United Kingdom Copyright Decisions 2018
50(3) IIC 352 (2019)
1 March 2019
International Review of Intellectual Property and Competition Law > 2019 - Volume 50 > Issue
3, 1 March > Articles
International Review of Intellectual Property and Competition Law
Report
Yin Harn Lee
Ph.D. (Cambridge); Lecturer at the School of Law, University of Sheffield, Sheffield, UK
e-mail: yin.lee@sheffield.ac.uk
© Max Planck Institute for Intellectual Property and Competition Law 2019
Abstract: This report highlights the main UK copyright decisions in 2018, which relate to blocking injunctions as
applied to live streaming servers; the nature of the additional damages which courts have the discretion to award
under Sec. 97(2) of the CDPA; the jurisdiction of the Copyright Tribunal established under Chapter VIII of the
CDPA; ownership of copyright and joint authorship of copyright works; and authorisation of copyright infringement.
Keywords: Additional damages Authorisation Authorship Blocking orders Broadcasts Collecting societies
Communication to the public Copyright Copyright ownership Copyright Tribunal Damages
Intellectual Property and Competition Law
Legislation Copyright Act 1956 (UK); Copyright, Designs and Patents Act 1988 (UK); European Collective Rights
Management Directive 2014/26/EU; European Enforcement Directive 2004/48/EC.
Cases Absolute Lofts South West London Ltd v. Artisan Home Improvements Ltd [2015] EWHC 2632 (IPEC);
British Broadcasting Corporation v. Mechanical-Copyright Protection Society Ltd [2018] EWHC 2931 (Ch); CBS
Songs Ltd v. Amstrad Consumer Electronics plc [1988] AC 1013; Chadwick v. Lypiatt Studio Ltd [2018] EWHC
1986 (Ch); Football Association Premier League Ltd v. British Telecommunications plc [2017] EWHC 480 (Ch);
Football Association Premier League Ltd v. British Telecommunications plc [2018] EWHC 1828 (Ch); Matchroom
Boxing Ltd v. British Telecommunications plc [2018] EWHC 2443 (Ch); Martin v. Kogan [2018] FSR 9; Mei Fields
Designs Ltd v. Saffron Cards and
50(3) IIC 352 (2019) at 353
Gifts Ltd [2018] EWHC 1332; Phonographic Performance Ltd v. Balgun (t/ a Mama Africa) [2018] EWHC 1327 (Ch);
Phonographic Performance Ltd v. CGK Trading Ltd [2016] EWHC 2642 (Ch); Phonographic Performance Ltd v.
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Ellis (t/a Bla Bla Bar) [2018] EWCA Civ 2812; Queensberry Promotions Ltd v. British Telecommunications plc
[2018] EWHC 3273 (Ch); R (on the application of Al-Skeini) v. Secretary of State for Defence [2007] UKHL 26.
1 Blocking Injunctions
This report highlights a number of UK copyright decisions from the previous year that may be of interest to
comparative lawyers. Three of these cases represent the latest developments in efforts made by professional
sporting bodies to prevent the unauthorised live streaming of their broadcasts over the Internet. In 2017, the
governing body of the Barclays Premier League (“FAPL”) had succeeded in obtaining an injunction under Sec. 97A
of the Copyright, Designs and Patents Act 1988 (“CDPA”) to compel the six main retail Internet service providers
(“ISPs”) in the UK to block their customers' access to servers which delivered live streams of Premier League
footage. 1 The injunction was granted subject to a number of qualifications, the most pertinent being: (i) it would
have effect only until the end of the Premier League season for that year; and (ii) weekly notices would be sent to
the hosting providers whose servers were subject to blocking. In Football Association Premier League Ltd v. British
Telecommunications plc (“FAPL v. BT”), 2 FAPL sought to extend the operation of the injunction for a further
Premier League season, with the following variations: (i) an enlargement of the subset of streaming servers to be
blocked; and (ii) the requirement to notify hosting providers to be subject to a short delay, in order to prevent
attempts at circumventing the order. In a straightforward judgment, the injunction was granted by Arnold J, for
essentially the same reasons as those given in the 2017 decision on the same issue.
