Ownership of Copyright

United Kingdom
This article will be of interest to those who encounter copyright issues either on a daily or more occasional basis. It provides guidance on how to recognise areas of difficulty, gives practical advice on how to avoid potential pitfalls and focuses on current developments in this fast changing and complex area of law.

Copyright impacts on business activities perhaps more than any other intellectual property right. One product can be the subject of numerous concurrent rights. For example, in a book there could be copyright in the text, both hard back and paperback rights, translation rights, serialisation rights, copyright in the typographical arrangement, copyright in a photograph on the cover and in the overall design of the jacket, even theme park rights!

In the UK, the first owner of copyright in a piece of work is generally the author. Where more than one individual contributes to a work, copyright may be jointly owned. However, each participant must make the right kind of contribution to become a joint author. Recent cases highlight how difficult it can be to determine in what circumstances collaboration creates a jointly owned copyright. Special rules apply when the author is an employee who has created the copyright work in the course of employment. The first owner may not necessarily own the copyright or be able to exploit it now: like other property rights, copyright can be transferred or licensed to the third parties.

We also review the most significant recent copyright case law which has concentrated on the issue of “fair dealing” and copyright in ideas.

The author

In the UK, the author of a work is generally the first owner of copyright. In many instances, such as a book or painting, the identity of the author will be obvious. In other cases it is not so obvious and the law makes special provision as to who will be deemed the author. For example, the “author” of a computer generated work is the person who makes the arrangements necessary for creating it. This will usually be the person who owns or hires the computer and has invested capital in setting up and operating the system. Similarly, the publisher is the first owner of copyright in the typographical arrangement of a published edition of a work.

Where the author is not the first owner of copyright

The most important exception to the rule that the author is the first copyright owner occurs in an employment context. Where an employee creates a work in the course of employment, copyright in the work belongs to the employer, unless there is an agreement to the contrary. Also, the Crown owns copyright in any work produced by a crown servant in the course of his or her duties, even though not engaged under a contract of employment.

In contrast, where a work is commissioned from a freelancer, it is the freelancer and not the person who commissioned and paid for the work, who is the first owner of the copyright.

The way in which the law determines copyright ownership may lead to unsatisfactory commercial results. For instance, if an advertising agency produces copy for a campaign, it is likely that unless there is an agreement between the agency and the client, the agency will own the legal title to the copyright. This means that the client which commissioned and paid for the work may not be able to re-use the copy without the consent of the agency nor prevent the agency from using the same work for future clients. While there are legal arguments open to the commissioner in these circumstances in connection with equitable title to the copyright and the extent of any implied licence to use the work, such arguments are often difficult and their outcome inevitably uncertain.

Recent litigation between the well-known music broadcaster Robin Ray (who was engaged as a freelancer) and Classic FM illustrates the problems which can occur if no contractual provision is made to allow the commissioner to use the copyright. The Judge commented that the “expensive lesson” of this particular litigation was the “vital necessity” to consider copyright ownership at an early stage.

As a practical point, it is advisable to keep up to date records of all original works and relevant contracts, and to mark original works with the copyright symbol, ©, the name of the author and the date.

Joint Authorship

A finished piece of work frequently reflects the input of more than one person. Sometimes it is possible to separate out copyright ownership in a way that mirrors each individual’s contribution, for example, where separate writers are responsible for the lyrics and music of a song.

In contrast, where the individuals’ contributions are not so easily separable, the law provides that the copyright is jointly owned. The theory is clear, but in practice it is often difficult to be certain as to whether the nature and extent of collaboration is sufficient to give rise to joint authorship.

In particular, a joint author must input the “right kind” of skill and labour into a project. This is something approximating to “penmanship”, or a direct responsibility for what actually appears on the paper. If someone has made such a contribution, the Court will then examine whether the contribution is extensive enough to merit joint authorship.

This is illustrated by the recent case involving Robin Ray. He produced an original cataloguing system for Classic FM which was later incorporated into a database. Classic FM argued that they were a joint author and owner of copyright in the catalogue because they had made contributions to the work. The contributors were helping to define the specification during brain storming sessions and even providing one of their employees as an assistant to whom Mr Ray delegated minor tasks. Nevertheless, the Court decided that Classic FM’s contribution to the catalogue was not of the right kind to amount to joint authorship.

Another recent case involved bespoke software, to which a customer made significant contributions by performing extensive testing and bug fixing and making suggestions which were incorporated into the final product. The customer argued that it was a joint author of the software together with the software company who had developed it. Again, the Court decided that the customer’s contributions were not of the “right kind”, and so the software company alone owned the copyright.

Dealings in copyright

Copyright is a property right and as such can be transferred, licensed or mortgaged in the same way as other, more tangible, property. The only rights which an author of a copyright work cannot transfer or licence are his or her concurrent moral rights to be identified as the author and not to have the work subjected to derogatory treatment. Otherwise, an author is free to exploit copyright in any way, so long as he has not assigned it or granted a prior exclusive licence.

