Publications
European IP Bulletin, Issue 27, November - Copyright
Copyright
2. Campbell v MGN: Naomi Campbell Wins Again
Campbell v MGN Limited [2005] UKHL 61 is the latest appeal in the action brought by Naomi Campbell against the publishers of the Daily Mirror for breach of confidence over the publication of information relating to her treatment for drug addiction, which she claimed, breached her privacy.
Following a five-day trial in February 2002, Justice Morland awarded Campbell £3,500 in damages and costs. This decision was subsequently overturned in the Court of Appeal (which ordered Campbell to pay the costs of the trial and 80% of the costs of the appeal), but was then re-instated by the House of Lords, which ordered MGN to pay Campbell’s costs both in the Court of Appeal and the House of Lords. In addition, as Naomi Campbell’s solicitors and counsel conducted the appeal before the House of Lords under a Conditional Fee Agreement (“CFA”), a further claim for success fees in respect of those proceedings arose.
MGN sought a ruling from the House of Lords to the effect that they should not pay any part of the success fee on the basis that, in the circumstances of the case, such a liability was so disproportionate as to infringe their right of freedom of expression, as guaranteed by Article 10 of the European Convention on Human Rights (“the Convention”). They claimed that an award of costs increased by a success fee was disproportionate on the facts of the case, on the following grounds:
- The amount was greater than that which, under the ordinary assessment rules, a costs judge would consider reasonable and proportionate.
- It was not necessary, under Article 6 of the Convention, to provide legal assistance to Campbell since she could have afforded to fund her own costs (as she did at the trial and in the Court of Appeal).
The court dismissed MGN’s petition and held that both grounds on which MGN based their claim were flawed. In relation to MGN’s first ground, the court ruled that notwithstanding its potentially “chilling effect” on the media, the provision in the CFA regime for the existence of a success fee could not, as a matter of principle, be considered a disproportionate interference with the defendant’s Article 10 rights.
The second ground argued by MGN was considered by the court in greater detail. Lord Hoffmann stated that when one has to balance freedom of expression against other rights such as privacy or access to a court, there has to be an intense focus on the comparative importance of the specific rights being claimed in the individual case. He then went on to say that it was however desirable to have a general rule i.e. that CFAs are available to everyone in order to enable the scheme to work in a practical and effective way. It was thus concluded that the capacity, or otherwise, of a claimant to fund an action is immaterial.
This case is the first occasion where the House of Lords have considered the consequences of the CFA regime in respect of a claim relating to the freedom of expression, and affirms the compatibility of the CFA regime with the freedom of expression under Article 10 of the Convention.
3. English High Court Refuses Interim Order Barring Similar Art Work on CD Covers
The High Court judgment in GMG Radio Holdings Ltd & Ors v Tokyo Project Ltd & Anor [2005] EWHC 2188 (Ch) was given 14 October 2005.
The claimants sold compilation dance albums whose covers were decorated with pop art figures created by an in-house designer. One of the managers of the claimants left the business to start the defendant company, a rival compilation album business, and was soon joined by the designer. The new business the “Tokyo Project” sold their albums with a similar style of cover artwork. The claimant applied for interim injunction for passing off.
Justice Kitchin held that the style of the album cover was not sufficiently distinctive, as a number of different brand names illustrated dancing girls on album covers. Further, although in a survey conducted by the claimants the interviewees recognised the style of the artwork as similar to that used previously by the claimant, they were not actually confused as to the origin of the products. Also, the further delay that would be caused by an injunction would have caused a total failure of the defendants’ business. Since the claimants would have had considerable difficulty to establish sufficient damage to their business, the balance of convenience came down in favour of not granting the injunction.
This case illustrates the limitations of the rights under passing off in cases of similar works originating from the same artist. It also underlines the importance of ensuring that restrictive covenants suitable to protect the legitimate business interests of the company are considered for creative or technical personnel and not just for senior management.4. Online Management of Music rights: the Commission’s Recommendation
The European Commission’s Recommendation on collective cross-border management of copyright and related rights for legitimate online music services, was released on 18 October 2005, as a result of the intense discussions that recently took place on the topic of collective administration of music rights, with particular emphasis on exploitation through the internet. The discussion was encouraged by the Commission with the release of an initial Communication on 16 April 2004, which launched the first consultation, and a further Study (on 7 July 2005) that provided the basis for a second consultation.
The Recommendation provides guidelines to Member States as to how to face the demand for pan-European licenses. The Commission, decided to focus on online licensing of musical works, as, it is over internet that radical changes to the way licenses are granted are the most urgently required. In order to facilitate this pan-European licensing, Member States need to provide a framework which allows the rights holders to entrust their rights to a suitable collecting society that can cover most or all of the relevant jurisdictions.
Following this approach, European collecting societies will lose their previous de facto or de iure monopolies. Moreover, new collective managing bodies will probably emerge. Member States are being recommended to provide the instruments to facilitate enhancement of transparency and accountability of both existing and new collective management bodies, with particular attention to royalty distribution and deductions in relation to administrative fees and social or cultural funds. It is hoped that this will reduce allegations of discrimination against rights holders on the basis of nationality or the category of rights to be managed. The Commission insists there is a need to respect the widely recognised principle of national treatment especially in the distribution of royalties to foreign right holders.
The Recommendation suggests Member States provide right holders with the power to determine the online rights to be entrusted for collective management, the territorial scope of the mandate, and their withdrawal, upon reasonable notice, from the collecting societies. Clearly, if the Recommendation is fully adopted at a national level, the administrative bodies responsible for collecting royalties will be required to disclose more information benefiting both the rights holders and users. They will also have to provide regular updates on the repertoires they represent which would be in balancing the interests of rights holders, collecting societies and users the establishment of instruments for dispute settlement.
The Recommendation provides answers to some of the issues raised in the response to the second consultation, especially those relating to online exploitation. Unfortunately, the Recommendation does not solve the problem, perceived by a great proportion of stakeholders involved in both consultations, that if collective managers provide pan-European licenses in the form proposed by the Commission, they could actually become subsidiary bodies for large rights holders. At present, the Recommendation seeks to attribute higher bargaining power to rights holders on the one hand, while on the other it risks providing the grounds for transforming national monopolies into an European oligopoly, without solving the problem of competition in collective administration. This structure can only work if the benefits of the new scenario outweigh its costs.
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