Hot News – Issue 5

A monthly round-up of interesting legal snippets.

Advertisers beware: when is borrowing ideas theft? The threshold between ‘borrowing’ ideas and actually infringing copyright in relation to advertisements is notoriously ill-defined. A High Court action, which is yet to be decided by Mr Justice Rattee, may help to delineate the crossing point a little more clearly in future.

Director Mehdi Norowzian has accused Guinness and Arks – the Dublin agency which made Guinness’ 1995 ‘Anticipation’ commercial showing a young man ‘dancing’ with a giant pint of Guinness – of basing the commercial on his short film ‘Joy’.

The basis of Norowzian’s claim is that after he refused Arks’ invitation to direct the commercial, the agency went ahead anyway and made the commercial in the style of Norowzian’s film. Norowzian had refused the invitation specifically because he felt it would harm his reputation if he were perceived to be repeating old work.

According to Christopher Floyd QC, representing Norowzian, the director who was hired in Norowzian’s place was shown ‘Joy’ by Arks and instructed to bring the advertisement in line with the style of the film as the ‘Joy’ concept had already been sold to Guinness who were ‘charmed’ by it.

Further evidence has been given in support of Norowzian’s case to show that the replacement director went on to make a test video superimposing a pint of Guinness onto ‘Joy’, and that the film was used to coach the actor who featured in the commercial.

The judgment is expected by the end of July; we will cover this in our next edition of Hot News.

JFK case ruling: on July 8th the Clerk to the US District Court, Central District of California issued a notice in the law suit known as Garrison -v- Warner Bros et al. This was a case brought by the estate of Jim Garrison on whose story the film JFK was based. The claim was brought against Warner Bros, Sony, Columbia, Disney, Fox, Universal, MGM, United Artists and The Motion Picture Association of America alleging violation of anti-trust laws arising out of standard net profit definitions. The law suit was intended to be a class action, with the members of the class being those people who entered into contracts containing standard net profit definitions with one or more of the defendants during the period from January 1st 1988 to August 28th 1996. The July 8th 1998 ruling has determined that this law suit was not properly maintainable as a class action, and the class should be de-certified. The Courts Order states that since compensation is individually negotiated in addition to the net profits clause, it is inappropriate for this to be regarded as a class action. The Court did not rule on the merits of the plaintiff’s charges, or on the denials or other defences made by the defendants.

If at first you don’t succeed… : the three remaining Beatles, together with John Lennon’s widow, Yoko Ono, have been successful in preventing the distribution of a CD of an early performance by the band at the Star Club in Hamburg.

The performance had been recorded shortly after the Beatles had signed to EMI, in 1962. The recording was made by Teddy ‘King Size’ Taylor who, with his band The Dominoes, was on the same bill as the Beatles. Mr Taylor claimed that in return for getting ‘the beers in’ John Lennon had given permission on behalf of the band for the recording to be made.

For the Beatles part, George Harrison said that the recording was the ‘crummiest ever made’. He also said that John Lennon would have said something to the others if he had agreed to the recording but, even if he had agreed, the band worked on a democratic basis and John Lennon was not entitled to give consent on behalf of the band and that, in any case, ‘one drunken person recording another bunch of drunks does not constitute a business deal’.

In giving judgment for the Beatles the Judge said that he preferred the evidence of George Harrison which he found to be convincing to that of Mr Taylor which he said was inconsistent. The Judge ordered that the tapes be handed over to the Beatles’ lawyers and that costs be paid by the defendants.

Interestingly, this is not the first time that this particular recording has been the subject of litigation. In 1977 the Beatles failed to obtain an injunction to prevent the same recordings from being exploited in vinyl form (which was brought before the introduction of the Copyright Designs and Patents Act 1988 which gives stronger protection for performers than the previous law). In refusing to award the injunction, the judge was of the opinion that, not withstanding there was nothing in writing, the giving of consent to record the tapes was not a matter in dispute.

If nothing else, this case demonstrates the oft used maxim that oral contracts are not worth the paper they are written on and that legal advice should always be sought in relation to the exploitation of artistic works.

Conviction for Executive of Online Service Provider: a former executive of CompuServe’s online service in Germany has been given a two-year suspended sentence for helping the spread of child and animal pornography – despite the prosecution’s decision to call for the executive’s acquittal. The prosecution had argued that the executive had knowingly facilitated the spread of child and animal pornography in newsgroups on the Web to which its subscribers had access; however, it subsequently came to agree with the defence that the executive could not have been expected to police the content of material on the Web given the enormous amount of material involved. However, the judge thought otherwise and the outcome of the case has caused considerable surprise to those working within the new media field.

The case against the executive was brought before new legislation in Germany came into effect: the first of its kind, the new law seeks to regulate cyberspace and states that Internet access providers will not be liable unless (i) they are aware of the offending content and (ii) they do not use those means which are both reasonable and technically possible to censor such content.

Own Goal? The World Cup has caused a flurry of legal problems. A number of people have jumped on the bandwagon and have not been able to deliver. In England there are companies who have accepted bookings for tickets, flights and accommodation without being able to deliver either because of their own incompetence or dishonesty or because they have been let down by third parties in France. There have also been examples of French companies who have provided facilities to English companies and remain unpaid.

Python case leaves licensees sick as a parrot: a recent case demonstrates how innocent ‘rightsholders’ can lose out if the chain of title to the rights purportedly granted is flawed.

When members of the Monty Python comedy team made the film ‘The Life of Brian’, their company (‘Python’) entered into production and distribution agreements with Handmade Films (‘Handmade’) and a Panamanian company; both agreements included important restrictions on cutting and editing the film. The parties to these agreements also signed a contemporaneous side letter which specified that the distribution rights would terminate if the restrictions were not included in any subsequent agreements for the exploitation of the film. However, in 1984, a licence to show the film was granted to the second defendant (‘Channel 4’) which did not include the necessary restrictions. In 1994, rights under the production and distribution agreements were assigned to the first defendant (‘Paragon’); this was done with the consent of Python, subject to Paragon assuming all the obligations originally imposed. Unfortunately, Paragon was unaware of the side letter and subsequently granted further licences, including another two to Channel 4 in 1995 and 1996 respectively, which did not include the restrictions on cutting and editing. Python only became aware of the defective licences in the summer of 1996.

In the High Court case which followed (Python (Monty) Pictures Limited -v- Paragon Entertainment Corporation & Anor (1998)), Mr Justice Rattee has held that Python had the option under the side letter to treat the authority granted to Handmade as terminated when the latter entered into any agreement which did not comply with Python’s requirements under the side letter. However, because Python knew about the offending licences granted by Handmade and did not exercise its option, Handmade could continue to exercise the authority originally granted to it.

The same was not true for Paragon because Python had notified both Paragon and Channel 4 that it was terminating Paragon’s authority as soon as Python became aware of the defective licences. Furthermore, the date of termination was the date Paragon granted the first of those licences – 29 August 1994 – and, therefore, Paragon had no power to grant the 1995 and 1996 licences to Channel 4. The fact that neither of the defendants had been aware of the terms of the side letter did not mean they were not bound by them since Handmade only had the right to assign a terminable authority.

Bulletins are for general guidance only. Legal advice should be sought before taking action in relation to specific matters. Where reference is made to Court decisions facts referred to are those reported as found by the Court. Please note that past bulletins included in the Archive have not been updated by any subsequent changes in statute or case law.