In Costa v Dissociadid,(1) the Intellectual Property Enterprise Court (part of the High Court) considered questions of joint authorship of copyright. The judgment illustrates how important it is for parties making contributions to a project to agree in advance who owns the copyright in what or risk a dispute arising.
Dissociadid Ltd, the first defendant, was a company set up by Ms Chloe Wilkinson, the second defendant (together, the defendants). Ms Wilkinson had a condition known as dissociative identity disorder (DID), formerly known as multiple personality disorder. She set up a YouTube channel named "DissociaDID" (the channel) where she uploaded videos about DID and her own experiences of the condition with the aims of raising awareness and providing support to others with the condition. The channel was successful and by May 2021 it had surpassed one million subscribers. Ms Wilkinson began to monetise the channel and by 2020 her gross earnings were nearly £105,000.
In March 2020, the claimant, Mr Sergio Costa, contacted Ms Wilkinson and offered to help with her project. Various emails passed between them discussing this offer of assistance, including, in particular, an exchange on 16 June 2020. Between August and November 2020, Mr Costa and Ms Wilkinson collaborated in the creation of nine works to add to the channel. The first eight works consisted of content such as videos and scripts (the joint works). The ninth work was a disclaimer which was added to each piece of content on the channel to inform users that it was intended to be educational only and not a substitute for seeking professional medical advice on DID (the disclaimer).
By November 2020, the working relationship between Ms Wilkinson and Mr Costa had broken down. As a result, Mr Costa no longer wanted Ms Wilkinson to continue using the joint works and the disclaimer on the channel. Which of them owned the copyright in the joint works and the disclaimer therefore became a pertinent question. There was no dispute that the joint works were works of joint authorship in which both Ms Wilkinson and Mr Costa owned the copyright. The parties could not agree, however, on the ownership of the copyright in the disclaimer. Mr Costa argued that he was joint author of the disclaimer with Ms Wilkinson. Ms Wilkinson argued that Mr Costa's contribution to the drafting of the disclaimer did not amount to a collaboration with her sufficient to make him joint author of it.
Separately, Mr Costa submitted takedown requests to YouTube asking the platform to remove videos from the channel on the basis that he jointly owned the copyright in the content. YouTube complied with the request and various videos were removed. The defendants argued that these takedowns had caused loss to their business.
An additional point of dispute between Mr Costa and Ms Wilkinson was around the nature of their working relationship. Ms Wilkinson argued that a contract had been made between them by virtue of the email exchange on 16 June 2020 and prior to the creation of the joint works and the disclaimer. She alleged that this contract included implied terms pursuant to which Mr Costa had granted Ms Wilkinson (and her successors and assignees) a perpetual irrevocable licence to use any works they created together on the channel.
Mr Costa commenced proceedings against the defendants seeking an injunction to restrain them from infringing the copyright in the joint works and the disclaimer, and financial relief in the form of damages or an account of profits.
Ms Wilkinson counterclaimed that Mr Costa's submission of the takedown notices to YouTube was in breach of the contract between them and constituted unlawful interference in Ms Wilkinson's business. In response to the counterclaim, Mr Costa accepted that he had granted a bare licence to the defendants to use the joint works and the disclaimer but argued that he had terminated this licence in November 2020. He also denied the existence of a contract and that the takedown notices constituted unlawful interference.
The questions for consideration by the Court were:
- whether the disclaimer was a work of joint authorship;
- whether Mr Costa and Ms Wilkinson had entered into a contract on 16 June 2020;
- if there was a contract, whether it contained the implied terms alleged by Ms Wilkinson; and
- if there was no contract, what was the scope of the permission granted by Mr Costa to Ms Wilkinson to use the joint works?
Was the disclaimer a work of joint authorship?
The disclaimer was used in each piece of content on the channel and consisted of a paragraph of text stressing to users that the material was intended for educational purposes only and did not provide professional medical advice on DID. The evidence showed that Ms Wilkinson had drafted the disclaimer and that Mr Costa had merely added the phrase "and we make every effort to provide the most accurate and up-to-date information".