In Matchroom Boxing Ltd v. British Telecommunications plc,3 the claimant sought a blocking injunction very similar
in its terms to the injunction obtained in FAPL v. BT, in order to prevent the unauthorised live streaming of
professional boxing matches staged by it. Given the nature of the sporting events involved, the injunction sought
here differed from that granted in FAPL v. BT in two main respects. First, the irregular timing of the boxing matches
meant that the target servers had to be identified through a particular form of monitoring carried out over a sevenday period prior to each match. Second, although the injunction sought was for a two-year period, the dates of each
match – unlike Premier League football matches – were not fixed sufficiently far in advance; accordingly, the order
contained a provision for the ISPs to be given notification at least four weeks in advance of each scheduled match.
Given the facts of the case and their similarities to those of FAPL v. BT, Arnold J had little difficulty
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concluding that the injunction sought was proportionate, for essentially the same reasons as those applicable in
FAPL v. BT. In a brief and straightforward passage, his Lordship held that: (i) the injunction sought did not impair
the rights of the ISPs to carry on business; (ii) to the limited extent that it interfered with the rights of Internet users
to impart or receive information, the interference was justified by the legitimate aim of preventing the infringement of
the claimant's rights on a large scale; (iii) it would be effective and dissuasive; (iv) no equally effective but less
onerous measures were available to the claimant; (v) it would avoid creating barriers to legitimate trade; (vi) it was
not unduly complicated or costly; and (vii) it contained safeguards against misuse. Accordingly, the injunction was
granted on the terms sought.
A similar blocking injunction was sought and granted in Queensberry Promotions Ltd v. British Telecommunications
plc,4 also in relation to the unauthorised live streaming of professional boxing matches staged by the claimant. The
facts of this case, however, did raise an issue as to whether the claimant was an entity with the right to make such
an application pursuant to Sec. 97A of the CDPA. The claimant had entered into an agreement with Showtime
Networks Inc (“SNI”), a third-party broadcaster, under which SNI would make and transmit broadcasts of such of
the claimant's boxing matches as were to take place in the US. Under the terms of the agreement, SNI would retain
ownership of the copyright subsisting in those broadcasts; however, the claimant was granted an “exclusive licence”
of the right to make applications under Sec. 97A of the CDPA in relation to the broadcasts. Section 97A states that
the High Court “shall have power to grant an injunction against a service provider, where that service provider has
actual knowledge of another person using their service to infringe copyright”, but does not specify the identity of the
party who may apply for such an injunction.
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Arnold J, interpreting that provision, held that it was consistent with the overall scheme of the CDPA for both owners
and exclusive licensees of copyright to be entitled to apply for the injunction provided for under Sec. 97A. In his
Lordship's view, this interpretation was also supported by Art. 4 of the Enforcement Directive, which requires
Member States to recognise both the owners of intellectual property rights and “all other persons authorised to use
those rights, in particular licensees” as persons entitled to the benefit of the remedies provided for under the
Directive. The case thus turned on whether the claimant was an “exclusive licensee” within the meaning of the
CDPA. Section 92(1) of the CDPA defines “exclusive licence” as “a licence in writing signed by or on behalf of the
copyright owner authorising the licensee to the exclusion of all other persons … to exercise a right which would
otherwise be exercisable exclusively by the copyright owner”. Arnold J, applying this provision, held that the
“exclusive licence” which the claimant had received from SNI under the agreement was not an exclusive licence
within the meaning of Sec. 92(1). This was because it pertained only to the right to make applications under Sec.
97A, rather than the right to engage in any activity which the copyright owner would otherwise be exclusively
entitled to do. His Lordship emphasised that “section 97A does not confer an exclusive right to do anything, but
provides a remedy”. Accordingly, the claimant had no standing to make an application pursuant to Sec. 97A. The
issue was subsequently resolved, however, when the claimant received an
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assignment of the right to bring the present proceedings from SNI. This, in Arnold J's view, gave the claimant
sufficient standing to make the application sought, because it was an assignment by SNI, the copyright owner, of its
cause of action under Sec. 97A.
