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“There’s no turning back,” sang Cher in her 1998 hit Believe. In fact, a reversion of the copyright in the song has recently been upheld by the Court of Appeal. 1
The court passed no verdict on the famously overt use of Auto-Tune: that, along with the X Factor scandal, has been tacitly consigned to the court of public opinion. The court did, however, rule on two important questions of copyright law:
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Can a partial assignment of copyright be effective if it is for a period of contingent duration? |
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Can an English court rule on a dispute relating to ownership of foreign copyright? |
By answering both questions in the affirmative (and, on the facts, rejecting submissions of waiver, acquiescence and estoppel), the court left no way back for the Crosstown catalogue, which was found to have reverted automatically for breach of contract.
It was this decision by the High Court on automatic reversion that originally set alarm bells ringing in the music publishing industry. In this respect, the song remains the same. From a publisher’s perspective, the case serves as an object lesson in how not to draw up an exclusive songwriter agreement. A breach of contract by the publisher should not give rise to any form of reversion of copyright: it should only bring an end to the songwriting term and trigger the start of the post-term period of ownership known as the “retention period”. Further, a prospective purchaser of a song catalogue should, in conducting due diligence, check carefully that the catalogue is not vulnerable to reversion and take appropriate steps to remedy any flaws in the chain of title before concluding a purchase.
Of course, after the new decision, the song has now taken on a subtly different strain. In ruling on those two (superficially academic) questions, the court has usefully underpinned widespread practices within the creative industries – practices that are routinely taken for granted.
“What am I supposed to do: sit around and wait for you?”
It is worth recounting the facts briefly. The songwriters Mark Taylor and Paul Barry had entered into a series of exclusive songwriter agreements with a publisher, Rive Droite. The contracts provided – unusually – that the copyrights would automatically revert to the writers on an unremedied material breach of contract. The contracts were governed by English law and conferred exclusive jurisdiction on the English courts. Rive Droite purported to assign the copyrights to a US company, Crosstown, but Rive Droite had persistently failed to account to the writers punctually or correctly for royalties (and failed to remedy these deficiencies before the expiry of various cure periods). Crosstown sued Rive Droite and sought declarations against the writers that the copyrights had not reverted to them; the writers counterclaimed for declarations to the opposite effect.
The writers succeeded at first instance in the High Court before Mann J, who held that the copyrights had reverted automatically on expiry of the respective cure periods, without any need for execution of a re-assignment to the writers. The trial judge refused, despite Crosstown’s late submission about jurisdiction, to draw any distinction between UK and foreign copyrights. Crosstown appealed (on the two counts of assignability and jurisdiction described above).
“Life after love”
“Time to move on”, continues Cher. Common sense suggests that, if you own something, you can lend it to someone else and decide how and when you will get it back.
In simple terms, that is what the Court of Appeal said about a partial assignment of copyright. An owner can part with ownership for a period of time, but need not specify a simple period of time: the end point can be contingent on the occurrence of a specified event.
UK legislation does not spell this out. Under section 90(2) of the Copyright, Designs and Patents Act 1988 (CDPA), an assignment of copyright can be limited so as to apply to “part, but not the whole, of the period for which copyright is to subsist”. Crosstown maintained that, for such an assignment to take effect as a legal assignment, the statutory requirements should be construed against the background of the common-law principles of personal property. According to Crosstown:
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those principles suggest that personal property (including copyright) cannot be divided temporally into successive legal estates for uncertain periods of time;
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the assignment must therefore be for a known, fixed and certain period at the outset, i.e. not contingent on the occurrence of an uncertain future event (such as breach of contract);
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accordingly, the purported automatic reversion could only take effect as a contractual obligation to re-assign (i.e. at best an equitable assignment rather than a legal assignment); and
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Crosstown took the copyrights free of that obligation (as it was not a party to the songwriter agreements) and was not subject to any relevant equities (as the cure notices were served after Crosstown concluded its agreement with Rive Droite). |
Giving the leading judgment of the Court of Appeal, Mummery LJ roundly rejected this contention on four grounds:
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since copyright arises under the CDPA (not under contract), common-law principles (along with the provisions of section 136 of the Law of Property Act 1925, which had been raised in support of Crosstown’s argument) are not relevant to the construction of the CDPA; |
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a partial assignment expiring on a contingent event is not prohibited by, and fits in with the ordinary meaning of, the words of section 90(2) of the CDPA;
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there are no good grounds of principle or policy for implying any restrictions on a copyright owner’s freedom to assign copyright; and |
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earlier authorities on section 90(2) (and on equivalent assignment provisions of the earlier Copyright Acts of 1911 and 1956) had treated assignments for periods of contingent duration as instances of a valid partial assignment of copyright. |
Since there was an automatic reversion (rather than a contractual obligation to re-assign), Mummery LJ declined to comment on the question of whether Crosstown took free of any equities. “Any place I needed to go”
Music has no frontiers. Certainly, Robert Plant captured that sense of universality in his 1973 tribute to the music of the world, The Song Remains The Same.
