B4U Network (Europe) Ltd v Performing Right Society Ltd

Factual and Procedural Background

Two composers, referred to as the Composers, entered into written agreements on 9 June 2004 with the Respondent, a music rights collecting society, under which the Composers assigned to the Respondent all rights they owned or might acquire during membership. In 2008, the Composers were commissioned by a production company, Company A, to compose music for a film, including a specific song. Company A's commissioning agreement provided that copyright and related rights in the music would vest in Company A as first owner. Subsequently, a satellite television broadcaster, the Appellant, obtained rights to broadcast the song and did so in 2010. The Respondent claimed copyright infringement against the Appellant. At first instance, summary judgment was granted in favour of the Respondent. The dispute before this court concerns the ownership of copyright in the song and the priority of the assignments.

Legal Issues Presented

1. Whether the copyright in the song composed after the 2004 agreement falls within the scope of the rights assigned by the Composers to the Respondent under that agreement.
2. Whether the copyright vested in Company A immediately upon creation of the song by virtue of the commissioning agreement and section 91 of the Copyright, Designs and Patents Act 1988.
3. The proper construction of clause 2(a) of the 2004 agreement concerning assignment of future copyrights.
4. The interaction between sections 9, 11, and 91 of the 1988 Act and equitable assignment principles in determining ownership and priority of rights.

Arguments of the Parties

Appellant's Arguments

• The copyright in the song never belonged to the Composers because, under section 91(1) of the 1988 Act, the copyright vested immediately in Company A upon creation.
• Accordingly, the copyright fell outside the scope of the assignment to the Respondent since the Composers never owned the rights to the song.
• The construction of clause 2(a) should be assessed at the moment the copyright came into existence, and at that time the copyright was owned by Company A, not the Composers.
• The interpretation advanced by the Respondent would prevent professional musicians from undertaking commissions where copyright is assigned to clients, thereby conflicting with business common sense.

Respondent's Arguments

• The 2004 agreement operates as an immediate assignment of all future copyrights the Composers may own, taking priority over subsequent assignments.
• Under section 91 of the 1988 Act, legal and equitable title vests in the first assignee in time as soon as the copyright comes into existence.
• The Composers were prospective owners of the copyright at the time of the 2004 agreement, so the assignment took effect upon creation of the song.
• The assignment is consistent with established equitable principles and prior case law, and does not inhibit the Composers' ability to take commissions.

Table of Precedents Cited

Court's Reasoning and Analysis

The court analysed the nature of the assignment made by the Composers to the Respondent in 2004, focusing on clause 2(a) which assigned all rights they owned or might acquire during membership. The court emphasised that the assignment covered future rights the Composers might acquire, not only rights they owned at the time of creation of the song.

It considered the statutory framework under the Copyright, Designs and Patents Act 1988, particularly sections 9, 11, and 91. Section 11 establishes the author as the first owner of copyright, subject to exceptions not applicable here. Section 91 allows a written assignment of future copyright to vest legal and equitable title in the assignee immediately upon creation of the work.

The court rejected the Appellant's argument that the Composers never owned the copyright and thus could not assign it. Instead, the court accepted that the Composers were prospective owners at the time of the 2004 agreement, and that the assignment took effect upon creation of the song, vesting rights in the Respondent as the first assignee.

The court also noted equitable principles that protect the priority of the first assignee and prevent subsequent assignments from undermining prior equitable assignments. It found that the interpretation urged by the Appellant would lead to an absurd result, undermining the priority rules and the nature of equitable assignments.

Regarding commercial considerations, the court found no evidence that the Respondent's interpretation would impede musicians' ability to earn a living through commissions. The Respondent's longstanding practice and the structure of its agreements supported the interpretation given.

Holding and Implications

The court DISMISSED THE APPEAL.

The court held that the copyright in the song composed after the 2004 agreement was assigned to the Respondent as a future copyright under clause 2(a) of the membership agreement. Upon creation, the copyright vested in the Respondent by operation of section 91 of the Copyright, Designs and Patents Act 1988, giving it priority over the subsequent assignment to Company A.

The decision confirms the priority and effect of equitable assignments of future copyright under the statutory framework and reinforces that such assignments can include rights the assignor might acquire in the future. No broader precedent beyond the direct dispute between the parties was established.