2 Additional Damages
The case of Phonographic Performance Ltd v. Ellis (t/a Bla Bla Bar)5 required the Court of Appeal to consider the
nature of the additional damages which courts have discretion to award under Sec. 97(2) of the CDPA, as well as
the circumstances under which such an award would be appropriate. Section 97(2) provides that:
The court may in an action for infringement of copyright having regard to all the circumstances, and in particular to:
(a) the flagrancy of the infringement; and
(b) any benefit accruing to the defendant by reason of the infringement, award such additional damages as the justice
of the case may require.
This case was an appeal from the decision of Birss J at the High Court, against his Lordship's refusal to award
additional damages following his imposition of a suspended prison sentence on the defendant for breach of an
injunction previously granted to restrain copyright infringement by the unlicensed playing of recorded music on the
defendant's business premises. Birss J's refusal was founded on the principle that a court should not fine a
contemnor at the same time as imposing a suspended custodial sentence. One question which arose, therefore,
was whether an award of additional damages under Sec. 97(2) of the CDPA should be regarded as being
compensatory, punitive or restitutionary in nature. The Court of Appeal engaged in an extensive review of the
legislative history of the provision and the case law surrounding it. It concluded that an award of additional damages
made pursuant to it might be characterised as wholly or partly punitive, or wholly or partly restitutionary, depending
on the circumstances. The Court of Appeal also added, however, that it would be preferable not to shoehorn these
damages into existing general legal taxonomy, and instead to treat them simply as being a form of damages
authorised by statute and therefore sui generis in character.
Turning to the decision of Birss J in the court below, the Court of Appeal took the view that, while an award of
additional damages under Sec. 97(2) might be analogised to the imposition of a fine, it could not be treated as
being factually equivalent to a fine. Among other things, additional damages were payable to the claimant rather
than the state, which a fine would be. The Court of Appeal also agreed that the award of additional damages
provided for under Sec. 97(2) was not precluded by the provisions of the Enforcement Directive insofar as such an
United Kingdom Copyright Decisions 2018
award was more favourable to the rightholder, adopting the position set out in the earlier case of Absolute Lofts
South West London Ltd v. Artisan Home Improvements Ltd.6
50(3) IIC 352 (2019) at 356
It did caution, however, that a particularly egregious award of exemplary damages might amount to a prohibited
abuse of rights under the Directive, Art. 3(2) of which requires remedies to be applied “in such a manner as to …
provide for safeguards against their abuse”.
To determine whether it would be appropriate to make an award of additional damages in conjunction with a
custodial sentence, the Court of Appeal had regard to the case law dealing with the relationship between awards of
punitive damages in civil law claims and criminal punishment arising out of the same facts. After surveying the case
law, it concluded that the mere fact that a person had been imprisoned did not preclude a court from awarding
punitive damages against them in a civil action arising from the same facts. However, where the criminal
punishment was itself financial, such as a fine, both the criminal and civil courts should take care to ensure that the
defendant did not pay twice for the same damage. The fact that a defendant had been fined, therefore, might lead a
court to decline to award punitive damages. Accordingly, the Court of Appeal concluded that an award of additional
damages could be combined with a suspended custodial sentence in an appropriate case. On the facts before it,
however, the Court of Appeal held that this was not such a case. This was because the defendant's breach of the
injunction was unintentional, and had arisen out of a misunderstanding on his part concerning the circumstances.
As a consequence, the Court of Appeal was not persuaded that this was a “flagrant” infringement within the
meaning of Sec. 97(2) of the CDPA, nor was it prepared to accept the proposition that any infringement which took
place in breach of a court order must, by definition, be “flagrant”.
