Duran Duran’s loss of a recent High Court case emphasises the importance of taking foreign law advice when dealing with IP rights that exist outside the UK.
The ruling means that Duran Duran are unable to regain the US copyright for 37 songs, including “Rio”, “Hungry Like a Wolf” and “Is There Something I Should Know?” from music publishers Gloucester Place Music Limited.
The court held that Duran Duran were unable to terminate an assignment of the US copyrights in accordance with section 203 United States Copyright Act 1976 as the assignment agreements, entered into over 30 years ago, did not specify that they were subject to the right to terminate under the 1976 US statute.
s203 United States Copyright Act 1976 (the “Act”) provides:
- Conditions for Termination – In the case of any work other than a work made for hire, the exclusive or nonexclusive grant of a transfer or license of copyright or of any right under a copyright, executed by the author on or after January 1, 1978, otherwise than by will, is subject to termination under the following conditions:
- Termination of the grant may be effected at any time during a period of five years beginning at the end of thirty-five years from the date of execution of the grant; or, if the grant covers the right of publication of the work, the period begins at the end of thirty-five years from the date of publication of the work under the grant or at the end of forty years from the date of execution of the grant, whichever term ends earlier.
- The termination shall be effected by serving an advance notice in writing, signed by the number and proportion of owners of termination interests required under clauses (1) and (2) of this subsection, or by their duly authorized agents, upon the grantee or the grantee’s successor in title.
- Termination of the grant may be effected notwithstanding any agreement to the contrary, including an agreement to make a will or to make any future grant.
- Effect of Termination.—Upon the effective date of termination, all rights under this title that were covered by the terminated grants revert to the author
In 1980 and 1981, Duran Duran entered into agreements with Gloucester Place Music Limited (then Tritec Music Limited), owned by Sony/ATV Publishing, which assigned certain copyrights in songs written or composed by Duran Duran during a particular period in return for the payment of royalties.
The Act permits authors to terminate an assignment of US copyrights 35 years after the assignment by serving notice on the assignee. In 2014, Duran Duran served notices under the Act to terminate the assignments of the US copyright for the songs.
Gloucester Place Music Limited argued that serving such notice was in breach of the agreements entered into, as the agreements did not expressly reserve Duran Duran’s right to terminate the assignments of the US copyrights in accordance with the Act.
The Question Before the Court
The question before the Court was: as the agreements did not expressly reserve Duran Duran’s right to terminate the assignments of the US copyrights in accordance with the Act, was Duran Duran entitled to serve such notices and recover the copyrights or did the notices amount to breach of the agreements?
The Court considered, as it was obliged by English law to do, how a reasonable person having the relevant background knowledge would interpret the wording of the agreements. It held that a reasonable person would believe that Duran Duran and Gloucester Place Music Limited intended for the US copyrights to be assigned for their full term and that Duran Duran were prohibited from exercising their rights to terminate under the Act.
Therefore, it was held that Duran Duran had breached the agreements by serving the notices.
Lack of Evidence
Tragically for Duran Duran, the outcome may have been very different if better evidence had been provided to the Court. One of the arguments put forward by Duran Duran was that a US Court would find that the statutory termination right under the Act would take precedence over any contractual agreement. They relied upon a statement to that effect from a UK qualified solicitor. However, somewhat predictably, the Court held that the statement was inadmissible and irrelevant as:
- Duran Duran did not seek or obtain permission to adduce expert evidence as to US law;
- the solicitor who made the statement had no expertise in US law;
- there was no basis given for the statement; and
- there was no consideration of what US law was in the relevant period of 1980 to 1983.
If Duran Duran had sought and obtained permission to adduce expert evidence as to US law, then their argument could have been considered by the Court and the outcome for Duran Duran could have been different.
What does this ruling mean for artists like Duran Duran?
The answer to this question is clear: always take foreign law advice when dealing with foreign law rights. It can be detrimental to rely solely on advice from lawyers from one jurisdiction when the laws of another jurisdiction also apply.