Assignments

An assignment transfers ownership of copyright outright and enables the new owner to exercise all the rights of the author. A copyright assignment must be in writing and signed by the author. It is possible to assign copyright in works which do not yet exist, which is referred to as “future copyright”.

However, an assignment will not include the right to sue for past infringements of copyright unless there is a specific provision to that effect. This was highlighted in a recent case involving rights in the “Teletubbies”. The BBC failed in an application for a form of quick judgment which would have avoided the need to bring the case to full trial. This was because, among other reasons, they had not obtained assignments of the right to sue for past infringements from some of the freelance authors who had drawn the Teletubby characters.

Copyright can be assigned in whole or in part. Authors commonly divide up their rights in a single work, either geographically or in a multitude of other ways. This can make the business of identifying who owns a particular aspect of copyright in a work difficult.

Licences

In other situations, the owner may be unwilling to part with ownership of the copyright completely, but may be prepared to grant a licence. A licence may be exclusive or non-exclusive and may be for limited or unlimited purposes.

Exclusive licences are commonly used in publishing as between an author and a publishing house. The owner of an exclusive licence has the sole right to exploit copyright and can even prevent the author from doing so. In contrast, a copyright owner may grant a number of non-exclusive licences in the same work and still retain the right to exploit it. Non-exclusive licences are frequently seen in areas such as photography, where for example a number of newspapers may be licensed to publish the same photograph.

No particular formalities are needed to grant copyright licences but it is best for them to be in writing to avoid misunderstandings.

Practical Tips

- Consider carefully ownership of copyright at an early stage in any transaction which involves the creation of valuable original work, especially where the work is to be created by freelancers or by more than one person.

- Ensure that copyright ownership in existing and future works is dealt with expressly in contracts.

- Keep up to date records of all original works.

- Mark original works with the copyright symbol ©, the name of the author and the date.

- Assignments must be in writing and signed by the copyright owner.

- Check whether licences are exclusive or non-exclusive and whether they are limited in purpose.

Copyright in the Courts

Marks and Spencer plc loses press cuttings case

The Newspaper Licensing Agency (NLA) owns copyright in the typographical arrangements of all national newspapers. Marks and Spencer (M&S) received press cuttings from an agency which they copied for internal circulation. The NLA brought an action for copyright infringement and M&S pleaded the defence of “fair dealing” for reporting current events. The Court of Appeal found as follows:

- There is no requirement that “reporting” current events means that the report needs to be made in the media or to the public or to be accessible to the public.

- The defendant’s publication may constitute fair dealing even if it contains no analysis or comment, and consists merely of the copyright material.

- The term “current events” is narrower than the term “news”, as reporting of news may extend to information relating to past events which was not previously known. Further, the event need not be national - it may be a matter of entirely local interest. On the other hand, reporting of current events does not extend to reporting matters which are merely currently of interest but are not current events, such as interviews, music reviews and lifestyle articles.

Here there was wholesale copying which went far beyond what was necessary to report current events to M&S staff. If M&S did not either circulate original cuttings, or summarise the cuttings for its staff, it would have to take a licence from the NLA. The case still leaves open the possibility of companies such as M&S supplying their staff with copies of press cuttings, provided that they really do report on current events, and no more.

“Fair dealing” in Diana footage

The Sun newspaper was successful in arguing the “fair dealing” defence in reporting current events when it was sued by the security company employed by Mohammed Al Fayed. The dispute related to the publication in The Sun of pictures taken from a security camera at Mr Al Fayed’s property in Paris showing Princess Diana and Dodi Fayed entering and leaving the property, including the times of their entry and departure. The Sun had purchased the pictures from a disgruntled ex-employee of the security company and published them in response to public statements made by Mr Al Fayed that the Princess and Dodi had spent two hours at the property with an interior designer and had been planning to marry and live there.

In finding for The Sun, the Court decided that it was too narrow a view of “current” to argue that the subject matter was over a year old. Further, Mr Al Fayed had put the subject matter into the public domain again two days before the publication of the pictures by The Sun: by raising the matter in a public forum, Mr Al Fayed made it “fair dealing” for The Sun to respond in the same forum.

Copyright in ideas

There has been much recent debate over the use of others’ ideas. A film director, Mehdi Norowzian, recently failed in his claim for copyright infringement against an advertising agency in a case which involved an advertisement for Guinness stout. The agency liked one of the director’s short films, and shot its own film using a different set and actor. The finished film clearly borrowed the original film’s editing techniques and overall concept so that aspects of the two films looked strikingly similar. However, the Court found that the film’s originality lay in its concept, use of camera angles and editing techniques, for which there is no copyright protection.

Also the Court of Appeal has recently allowed an appeal by a textile company against a copyright infringement case brought by Designers Guild who had alleged that one of their fabric designs featuring stripes and flowers had been copied. The Court ruled that it was not an infringement of copyright to copy an idea or to use the same techniques, provided that the application of the idea did not involve copying a substantial part of the original work.

For further information on intellectual property issues, please contact Stephen Whybrow on Tel: 0171 367 3000 or E-mail: skw@cms-cmck.com