The judge referred to the Court of Appeal's judgment in the leading case on joint authorship of copyright of Kogan v Martin.(2) The key issue to be assessed was whether the joint working between Mr Costa and Ms Wilkinson had the nature of a true collaboration in that they had jointly undertaken to create the disclaimer with a common design as to its general outline and shared the labour of working it out.
After reviewing the judgment in Kogan in detail, the judge held that the collaboration element of joint authorship was missing in this case. Mr Costa did no more than "make a suggestion" to Ms Wilkinson to improve her work. The suggestion merely consisted of adding words that were commonplace in the context of disclaimers. The lack of genuine collaboration meant that the disclaimer could not be a work of joint authorship. Ms Wilkinson was the sole owner of the copyright in it.
Was there a contract between the parties?
The alleged contract was based on two short emails between Mr Costa and Ms Wilkinson on 16 June 2020. Mr Costa had written "if you need help with research, planning, writing, keeping tabs on things, etc, my offer still stands" to which Ms Wilkinson had replied saying "thank you, that would be a really big help . . . thank you for offering".
In the judge's view, Ms Wilkinson's response was likely to have been no more than a thank you for Mr Costa's offer and not an acceptance of it. Applying basic principles of contract law, therefore, there was no offer and acceptance (and so no contract).
Additionally, the judge was satisfied that Ms Wilkinson had provided no consideration (another legal requirement for a binding contract to be formed). The defendants argued that there was valid consideration on the basis that Ms Wilkinson had provided an indirect benefit to Mr Costa by allowing him to work with her on content for the channel, enabling him to "develop his CV" and obtain experience and publicity through his involvement in the DissociaDID project. The judge, however, rejected this argument, holding that Mr Costa had gained no professional advantage from working with Ms Wilkinson, and had never expected to.
In light of these findings, the judge held that no contract had been entered into on 16 June 2020 (or at all).
Although there was no contract and therefore no terms (express or implied), the judge went on to consider the hypothetical question of what terms would have been implied into the contract had it existed. The defendants' argument was that the contract would have included an implied term by which Mr Costa granted the defendants an irrevocable licence to use content jointly created by him with Ms Wilkinson in perpetuity. Commercially, had the contract existed, this issue would have been an important one as joint owners of copyright may only exploit (use) the works they have created together with the consent of the other copyright owners. Without Mr Costa's consent, therefore, the defendants would not have been entitled to use the joint works.
The judge emphasised that the courts should generally adopt a "minimalist" approach to implied terms and in light of that declined to find that the contract (had it existed) would have contained the implied licence the defendants alleged. He held that it had not been contemplated by Mr Costa or Ms Wilkinson on the date that the contract was said to have been made (16 June 2020) that Mr Costa would provide content for the channel. It was expected that Ms Wilkinson would merely review Mr Costa's advice and feedback before deciding whether to use her own content. On 16 June 2020, the parties had not contemplated the joint creation of works and only later did Ms Wilkinson consider it useful to incorporate some of Mr Costa's work into the content created by her to create the joint works.
It is clear that the courts will only imply terms into contracts where it is necessary to give business efficacy to the contract and obvious that the parties would have agreed to the term. These are assessed as at the time the contract is made and not subsequently with the benefit of hindsight. Given the judge's finding that the parties did not contemplate the joint creation of content on 16 June 2020, it followed that it would not be appropriate to imply a term granting a licence to use that content to the defendants. This would be an exercise in fashioning a term to reflect the merits of the situation as it later appeared and was not the correct approach to the implication of contractual terms. The judge held that no such term should be implied.
What was the scope of the permission granted by Mr Costa?
As the judge had found that there was no contract between the parties, it was necessary for the Court to explore the scope of the permission granted by Mr Costa to the defendants to use the joint works on the channel, and if and when that permission had been revoked. Given the absence of a contract, it was clear that the defendants had been using the joint works pursuant to a bare licence granted by Mr Costa arising out of the conduct of the parties.
Citing Mellor v Watkins,(3) the judge explained that bare licences are revocable at any time and will terminate after expiration of a reasonable period following clear notice of revocation having been given. The dispute between the parties was around when Mr Costa had given notice of revocation and what a reasonable period of notice should be.
