Copyright - FBT Productions, LLC v Let Them Eat Vinyl Distribution Ltd and Another
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| Vinyl Record |
Jane Lambert
Intellectual Property Enterprise Court (HH Judge Hacon) FBT Productions, LLC v Let Them Eat Vinyl Distribution Ltd and another [2019] EWHC 829 (IPEC)
This was a claim for infringement of copyright in the sound recording of an album called Infinite by Marshall Bruce Mathers III who is better known as Eminem. The claimant, a Detroit record company, alleged that the first defendant had made vinyl copies of Infinite which it supplied to the second defendant for resale to the public. Neither defendant denied those acts but they challenged the claimant's claim to copyright and the second defendant denied that it knew or had reason to believe that the items that it sold were infringing copies.
The Issues
The action came on for trial before His Honour Judge Hacon. At paragraph [5] of his judgment, he identified three issues in dispute:
(1) Whether the claimant owned the copyright.
(2) Whether the defendants were licensed under the copyright.
(3) If there was no licence, whether the second defendant knew or had reason to believe that the vinyl copies of Infinite which it sold, and the CD copies which it imported and sold, were infringing copies of the sound recording of Infinite.
According to the judge, the defendants' counsel conceded the second issue in his closing speech which left only the first and third to be decided.
The Claim to Copyright
Two brothers called Mark and Jeff Bass operated a recording studio in Detroit called FBT ("Funky Bass Team") in partnership in the name or style of "FBT Productions." Mr Mathers entered a recording agreement with the brothers who recorded Infinite and released it on their "Web Entertainment" label. About 500 copies of the recording were sold: about half in vinyl and half in cassette format. In 1998 FBT Productions entered an agreement with Aftermath Entertainment whereby Mr Mathers recorded for Aftermath and not FBT. In 2000 the brothers incorporated the claimant which acquired their partnership business.
The defendants challenged the brothers' recording contract with Mr Mathers on the ground that it described their partnership as a company rather than a partnership and the contract covered copyright in Mr Matthers's songs but not in recordings of those songs. They also submitted that the agreement with Aftermath assigned the copyright in Infinity.
His Honour was not impressed by any of those arguments. As to the first point, clause 24 (i) of the recording agreement defined "the Company" as "F.B.T. Productions, its licensees, lessees, affiliates, subsidiaries and assigns." With regard to the second, an assignment of sound recordings would be unnecessary because the owner of the recording studio would be the first owner of any copyright in the sound recording that Mr Matthers. As for the third, the judge observed at paragraph [30]: "The purpose of the agreement was to transfer the recording services of Eminem from the Bass Brothers partnership to Aftermath. It was not to assign copyright in sound recordings." Judge Hacon had no doubt that the claimant owned the copyright in the recording of Infinity.
Knowledge or Reason to Believe
S.23 of the Copyright, Designs and Patents Act 1988 provides:
"The copyright in a work is infringed by a person who, without the licence of the copyright owner –
(a) possesses in the course of business,
(b) sells or lets for hire, or offers or exposes for sale or hire,
(c) in the course of a business exhibits in public, or distributes, or
(d) distributes otherwise than in the course of business to such an extent as to affect prejudicially the owner of the copyright,
an article which is, and which he knows or has reason to believe is, an infringing copy of the work."
It was common ground that the copies of Infinity made by the first defendant were "infringing copies" within the meaning of s.27.
"The copyright in a work is infringed by a person who, without the licence of the copyright owner –
(a) possesses in the course of business,
(b) sells or lets for hire, or offers or exposes for sale or hire,
(c) in the course of a business exhibits in public, or distributes, or
(d) distributes otherwise than in the course of business to such an extent as to affect prejudicially the owner of the copyright,
an article which is, and which he knows or has reason to believe is, an infringing copy of the work."
It was common ground that the copies of Infinity made by the first defendant were "infringing copies" within the meaning of s.27.
The judge referred to Mr Justice Morritt's dicta in L.A. Gear Inc v Hi-Tech Sports plc [1992] FSR 121:
"…it seems to me that 'reason to believe' must involve the concept of knowledge of facts from which a reasonable man would arrive at the relevant belief. Facts from which a reasonable man might suspect the relevant conclusion cannot be enough. Moreover, as it seems to me, the phrase does connote the allowance of a period of time to enable the reasonable man to evaluate those facts so as to convert the facts into a reasonable belief."
"…it seems to me that 'reason to believe' must involve the concept of knowledge of facts from which a reasonable man would arrive at the relevant belief. Facts from which a reasonable man might suspect the relevant conclusion cannot be enough. Moreover, as it seems to me, the phrase does connote the allowance of a period of time to enable the reasonable man to evaluate those facts so as to convert the facts into a reasonable belief."
He also referred to Mr Justice Lightman's observation in ZYX Music GmbH v King [1995] FSR 566 that "the reasonable man" mentioned by Mr Justice Morritt must be such an individual in the defendant's position.
