|
Digital technology is forcing copyright owners to look at the wording of licence agreements more closely to check their meaning.
A recent case – Excelsior Group Productions Ltd v Yorkshire Television Ltd 1 – raised the question of whether digital transmission could attract payment on the same basis as a network transmission when, at the time the contracts were made (in the 1990s), digital transmission could not have been in the contemplation of the parties.
There is nothing surprising in this: whenever technology presents new potential revenue streams, copyright owners look carefully to see who will benefit. When video cassettes, and then DVDs, emerged, there was panic as film owners wondered if they had unwittingly sold the family silver as a result of weasel words in contracts along the lines of “all media now known or later invented”.
The Excelsior case serves as a timely reminder of the rules applied by courts to the construction of contracts, particularly as digital technology continues to shred the analogue business models that have governed the media industries for years.
The contracts concerned “The Darling Buds of May”, “A Touch of Frost” and “Uncle Silas”. They were made respectively in 1990, 1992 and 1999.
The issue in the case was whether transmissions on the digital channels on ITV2 and ITV3 attracted flat fees per broadcast hour, or a royalty of 8% of adjusted gross income. This depended on whether the digital transmission fell to be treated under the contracts as:
| (a) |
a repeat “from all the transmitters of the Independent Television Network” – which attracted an hourly fee; or
|
| (b) |
“exploitation … by any other method or means within the United Kingdom and/or in any and all media now known or hereinafter devised in overseas territories” – which attracted a royalty. |
The judge reached the latter conclusion, considering several principles of construction:
| (i) |
The words in the contracts should be given the meaning they bore at the time the contract was made – although he conceded that it is possible to use words or phrases that might cover a concept not yet in existence. So the present structure of independent television could not be part of the factual background at the time the contracts were made.
|
| (ii) |
The judge should have regard to the background knowledge reasonably available to the parties at the time the contracts were made – disregarding pre-contractual negotiations, the subjective intentions of the parties and their subsequent conduct. This follows the rule confirmed by the House of Lords in Chartbrook Ltd v Persimmon Homes Ltd. 2 |
One conclusion to be drawn is that, since copyright lasts for a long time, it may be unwise to use specific technical terms and references to specific entities.
Now might be a good time to review your contracts. When the analogue signal is switched off in 2012, it may be too late.
1 [2009] EWHC 751.
2 [2009] UKHL 38.
Nigel Bennett
325
Simkins' early warning bulletins are for general guidance only. Legal advice should be sought before taking action in relation to specific matters. Where reference is made to Court decisions facts referred to are those reported as found by the Court. Please note that past bulletins included in the Archive have not been updated by any subsequent changes in statute or case law.
<< back to articles & bulletins
|