3 Copyright Tribunal
In British Broadcasting Corporation v. Mechanical-Copyright Protection Society Ltd,7 the High Court had occasion to
consider the jurisdiction of the Copyright Tribunal, which was established under Chapter VIII of the CDPA to review
licences and licensing schemes operated by collecting societies. At issue was the extent of the Copyright Tribunal's
jurisdiction to set the terms of such licences insofar as they concerned copyrights subsisting under the laws of
jurisdictions other than the UK. The case was heard by Arnold J, who held, upon a close reading of the relevant
statutory provisions, that the jurisdiction of the Copyright Tribunal was confined to licensing schemes relating to
copyrights subsisting under the laws of the UK. The starting point for this conclusion was Sec. 116(1) of the CDPA,
which defines “licensing schemes” falling with the jurisdiction of the Copyright Tribunal by reference to the concept
of “copyright licences”. “Copyright licences” are, in turn, defined in Sec. 116(3) as “licences to do, or authorise the
doing of, any of the acts restricted by copyright”. The concept of “acts restricted by copyright”, meanwhile, is defined
in Sec. 16(1) of the CDPA as being limited to acts carried out in the UK.
Arnold J also agreed with the defendant collecting societies that the presumption against extraterritoriality meant
that the CDPA should be presumed not to regulate
50(3) IIC 352 (2019) at 357
matters outside the UK unless it was displaced by a contrary intention.8 In his Lordship's view, there was nothing in
the language, object, subject matter or history of the CDPA to displace this presumption. His Lordship also held that
the presumption against territoriality was not affected by the provisions of the Collective Rights Management
Directive which were cited to him by the claimant, namely Arts. 23, 34(2) and 35(1). Article 23 requires Member
States to ensure that collective management organisations established within their territory comply with the
requirements of Title III of the Directive when granting multi-territorial licences for online rights in musical works; Art.
34(2) requires Member States to ensure that certain types of disputes “relating to a collective management
organisation established in their territory which grants or offers to grant multi-territorial licences for online rights in
musical works” be submitted to an independent and impartial alternative dispute resolution procedure; and Art.
35(1) requires Member States to ensure that disputes between collective management organisations and users
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“concerning … existing and proposed licensing conditions or a breach of contract can be submitted to a court, or if
appropriate, to another independent and impartial dispute resolution body where that body has expertise in
intellectual property law”. As Arnold J pointed out, however, there was nothing in any of these provisions which
required the jurisdiction of the Copyright Tribunal to be extended to licences of foreign copyrights. In doing so,
Arnold J also made reference to two important points that had been made by the Copyright Tribunal itself in one of
its earlier decisions. The first of these was that the Tribunal was a specialist tribunal whose expertise lay in the field
of UK copyright, and did not possess any expertise in relation to foreign copyrights. The second was that the
regulation of licences and licensing schemes offered by licensing bodies should be a matter for the law and policy
of each individual state in which copyright subsists. As a matter of comity, therefore, a UK statutory tribunal should
be slow to interfere with the regulation of copyright licences and licensing schemes in other jurisdictions, particularly
in the absence of a clear statutory mandate.
Arnold J did acknowledge, however, that as a matter of practicality, it might be difficult in some cases to
disaggregate licences relating to UK copyrights from those relating to foreign copyrights. In some circumstances,
therefore, the Copyright Tribunal might have the power to make an order in respect of the whole of a licence which
covered both UK and foreign copyrights, particularly if the licence related predominantly to UK copyrights and had
only an incidental effect on foreign copyrights. This would not be the case, however, with a licence that covered
predominantly foreign copyrights with only a small UK element.