At paragraph [41] Judge Hacon directed himself as follows:
"I must consider all the relevant facts known to Mr Beatty [managing director of the defendant companies] regarding the copies of Infinite he was distributing and decide whether, viewed objectively, a reasonable record distributor in his position would have arrived at the belief that they were infringing copies. The reasonable person is not a lawyer (not here, anyway) and I do not think that his or her belief must include a realisation of the full details of why there was an infringement of copyright, such as the identity and nature of the copyright work in question, precisely who owns the copyright or why there was no licence from the owner. It will be enough if the facts would have led a reasonable person to believe that dealing in the copies would be in breach of a right in the nature of copyright held by some other person. Merely suspecting that this is the case will not be enough."
"I must consider all the relevant facts known to Mr Beatty [managing director of the defendant companies] regarding the copies of Infinite he was distributing and decide whether, viewed objectively, a reasonable record distributor in his position would have arrived at the belief that they were infringing copies. The reasonable person is not a lawyer (not here, anyway) and I do not think that his or her belief must include a realisation of the full details of why there was an infringement of copyright, such as the identity and nature of the copyright work in question, precisely who owns the copyright or why there was no licence from the owner. It will be enough if the facts would have led a reasonable person to believe that dealing in the copies would be in breach of a right in the nature of copyright held by some other person. Merely suspecting that this is the case will not be enough."
The defendants' counsel made the following points:
[44] Secondly, the sleeve of the vinyl album provides LTEV's full name, full address in Wallingford, its telephone number and website address. It also states that it is manufactured and distributed by Plastic Head and says that it was made under licence from Boogie Up Productions. The statement about manufacture by Plastic Head is not right, but Mr Beatty could not have arranged for the sleeve to be more open about Plastic Head, LTEV and the source of its licence. This was not the behaviour of a man who believed he was dealing in unlicensed 'bootleg' albums.
[45] Thirdly, the CDs of the album had been sold for some time by Intergroove, apparently without complaint and both vinyl and CD versions were advertised openly by Plastic Head.
[46] Fourthly, Mr Beatty had a substantial business in lawfully selling albums and would not risk his reputation by selling bootlegs.
[47] Fifthly, Mr Beatty's response to FTB's complaint was the rapid and appropriate response of a man who honestly believed that he was selling licensed albums. Sales were promptly withdrawn."
The claimant's counsel replied as follows:
"[49] First, he invited me to disbelieve Mr Beatty's evidence that Intergroove had sold copies of Infinite in the absence of supporting documentary evidence.
[50] Secondly, Mr Beatty was experienced enough in the business to realise that further investigation was necessary before he ceased to have reason to believe that the Infinite albums his company was selling were not licensed.
[51] Thirdly, a reasonable person in Mr Beatty's position would have expected to receive a master tape from a party offering a legitimate licence to make vinyl copies of Infinite."
"[49] First, he invited me to disbelieve Mr Beatty's evidence that Intergroove had sold copies of Infinite in the absence of supporting documentary evidence.
[50] Secondly, Mr Beatty was experienced enough in the business to realise that further investigation was necessary before he ceased to have reason to believe that the Infinite albums his company was selling were not licensed.
[51] Thirdly, a reasonable person in Mr Beatty's position would have expected to receive a master tape from a party offering a legitimate licence to make vinyl copies of Infinite."
The judge preferred the second defendant's argument's to the claimant's:
"I am not sure what else Mr Beatty could reasonably have done. He believed that he was taking over from Intergroove in the lawful sales of Infinite and other albums and had received the response from MCPS referred to above. I attach no importance to the fact that LTEV made its copies of Infinite from a WAV file rather than a Master Tape. Mr Martin said that a WAV file could be a copy of anything – the Master Tape or a poor quality cassette recording. I infer that whatever had been copied to create the WAV file of Infinite supplied by Boogie Up to LTEV, Mr Beatty or a colleague was satisfied that it was of sufficiently good quality. It may in fact have been a copy of the Master Tape."
"I am not sure what else Mr Beatty could reasonably have done. He believed that he was taking over from Intergroove in the lawful sales of Infinite and other albums and had received the response from MCPS referred to above. I attach no importance to the fact that LTEV made its copies of Infinite from a WAV file rather than a Master Tape. Mr Martin said that a WAV file could be a copy of anything – the Master Tape or a poor quality cassette recording. I infer that whatever had been copied to create the WAV file of Infinite supplied by Boogie Up to LTEV, Mr Beatty or a colleague was satisfied that it was of sufficiently good quality. It may in fact have been a copy of the Master Tape."
His Honour concluded at [55] that the second defendant neither knew nor had reason to believe that the vinyl and CD copies of Infinite sold by Plastic Head were infringing copies of another party's copyright work.
Judgment
It followed that the claim for primary infringement against the first defendant succeeded but not the claim for secondary infringement against the second.
Comment
This case probably does not make any new law but it summarizes neatly the rules on knowledge and reason to believe for the purposes of secondary infringement. Anyone wishing to discuss this case should call me on 020 7404 5252 during office hours, or send me a message through my contact page.
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