The Times Newspaper may have to pay damages of up to £150,000 after a ruling by the High Court that it infringed the copyright in recordings of, and the performers’ rights in relation to performances at a 1969 Jimi Hendrix concert. Around 1.3 million copies of a CD, which contained 10 tracks from a live performance by the Jimi Hendrix Experience at the Royal Albert Hall in 1969, were given away with The Sunday Times newspaper in September 2006.
The performers’ rights in relation to the concert and the copyright in the recordings of the concert were held by two US companies, Experience Hendrix and Last Experience (the “Claimants”), who commenced proceedings against The Times for infringement of copyright and performers’ right.
The Times believed that it had obtained the necessary licence to make and distribute the CD, as it had obtained a licence of the recordings from a company called Charly Acquisitions Ltd. However, the High Court found that the licence was invalid, as Charly Acquisitions Ltd did not have good title to the rights and it gave summary judgement in favour of the Claimants. The Claimants elected to pursue an inquiry for damages and the High Court recently gave judgement on this.
The Claimants had been due to release the footage of the concert as a film accompanied by DVDs and CDs and they claimed that they had to put this project on hold because of the CD which The Sunday Times had given away for free. The Claimants therefore argued that they should be awarded damages for their loss of earnings in relation to the delay of their project. The Claimants also argued that their claim for damages should not be confined to their losses suffered in the UK but should extend to losses suffered worldwide.
The Times, however, argued that any damages awarded to the Claimants should be assessed by reference to the fee that the Claimants could legitimately have charged in September 2006 for a notional licence to allow The Times to make and issue the CD.
The High Court agreed with the arguments of the Claimants and held that damages should be assessed on the loss-sustained approach. The High Court’s reasoning as to its decision to measure the damages on the loss-sustained approach as opposed to the notional licence fee was based on the fact that the Claimants were engaged in the project and that their decision to suspend the project was caused by the distribution of the CD by The Times. The infringement had delayed the Claimants’ project by 12 months and therefore delayed the Claimants’ receipt of earnings from the project. It further held that it would have been difficult to assess the reasonable licence fee which the Claimants could have charged The Times to allow it to distribute the CD, as the Claimants would not have allowed this distribution given their own project.
The High Court rejected the Claimants’ argument that they were entitled to additional damages. Additional damages can be awarded by a court if it considers the justice of the case requires this, having regard to all the circumstances. The High Court held that additional damages for flagrant infringement or moral prejudice were not appropriate in this case, as it did not consider that The Times had been indifferent or recklessly indifferent as to whether it was infringing the Claimants’ rights. The Times had acted responsibly, having taken what it believed to be the appropriate steps to obtain the necessary permissions.
The High Court accepted the Claimants’ argument that the Claimants could recover, in principle, losses in both the UK and abroad which were caused by The Times’ infringement of their UK intellectual property rights. There was no authority which indicated that damages for infringement of copyright or of performers’ rights were limited to damage suffered within the territorial jurisdiction of the High Court. The High Court in assessing the sum of the damages to be awarded concluded that it was impossible to forecast what the box-office takings would be for a film which is yet to be released and it would be guesswork to project the unit sales of DVDs and CDs as well as the income from ringtones, television, radio and merchandise. The High Court turned to offers of advances from Sony and Universal to assess the minimum amount of profit that the Claimants potentially could have made from the distribution of the film, DVDs and CDs. From that, the High Court held that the infringement by The Times had caused the Claimants to be deprived of $5.8 million for a period of 12 months and it ordered The Times to pay damages equivalent to the US rate of interest plus 1% on $5.8 million for the period of 12 months.
This is an interesting case, as it gives insight into the considerations which the courts will take into account when assessing the award of additional damages. This case also serves as a useful reminder that although infringement of intellectual property rights takes place in the UK, an award of damages can include damages for losses suffered outside the UK where the claimant can show that the loss was caused by the defendant’s wrongdoing.
Finally, licences should be carefully drafted to include a warranty from the licensor that it is able to grant the licensed rights as this can help to protect licensees, such as The Times, in difficult situations like this by providing licensees with recourse against unscrupulous or negligent licensors.