Copyright is, however, a territorial creature. A UK copyright is a different beast altogether from a US, German, French or Japanese copyright. This is widely misunderstood: a song is the same song no matter where it is performed – indeed, that is what makes music the only universal language. Yet the same song springs a whole host of copyrights into being in different countries around the world.
On the face of it, this could make it difficult for a publisher to acquire all of the worldwide copyrights in a song with any certainty. If a foreign copyright is a creature of national legislation, what is to prevent local law from failing to give effect to an English contract under which that local copyright was purportedly acquired? Naturally, a publisher (or indeed any other financier of creative content) cannot afford to indulge in such doubts, and will acquire rights on as widely worded a basis as possible. Accusations of “taking the first-born child” have – especially in the rapacious ”bad old days” of the music business – fallen only slightly short of the truth.
In this case, the Court of Appeal took a wholly pragmatic approach. If the contract is concluded under English law, confers exclusive jurisdiction on English courts and specifically assigns all rights in a song to the assignee throughout the universe, the assignment should be given precisely that effect before an English court, whether domestic or foreign copyrights are at issue. So, in this case, the reversion of copyright was binding on the parties, as well as the parties’ successors in title.
Crosstown argued that this conclusion is inconsistent with the Court of Appeal’s finding in the recent case of Lucasfilm Ltd v Ainsworth, 2 in which it was held that English courts cannot accept jurisdiction over claims for infringement of foreign, non-EU copyrights. In Lucasfilm, the court applied the so-called Moçambique rule: 4 as Jacob LJ put it, infringement of an intellectual property right is “essentially a local matter involving local policies and local public interest” and is “a matter for local judges”.
Mummery LJ, however, distinguished Lucasfilm: that case dealt with the acceptance of jurisdiction over copyright infringement, not ownership of copyright. The judge instead followed a decision (cited in Lucasfilm) in the case of Griggs v Evans, 5 in which it was held that English courts had jurisdiction to determine the ownership of foreign copyrights in the context of an English-law contract, having “always had an in personam jurisdiction to enforce a party properly before the court to perform an act required by English law”. Mummery LJ emphasised that his finding on jurisdiction turned on the interpretation of the contract at issue – one that dealt with copyright throughout the universe and expressly provided for English law as the applicable law and for the exclusive jurisdiction of the English courts.
So it appears that – at least in England and Wales – the same song can, in its various guises around the world, be governed effectively by a single contract. This is nothing new on a commercial level, but on a legal level, eloquently articulated by the Court of Appeal.
Or, as Robert Plant put it more poetically: “California sunlight, sweet Calcutta rain, Honolulu starbright – the song remains the same.“
Ed Baden-Powell
Article written for Entertainment Law Review.
1 Crosstown Music Company 1, LLC v Rive Droite Music Ltd & ors [2010] EWCA Civ 1222. In this article the term “song” is used as a convenient shorthand for the bundle of musical and literary copyrights comprised by a song.
2 Lucasfilm Ltd v Ainsworth [2009] EWCA Civ 1328 – the well-known case relating to Star Wars replica costumes.
3 Lucasfilm concerned the enforceability in England of a default judgment relating to US copyright. As such, the case did not deal with EU copyrights, for which English courts’ jurisdiction is governed by Council Regulation 44/2001 (known as the “Brussels Regulation”). Where contracting parties have made an express choice of jurisdiction (as in the Crosstown case), that choice is recognised under Article 23 of the Brussels Regulation. Accordingly, the Court of Appeal in the Crosstown case did not need to distinguish between EU and non-EU copyrights.
4 Derived from the case of British South Africa Company v Companhia de Moçambique [1893] AC 602.
5 [2004] EWHC 1088.
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