4 Authorisation
The case of Phonographic Performance Ltd v. Balgun (t/a Mama Africa) 9 called for the application of the principles
relating to liability for the authorisation of
50(3) IIC 352 (2019) at 358
copyright infringement. Under Sec. 16(2) of the CDPA, a defendant will incur liability not only where they carry out
an act which falls within the exclusive purview of the copyright owner, but also where they “authorise” the doing of
such an act by a third party. It is on this basis that courts in the UK have imposed liability on defendants who have
enabled or facilitated copyright infringement. In this case, the claimant collecting society argued that the defendant,
in permitting DJs to play music at his restaurant, had authorised the infringing public performance of two songs in
which the claimant held the relevant rights. While it was not disputed that at least two of the songs played by the
DJs did infringe the claimant's copyrights, it was the defendant's contention that, while he might have facilitated
copyright infringement in allowing the DJs to perform in his restaurant, his conduct still fell short of authorising that
infringement. In doing so, he relied on the leading authority on the concept of “authorisation” in the UK, CBS Songs
Ltd v. Amstrad Consumer Electronics plc (“Amstrad”). 10 Here, the House of Lords had defined the term restrictively
as meaning “a grant or purported grant, which may be express or implied, of the right to do the act complained of”.
On this basis, it was held that the manufacture and sale of a twin-tape recorder did not amount to an authorisation
of any acts of copying that might subsequently be carried out by individuals who had purchased the recorder.
The defendant's argument on this point was rejected by Penelope Reed QC (sitting as a Deputy Judge of the High
Court). In doing so, the judge made reference to the earlier case of Phonographic Performance Ltd v. CGK Trading
Ltd,11 where the owner of a nightclub was held to have authorised the infringing performance of songs played by the
DJs and performers whom she had invited to perform at her premises. This was notwithstanding the fact that the
songs in question had been selected by the DJs and performers themselves, and that the nightclub owner had not
selected or authorised any specific songs to be played. Applying the same reasoning to the present facts, Penelope
Reed QC held that it was the defendant's authorisation of the playing of music in public which was the relevant act;
accordingly, a finding of infringement could be made even though the defendant had not specifically authorised the
playing of the individual songs which gave rise to the claim for copyright infringement. The Amstrad decision was
distinguished on the basis that the defendant in that case had no control over the use to which its equipment was
put by purchasers, while the defendant in the present case had complete control over the playing of music on his
restaurant premises.
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5 Copyright Ownership and Authorship
The case of Mei Fields Designs Ltd v. Saffron Cards and Gifts Ltd, 12 meanwhile, raised issues concerning
copyright ownership and joint authorship of works in the context of an employer-employee relationship. The works
at issue were greeting
50(3) IIC 352 (2019) at 359
cards which had been designed by Mrs Mei Fields while employed as the design director of Metropolis Worldwide
Ltd (“Metropolis”). Mrs Fields and her husband were the only directors and shareholders of Metropolis, and both of
them were also its employees. Initially, Metropolis was a distributor of greeting cards produced by third parties, but
subsequently began producing greeting cards based on designs licensed from third parties. It also produced and
sold greeting cards designed by Mrs Fields. Following an approach by a third party wishing to license Mrs Fields'
designs, Mr and Mrs Fields incorporated the claimant company with the intention of using it as a corporate vehicle
for the exploitation of Mrs Fields' card designs. A document was executed which purported to assign to the claimant
all copyright owned by Mrs Fields in the cards which she had designed, and the claimant also entered into a licence
agreement with Metropolis in respect of Mrs Fields' card designs.
Following some financial difficulties, Metropolis went into administration, and its assets were later sold to the
defendant. The defendant then entered into a licence agreement with the claimant allowing the defendant to
produce and sell cards based on Mrs Fields' designs. This licence agreement was subsequently terminated
following a number of disputes between the parties; however, the defendant continued to sell cards based on Mrs
Fields' designs. The defendant contended that, as Mrs Fields had created those card designs during her
employment with Metropolis, Metropolis was the first owner of the copyright in those designs. This was based on
Sec. 11(2) of the CDPA, which provides: “Where a literary, dramatic, musical or artistic work, or a film, is made by
an employee in the course of his employment, his employer is the first owner of any copyright in the work subject to
any agreement to the contrary”. Accordingly, it was the defendant's position that it had acquired the copyright
subsisting in these designs by purchasing Metropolis' assets.
