A recent Court of Appeal decision relating to the transfer of copyright and related rights in works written by Bob Marley confirms that the High Court correctly applied the principles of interpretation of contracts that have been developed through a well-known series of cases and held that the agreement under consideration did effectively transfer the works that were in dispute. 

Business Impact

The decision in BSI Enterprises Ltd and Cayman Music Ltd V Blue Mountain Music Ltd [2015] EWCA Civ 1151 provides a good illustration of the importance of careful and considered wording when drafting intellectual property agreements. Without clear wording there may be room for dispute between the parties over the effect of the agreement which will, if litigated, be decided by the court applying established principles of contract interpretation. 

The court will determine the parties' intention and agreement from the document entered into by them rather than consider their intention and agreement from surrounding circumstances. In the absence of any express exclusion or inclusion the court will determine the position by considering the language used by the parties in the relevant agreement. Transfers and licences of intellectual property rights governed by English law will be construed in accordance with the well-established rules that apply to the interpretation of any contract under English law.

Tips

  • If assets are to be specifically excluded from or be subject to the terms of an agreement then refer expressly to such assets. 
  • Always use consistent language for the same concept through the document.
  • Define terms distinctly and separately – avoid defining a term within another definition.

Background

Bob Marley entered in to a series of agreements relating to the copyright in musical works written and/or recorded by him. The dispute related to the ownership of copyright in 13 songs ("theWorks") that included "No Woman No Cry".

The ownership of the copyright in the Works depended on the interpretation of an agreement made in March 1992 between Cayman Music Inc ("CMI") and Island Logic Limited ("Island") under which copyright in Bob Marley works was assigned to Island ("March 1992 Agreement"). The issue was whether the Works were included in the assignment.

For the purposes of the proceedings the parties agreed that CMI owned the copyright in the Works at the date of the March 1992 Agreement although this had been disputed previously. The reason for the earlier dispute over ownership of copyright in the Works arose as a result of Bob Marley deliberately misattributing the authorship of the Works to various friends in order that the Works did not fall within the scope of an earlier publishing agreement that Bob Marley had entered into with CMI. In this way Bob Marley retained control over the Works (and CMI did not receive any royalties). 

Following Bob Marley's death in 1981, Chris Blackwell, the "moving spirit" behind Island, sought (with Bob Marley's estate) to acquire all the rights including copyright and publishing rights in the Bob Marley's works. Blackwell became aware that CMI was selling its rights in the Bob Marely works that CMI had acquired from Bob Marley under earlier publishing agreements. CMI and Island therefore entered into the March 1992 Agreement. 

In 2008 CMI purported to sell the copyright in the Works to the First Claimant. That sale had been prompted by a statement made by Blackwell, in unrelated legal proceedings relating to 6 of the Works, that they were not included in the March 1992 Agreement. Blackwell subsequently retracted that statement. The current proceedings were brought by the First Claimant for a declaration that it was the owner of the copyright in the Works. The issue was therefore whether the March 1992 Agreement applied to the Works.

The March 1992 Agreement

Even though the March 1992 Agreement was "lengthy and carefully negotiated with expert input", the Court of Appeal agreed with the first instance judge that the agreement was "rather scrappy". The Defendant argued that the definition in the agreement of "Composition" and "Catalogue" included the Works. The key elements of that definition are as follows:

" "Composition" and "Catalogue". The term "Catalogue" shall mean all presently-existing musical compositions.... consisting of lyrics and/or music... written recorded by Robert N. Marley...., Winston Peter McIntosh and/or Neville Livingstone.....under their own names or under any pseudonyms, individually or as part of any collaboration between or among any of them or others (individually a "Composition" and collectively the "Compositions") and all right, title and interest in and to such Compositions, including all copyrights and renewals and extensions of copyrights thereto in all jurisdictions throughout the Universe.... including, but not by way of limitation, the Catalogue listed on Schedule 2 attached hereto...."

The Court of Appeal referred to the principles of contract contraction under English law, as discussed in many cases including the often cited Investors Compensation Scheme Ltd v West Bromwich Building Society [1988],  which had been referred to by the first instance judge and summarised the correct approach to interpretation as follows:

"The object is to determine what the parties meant by the language they used in the contract. This involves ascertaining the meaning which the language would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract, that is to say the matrix of fact. The admissible background includes everything which would have affected the way in which the language of the contract would have been understood by a reasonable person but it excludes the previous negotiations of the parties and their declarations of subjective intent."

At first instance the claimants argued that the definition of Compositions included those listed in Schedule 2 and any unknown Bob Marley songs  but did not include the Works on the basis that there was no express mention of the Works either in this definition or in warranties given by the CMI in the agreement and that the parties had agreed that, for the purposes of the March 1992 Agreement, the Works did not belong to CMI. However, the court found that such an agreement was not apparent from the language used in the agreement itself. The judge was required to interpret the words used by the parties in the light of the factual matrix.

The judge considered that since it was clear that Island wanted to acquire as complete a portfolio of rights in all Bob Marley's works and CMI's best chance of resolving the issue over ownership of the Works was with Island,  it would have made no commercial sense for the parties to omit the Works without expressly referring to their exclusion.  The judge held that the Works were included within the assignment to Island.

The claimants appealed and sought to put forward a new case. The Court of Appeal permitted this and the claimants submitted that the definition headed ""Composition" and "Catalogue"" did not actually define Composition but rather the scope of that term was to be found in the wording of a warranty that Schedule 2 contained a complete and accurate list of all the Compositions. This wording meant that only the Compositions listed in Schedule 2 were transferred under the March 1992 Agreement. The claimants also contended that if the Works were intended to be included then they would have been expressly mentioned in the agreement.

Notwithstanding these further submissions, the Court of Appeal upheld the decision of the lower court and rejected the claimants' arguments. The Court of Appeal considered that the words "individually a Composition or collectively the "Compositions", even though appearing in the middle of the clause clearly signified that all of the works falling within the scope of the preceding words were Compositions and those proceeding words encompassed the Works.

The Court of Appeal confirmed that the first instance judge had directed himself properly as to the relevant rules to apply when construing the agreement and that the intention of the parties was to be determined objectively. The meaning of the agreement had to be determined from the written document having regard to the factual matrix that applied when the agreement was entered into. The factual matrix included the fact that there were likely to be works created by Bob Marley that were not specifically identified in the agreement and Island was seeking to acquire relevant rights in all of Bob Marley's works so far as was possible (including from his estate). The Court of Appeal confirmed the judge's view that it would not have made sense to exclude the Works from the March 1992 Agreement and to leave a position of uncertainty in relation to the rights in the Works.

The Court of Appeal unanimously concluded that it was clear that the Works were Compositions covered by the March 1992 Agreement because they were owned by CMI and fell within the definition of "Compositions" and therefore were transferred to Island under the agreement.