Judgment was given yesterday in an important case concerning the liability of employees, whether or not they are directors, for copyright infringements committed by their employing company.
Charly Records Limited was a company that released records of old recordings, including recordings which had originally been included on records comprising the Chess Records catalogue owned by MCA.
MCA sued Charly for infringement of its copyrights. MCA also sued one of Charly’s employees, Jean Luc Young. MCA claimed that Young, who was not a director, was liable for the infringements carried out by Charly because he personally authorised, procured and directed the infringing acts of Charly.
Copyright in a work is infringed by a person who does, or authorises another to do, any of the acts that infringe copyright.
Charly was wound up in May 1996 making it unlikely that MCA could recover anything from Charly.
MCA successfully applied for summary judgment against Young but the Court of Appeal overturned this decision and sent the case back to the High Court for a full hearing.
The High Court looked very closely at the exact role played by Young in the company and concluded that the reality was that he directed or procured the company’s infringing acts. In reaching this conclusion the judge looked not only at the positive steps Young took but also at the fact that he could have stopped the infringing acts but did not do so.
The decision may help rights owners obtain redress against individual employees within companies responsible for infringements and will be particularly useful where a company has become insolvent.
Employees should be aware that if they play a role in the strategy and policy of the company, whether or not they realise that they are infringing copyrights or trade marks, there is a possibility that they could be held liable for the infringing acts carried out in the name of their employer.