Contracts: Commercial law: Media and entertainment: Electronic commerce
The applicant company (P) applied for summary judgment against a record label company (E) on its claim concerning the sale of tracks produced by a rock band.
An agreement had been executed in June 1999 between P and E, terminating all earlier agreements, in relation to the sale of music albums produced by the band. A master licence agreement, which was incorporated into the June agreement, conferred a right on E to exploit certain albums. The licence agreement included provisions relating to online distribution and defined ‘album’ and ‘record’. An audit of a royalty statement carried out pursuant to the licence agreement indicated that a number of areas were undercounted to the value of £10m. However, only some claims remained as others were settled. The main disputes concerned online royalties and the sale of single tracks by E otherwise than in the original configuration of the albums without P’s consent. P maintained that there was an unauthorised exploitation of single downloads, ringtones and streaming. E submitted that many of the provisions of the licence agreement applied to physical products so that individual tracks could be sold in digital format.
Held: The purpose of the master licence agreement was to preserve the artistic integrity of the albums. On a proper construction of that agreement, it extended to digital and like products. It treated online distribution of musical tracks in the same way as the exploitation of physical products. There was nothing in the definition of ‘album’ and ‘record’ to suggest that the agreement was confined to physical products. Accordingly, the sale of albums in any configuration other than the original configuration was prohibited. E had not demonstrated that there was a real prospect of resisting P’s claim. Judgment in respect of other matters was given in private.
Robert Howe QC, Shaheed Fatima for the application; Elizabeth Jones QC for the respondent.
Pink Floyd Music Ltd & anr v EMI Records Ltd: Ch D (Sir Andrew Morritt (chancellor)): 11 March 2010