The judge held that the letter of claim sent by Mr Costa's solicitors to Ms Wilkinson on 23 November 2020 alleging copyright infringement was sufficiently clear notification of termination of the bare licence. In terms of the notice period, it had taken the parties approximately four months to create the joint works and so a notice period of twice that (eight months) was reasonable in the circumstances.
Takedown notices and defendants' counterclaim
Ms Wilkinson's counterclaim for breach of contract was dismissed as the judge had held that there was no contract with Mr Costa.
The counterclaim for causing loss by unlawful means arose from Mr Costa submitting takedown requests to YouTube primarily on the basis that he was joint author of the disclaimer, this having been included in the video content on the channel. Mr Costa had told YouTube that he had not licensed the defendants to use the disclaimer and so the video content should be removed as it infringed his copyright. As a result, YouTube removed 49 videos from the channel. In the case of 46 of them, the videos themselves did not, in fact, include the disclaimer as the defendants had removed it. Mr Costa did not correct the representation he had already made to YouTube that the disclaimer was being used in these videos without his permission. The defendants alleged that these false representations resulted in Mr Costa causing loss to the defendants by unlawful means, in relation to which they were entitled to damages.
In summarising the essence of the tort of "causing loss by unlawful means", the judge cited the decision of the House of Lords in OBG Limited v Allan,(4) which was subsequently endorsed by the Supreme Court in Secretary of State for Health v Servier Laboratories Ltd.(5) The judge created a checklist of the elements of the tort and assessed whether each of those elements was made out on the facts of the case:
- Were there acts by Mr Costa against a third party in which the defendants had an economic interest? The judge was satisfied that Mr Costa had made takedown requests to YouTube, which was an organisation in which the defendants had an economic interest in that it hosted the channel through which the defendants ran their business.
- Were Mr Costa's acts in submitting the takedown requests actionable in law by YouTube? The judge held that they were because Mr Costa had made false representations to YouTube that he was the joint author of the disclaimer and that it was being used without his permission.
- Did Mr Costa's acts in submitting the takedown requests affect the freedom of YouTube to deal with the defendants? The judge said yes in that YouTube was unable to host some of the defendants' videos because of its (false) belief that they infringed Mr Costa's copyright.
- Did Mr Costa intend to cause loss to the defendants? The judge had "no doubt" that Mr Costa had wanted to cause harm to the defendants by videos "vanishing" in large numbers from the channel.
The judge was satisfied that on the facts all of the elements of the tort were made out and held that the defendants' counterclaim for causing loss by unlawful means succeeded.
A number of key lessons can be learned from this judgment:
- Parties should always consider joint ownership of copyright in works that may be created as part of a collaborative before the project gets underway. Recording in a written contract what has been agreed around copyright ownership, and other key obligations and rights in relation to the broader collaboration process, is key to avoiding costly, time-consuming and potentially reputation-damaging copyright infringement disputes arising later.
- Contracts can be created informally, orally or in writing. Although the judge in this case held that the parties' email exchange on 16 June 2020 did not result in a contract being formed, contracts can be entered into inadvertently. Parties negotiating on contributions to projects must take care what they say and ideally ensure that those negotiations are expressly subject to contract.
- Takedown requests are a quick and efficient way to deal with IP rights infringement in the online environment. However, those requests must be accurate around ownership of the IP rights forming the basis of the request, and kept up to date if circumstances change. Otherwise, the initial victim of an IP infringement could find themselves on the receiving end of a claim for causing loss by unlawful means (among other potential causes of action) in respect of which they may be liable to make financial recompense.
For further information on this topic please contact Gill Dennis or Nicole Boulis at Pinsent Masons by telephone (+44 20 7418 8250) or email ([email protected] or [email protected]). The Pinsent Masons website can be accessed at www.pinsentmasons.com.
Endnotes
(1) Sergio Mendes Costa v (1) Dissociadid Ltd (2) Chloe Wilkinson [2022] EWHC 1934 (IPEC).