalf of the International Association of Entertainment Lawyers.
The full text of the speech is reproduced below.
MIDEM UK LEGAL UPDATE SPEECH 2010
I am going to give you a quick overview of what’s happened in the legal arena in the UK in 2009 and then I am going to focus on the most important case of the year.
So anything new on the statute books? Well, not yet, but the Digital Economy Bill is wending its painful way through Parliament, with the House of Lords currently discussing as many as 300 amendments. The most contentious provisions are about how to deal with online copyright infringement by peer to peer file sharers. No ‘three strikes’ policy for the UK but instead what’s proposed is for ISPs to have to send notifications to subscribers alleged to be infringing copyright and to record the number of notifications which each subscriber is sent. This information is then to be passed back to rights holders on a no names basis who can then apply to Court to get the subscribers’ names and addresses so that they can take legal action. If this does not reduce piracy by 70% then the Secretary of State will have the power to instruct the regulator OFCOM to introduce technical measures against infringers, with suspension of their internet connection a possible last resort. Note suspension rather than permanent disconnection. As the bill continues to be debated in parliament all sides are on tenterhooks as to whether it will actually make it into law before we have a general election this Spring.
At a European level, the question of the extension of the duration of sound recording copyright is being keenly watched from the UK as with the current 50 year term, for example, early Beatles recordings will shortly start to fall out of copyright, and it looks like the term will be increased to 70 years shortly.
Back to file sharing, and the UK saw its first criminal prosecution against the host of a BitTorrent file-sharing community. This was about Oink, the invite-only file-sharing community set up in 2004 by the then 20 year old computer programmer Alan Ellis which was closed down in 2007 following an investigation by British and Dutch Police working with UK and global record label trade bodies the BPI and the IFPI. Users of the service were invited to make donations ostensibly to cover server hosting expenses and with a view to purchasing a server, and by the time of its closure in 2007 these amounted to about £180,000 which apparently Ellis had not spent but had just left sitting in an account. Four users had pleaded guilty to copyright infringement charges in 2008 but Ellis was prosecuted for the more serious charge of conspiracy to defraud which could carry a jail sentence. However, much to the trade bodies’ annoyance, the jury found Ellis not guilty on the basis of his defence that he had set up the service as an exercise in computer programming, that he had not been aware that the service, as opposed to its users, could be guilty of copyright infringement, and that he had not intended to defraud anyone. There appears to be a general consensus that a claim for authorising copyright infringement as opposed to conspiracy to defraud would have been successful and there is now talk of that being run against him as a civil claim.
As to other disputes, we had the spat between PRS and YouTube which briefly led to premium UK video content being taken off the site until a deal was done, the details of which remain confidential.
And how is the UK music industry bearing up in the global recession? Well the live industry continues to thrive, with London’s O2 arena proving the world’s most popular music venue for the second year running, the music publishing industry is bearing up well and even the record industry is not suffering as much as had been feared with album sales only down 3.5% at 129 million and with the silver lining of the revival of the singles market to the point of overtaking album sales for the first time since the heyday of the single in 1967.
Which brings me nicely on to my case as 1967 was the year Procol Harum’s “A Whiter Shade of Pale” was released. Yes that’s 43 years ago. How can that possibly be relevant at a legal conference in 2010 I hear you ask. Well the fact that, according to the collection society PPL, it is the UK’s most performed recording ever might have something to do with it, and sure enough issues as to who owns the song were up before the highest Court in the land last July, the House of Lords, since re-branded the Supreme Court by the way – no idea where they got that name. To recap, this was a claim against the lead singer and writer Gary Brooker and the publisher and record company Essex Music by the organist Matthew Fisher for a share of the copyright in the song by virtue of his writing the organ part. The claim started in 2005 when the song was 38 years old and it is that delay which is the principal point of legal interest as your instinctive reaction is to say “surely he’s left it too late”.
The delay was raised in the defence in two ways:-
Firstly, that it was too late to have a fair trial, the witnesses won’t remember and some of them are dead, but the dispute wasn’t really about who wrote what but whether the organ part was sufficient to qualify for a copyright interest, so that didn’t work.
Secondly, it was said that the delay itself should deprive Fisher of a remedy and that was the key issue as it played out.
As I reported here 2 years ago, at first instance the Judge found that Fisher’s organ part merited a 40% share of the music, and so a 20% share of the song. The UK limitation period for damages for copyright infringement is 6 years so Fisher was claiming damages for the previous 6 years’ exploitation of the song, but the Judge used his discretion to refuse Fisher any damages for the past because of his delay. But for the future, the Judge made declarations giving Fisher 20% ownership of the song going forward and a 20% entitlement to future income. So at that point the delay was held to be enough to deny Fisher any damages for the past but not his claim to ownership for the future. For that to have happened the Defendants would have had to show that the delay had caused them some detriment, which of course they couldn’t because they had been receiving more royalties than they should have done for the 38 years.
In the Court of Appeal, the Judges were more troubled by the delay and, while they recognised they could not overturn the lower court’s finding of fact that Fisher was a 20% author of the song, they decided they had a discretion to overturn the ownership declaration because of the delay and promptly did so. This left a mess, with Fisher acknowledged as part-author but with no claim to any ownership or royalty entitlement. Quite how PRS was supposed to deal with registration of the parties’ interests in the work at that stage is anyone’s guess.
Then came the House of Lords to put matters right, stressing that there is nothing so sacred in law as a right to ownership of property, be that real property or intellectual property, and such a right cannot be extinguished by delay alone in the absence of the delay causing some form of detriment to the Defendant. So the House of Lords restored Fisher’s 20% ownership for the future. The press then proceeded to cause considerable confusion by reporting the decision as a finding that there is no limitation period on copyright claims in the UK. The actual position, and this case did nothing to change it, is that there is a 6 year limitation period for claims to damages for copyright infringement and there is no limitation period for claims to ownership of copyright. Detriment caused to a Defendant by a Claimant’s delay can prevent a claim to ownership of copyright succeeding, but what this case highlighted is that it will be hard for a Defendant to prove detriment when he has been receiving more royalties than he should have during the period of delay. So it may just be worth another look at those old copyright ownership claims you had assumed were past their sell by dates.
As in all good screenplays, there was however a final twist in the tale for Fisher. One of the arguments raised by the Defendants before the House of Lords was that a clause in the recording agreement which the band including Fisher had signed with Essex Music amounted to a licence for Essex and its licensees to exploit the song in the form of the band’s recording of it. Somewhat unhelpfully, but because the point hadn’t been fully argued before them, the House of Lords made no definitive finding on the point but said that the clause “may” amount to a licence. If it did, while Fisher would still get his 20% of royalties going forward on the 770 cover versions recorded of the song, he would not do so on Procol Harum’s own recording of the song, which, I repeat, has been the UK’s most performed recording ever. So it’s not over yet, and I look forward to bringing you the next instalment in a couple of years time.
© 2010 Gordon Williams