As it was common ground between the parties that Mrs Fields was an employee of Metropolis at the relevant time,
the case turned on whether she had created the card designs in the course of her employment. In addressing this
question, David Stone J applied a multifactorial test which took into account, inter alia, the following factors: (i) the
terms of the contract of employment; (ii) where the work was created; (iii) whether the work was created during
normal office hours; (iv) who provided the materials for the work to be created; (v) the level of direction provided to
the author; (vi) whether the author could refuse to create the work; and (vii) whether the work was “integral” to the
employer's business. On this basis, he found that Mrs Fields had not created the card designs in the course of her
employment with Metropolis. While Mrs Fields' role was that of design director, her duties did not include designing
cards; instead, she was responsible for pricing, sales performance, quality assurance, promotional materials,
website development, exhibitions and preparing products for presentation at annual sales meetings. Furthermore,
much of her design work was carried out at home, and was done independently and without direction from
Metropolis. There was also no suggestion in the evidence that Metropolis could compel Mrs Fields to design cards;
indeed, Mrs Fields gave evidence that she could stop designing at any time. While Mrs Fields' designs were
important to Metropolis' business, David Stone J found that
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they were not “integral”. The evidence showed that, if Mrs Fields ceased to design for Metropolis, Metropolis would
simply license designs from third parties or create new designs of its own. Indeed, there was evidence that
Metropolis had continued to license designs from third parties other than Mrs Fields during this time, and a junior
designer employed by Metropolis had also designed a separate range of cards which had been put into production
by Metropolis. On this basis, it was held that Mrs Fields had created the card designs outside the scope of her
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employment with Metropolis; accordingly, it was she, and not Metropolis, who was the first owner of the copyright in
them.
The defendant also sought to argue that Mrs Fields was not the sole author of her greeting card designs, but had
instead authored them jointly with several of Metropolis' junior designers. Section 10(1) of the CDPA defines a
“work of joint authorship” as “a work produced by the collaboration of two or more authors in which the contribution
of each author is not distinct from that of the other author or authors”. The defendant based its argument on the fact
that Mrs Fields did not have the skills to digitise the designs from her original sketches, and thus had to seek
assistance from Metropolis' junior designers for this part of the process. The defendant contended that, in providing
this assistance, the junior designers had exercised sufficient skill, labour and judgment to make them joint authors
of Mrs Fields' designs; this, in turn, made Metropolis – and, consequently, the defendant – the joint owner of the
copyright in those designs by virtue of the employment relationship between Metropolis and the junior designers.
This argument was rejected by David Stone J, as the evidence showed that the assistance provided by the junior
designers amounted to no more than operating a scanner. While they had demonstrated skill in using the scanner
and its associated computer programs, they had made no authorial contribution towards Mrs Fields' card designs
themselves. In doing so, the judge relied on the criteria for determining joint authorship set out by HH Judge
Richard Hacon in Martin v. Kogan.13
The final case discussed here, Chadwick v. Lypiatt Studio Ltd, 14 also raised the question of copyright ownership in
the context of an employer-employee relationship. This case concerned the works of the late Lynn Chadwick, one
of the leading British sculptors of his time. At issue was whether the copyrights in those works vested in the
sculptor's estate upon his death or whether they were the property of the defendant company, which had been
acquired by Chadwick and his widow Éva in 1973. This was done on the basis of advice from Chadwick's
accountant, who had suggested that it would be more tax-efficient for him to transfer the entire trading business in
his artworks to a limited company. Chadwick and Éva became equal shareholders and co-directors of the defendant
company with the intention of making it the trading vehicle for Chadwick's artworks. Chadwick transferred the
assets relating to his artworks to the defendant company, including casts which had already been made from his
sculptures, working models, and all of his existing works. However, no express mention was made as to the transfer
of the ownership of the copyright in these works. Subsequent to this, Chadwick continued
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to create new sculptures, casts of which were made and marketed by the defendant company. Again, no express
agreement was entered into as to the ownership of the copyright in these works.
