November 5, 2018

The defendant, Cruiseco Ltd, and its Australian parent company operated cruise holidays. One of the holidays was a music-themed cruise marketed as “Back to the 80s” and a short video or sizzle reel (Publicity Clip) was produced to promote the cruise, including extracts from two well-known Spandau Ballet songs, “Gold” and “True”. On 22 June 2017 Cruiseco posted the Publicity Clip on its website, put it on the file sharing platform Hightail and sent a link to that platform to a large number of UK High Street travel agents, encouraging them to use it.

The claimant, Reformation Publishing Company Ltd, was the owner of the copyright in the music and the lyrics of the two songs pursuant to an agreement with Gary Kemp, the author of the songs, under which he was employed by Reformation (of which he was the sole owner) for his composing and writing services. Cruiseco had not obtained any licence for the use of the songs and it accepted (following a one-day trial) that it had therefore infringed Reformation’s copyright. This hearing before Mr Justice Nugee concerned the amount of damages payable by Cruiseco for the infringement. It was agreed that these should be assessed on the basis of what a reasonable licence fee would have been.

Nugee J first assessed how long the infringement had continued for. The facts were that, on being contacted by Reformation, on 26 June 2017 Cruiseco had taken down the Publicity Clip from its websites and had told the travel agents not to use it. However, it had failed to take it down from the file-sharing platform where it remained live for a year until 26 June 2018. Reformation argued that this constituted infringement under s 20(2)(b) of the Copyright, Designs and Patents Act 1988 as the making available to the public of the work.

The critical question was, Nugee J said, whether the clip was made available “to the public”. It was not suggested that anyone could access the clip unless they had the link, which meant that simply putting the video on Hightail was not, by itself, making it available to anyone. However, sending someone (i.e. the travel agents) a clickable link to the file-sharing site clearly did make its content available to the recipient, for as long as the link remained active. The question was, therefore, whether Cruiseco had made the link available to a sufficient number of recipients to constitute “the public”.

Nugee J said that, following Case C-306/05 SGAE v Rafael Hoteles SL [2007] ECDR 2, the 257 travel agent representatives were not an “indeterminate” number of potential recipients, and making the link available to them was not by itself making the clip available “to the public”.

Further, he said, there was no actual, direct evidence of the link being sent on by any of the recipients to members of the public. The question was, therefore, what would have been likely to happen in the normal course of events? The only evidence here was witness evidence, which suggested that it was “speculative” to say that the travel agents might have sent the link on.

The question was, therefore, whether it was sufficient that Cruiseco had encouraged the travel agents to disseminate the link. Nugee J found that encouragement was “not enough”, as it did not establish that any of the travel agents actually sent the link on. Further, there was no evidence as to whether, if any of the travel agents did send the Publicity Clip to clients, they had done so by downloading the video and forwarding it, or by forwarding the link. Only the latter would be a continuing infringement within s 20(2)(b). Nugee J held, therefore, that Cruiseco had not continued to make the Publicity Clip available to the public by failing to take it down from the file sharing website for over a year. Therefore, the infringement lasted for five days only.

The parties agreed that damages should be assessed on the basis of a reasonable licence fee. Accordingly, Nugee J considered whether the duration of a notional licence was the period of infringement, or the period that would have been negotiated had a licence been sought.

Following Eaton Mansions (Westminster) Ltd v Stinger Compania de Inversion SA [2013] EWCA Civ 1308, which Nugee J said was “indistinguishable” from this case despite it being a trespass to land case, Nugee J found that the hypothetical licence was limited to the period of actual infringement, i.e. five days, not the duration of a licence term that would have been negotiated if Cruiseco had in fact sought to take a licence.

In Nugee J’s view, this was “plainly right in principle”, as the purpose of asking the question what licence fee would hypothetically have been negotiated was not an end in itself, but a means of assessing damages for the infringement that had occurred.

As for the terms of a notional licence, the parties agreed that:

• the licence would have been for both songs;
• the licence would have covered usage on the internet;
• the licence would have covered point of sale use; and
• the licence would not have extended to television usage.

The main issue was whether the hypothetical licence would have been for global internet usage or limited to the UK and Australian markets.

Nugee J accepted that Cruiseco’s websites and, most likely, the travel agents’ websites, were targeted at the UK and Australia. The infringement was therefore primarily in the UK and Australia. However, by sending the Publicity Clip to the travel agents with an encouragement to place it on social media, Cruiseco had invited them to put it on platforms that were not necessarily targeted in the same way. A hypothetical licence permitting Cruiseco to do that would not, therefore, have been limited to the UK and Australia, but would have been for internet use generally, although as an adjunct to a licence to use primarily on websites targeted at the UK and Australia.

As for what a reasonable licence fee for the hypothetical licence would have been, Nugee J noted that Reformation did not have a regular rate that it charged for use of either True or Gold. Each licence it entered into was the subject of an individual negotiation. Comparator licences were, therefore, the best evidence of what figure would have been agreed in the hypothetical negotiation. However, every licence was different, depending on territory, duration, permitted use, etc.

Nugee J said that there was a substantial value in being associated with two iconic songs, even for a very short period. Therefore, even for a five-day licence, there was a substantial price to be paid. On the evidence, including expert evidence, Nugee J awarded Reformation £38,750 by way of ordinary damages pursuant to s 96(2) of the CDPA.

As for additional damages under s 97(2) CDPA, the facts were that the Publicity Clip was produced for Cruiseco by Artists Network Australia (ANA). Reformation argued that ANA were at least reckless as to whether they were infringing the copyright owner’s rights. The questions were: (i) was ANA Cruiseco’s agent for this purpose? (ii) was ANA reckless? (iii) did the circumstances justify an award of additional damages? and (iv) if so, how much?

On the evidence, Nugee J found that this was indeed a case for an award of additional damages under s 97(2) on the grounds that ANA had acted “flagrantly” as Cruiseco’s agent. It had effectively “decided to chance it” and this was sufficient to amount to at the lowest recklessness in the sense of an attitude of “couldn’t care less”, Nugee J said. Nugee J awarded a further £25,000 in additional damages, bringing the total damages payable to £63,750. (Reformation Publishing Co Ltd v Cruiseco Ltd [2018] EWHC 2761 (Ch) (22 October 2018) — to read the judgment in full, click here).