It was common ground between the parties that the legal title to the copyright in Chadwick's pre-1973 works
remained vested in the claimant, as Chadwick had not fulfilled the necessary formalities needed to transfer such
legal title to the defendant company. Section 36 of the Copyright Act 1956, which was the copyright legislation
prevailing at the time, requires an assignment of copyright to be made “in writing signed by or on behalf of the
assignor”. 15 The first question raised by these facts, therefore, was whether the defendant company could be
regarded as the beneficial owner of the copyright in the works created by Chadwick prior to 1973. The defendant's
case was that the arrangements and agreement made in 1973 were plainly intended to transfer the copyright in
Chadwick's pre-1973 works to the defendant company, in order to enable the exploitation of Chadwick's works to be
carried out in a more tax-efficient way. This showed that there was mutual understanding between the parties that
the defendant company would own the copyright as well as the physical property in Chadwick's pre-1973 works and
would take over from Chadwick's business as a sole trader the production, reproduction, exploitation, storage and
preservation of his works. This argument found favour with Richard Spearman QC (sitting as a Deputy Judge of the
High Court), who concluded that there was ample evidence pointing to an agreement for Chadwick to assign the
copyright in his pre-1973 works to the defendant company. This was sufficient to vest the beneficial interest in such
copyright in the defendant company, which in turn gave rise to an obligation on the part of the claimant to transfer
the legal title in the copyright to the defendant company.
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The second question which arose in this case was whether the defendant company was the owner of the copyright
in the works created by Chadwick subsequent to the date on which it began trading. It was the defendant's case
that Chadwick became an employee of the defendant company on that date, and that all the works produced by
Chadwick subsequent to that date were created in the course of that employment. Under Sec. 4 of the Copyright
Act 1956 and Sec. 11(2) of the CDPA, this would make the defendant company the first owner of the copyright
subsisting in those works. The case thus turned on whether the relationship between Chadwick and the defendant
company was that of an employee and employer. While no written contract of service between Chadwick and the
defendant company had been found, the defendant sought to argue that the following factors supported its case
that Chadwick was an employee of the defendant company at the relevant time: (i) Chadwick was paid a salary by
the defendant company; (ii) the defendant company made National Insurance on Chadwick's behalf; (iii) Chadwick
received no direct remuneration for the exploitation of his works from external sales agents or galleries, with all
such payments being made instead to the defendant company; (iv) the pension scheme established by the
defendant company for Chadwick was an employee pension scheme; and (v) Chadwick treated himself as an
employee of the
50(3) IIC 352 (2019) at 362
defendant company when making payments, preparing his personal tax returns and preparing the accounts of the
defendant company.
Once again, Richard Spearman QC agreed with the case put forward by the defendant. While it was acknowledged
that Chadwick was a director of the defendant company, with very little control being exercised over him by a
superior on a day-to-day basis, the judge held that this did not preclude Chadwick from being regarded as an
employee of the latter. He emphasised that the degree of control exercised by the employer, while important in
many cases, was not determinative of employee status; and that in any event, the absence of such control was of
little use as a test in such a case as the present. Accordingly, this consideration was outweighed by other factors
which supported the defendant's contention relating to Chadwick's employee status, including: (i) the fact that his
relationship with the defendant company did not involve any prospect of personal profit or personal loss, as
opposed to profit or loss for the defendant company; (ii) the fact that he was properly regarded as part of the
defendant company's organisation; (iii) the fact that he was not carrying on business on his own account, but was
instead carrying on the business of the defendant company; (iv) the fact that his equipment was provided by the
defendant company; (v) the fact that the arrangements relating to tax and National Insurance were consistent with
an employment relationship; and (vi) the parties' own view of the relationship as being one of employment. On this
basis, Richard Spearman QC upheld the defendant's contention that Chadwick was an employee of the defendant
company at the relevant time, and that the works produced by Chadwick after the date on which the defendant
company commenced trading were created in the course of that employment. Accordingly, the defendant company
was the first owner of the copyright in those works.
Reference
Lee YH (2018) United Kingdom copyright decisions. IIC 49(3):324–330
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