Crosstown Music Company 1 LLC v Rive Droite Music Ltd, Mark Taylor & Paul Barry (2010)
A provision in an assignment of copyright allowing automatic reverter of the rights to the assignor on a future event, namely an unremedied material breach of contract by the assignee, was a valid partial assignment within the Copyright, Designs and Patents Act 1988 s.90(2).
The appellant music publisher (C) appealed against a decision ((2009) EWHC 600 (Ch)) dismissing its claim for a declaration that it retained copyright in songs written by the second and third respondent songwriters (W), which it had acquired from the first respondent company (R). W had assigned to R the worldwide copyright in the songs for a 25-year period, after which the rights would revert to W. That agreement contained a reverter provision at cl.18, which provided that all rights assigned to R would revert to W in the event that R was in material breach of the agreement and the breached had been notified to R but not remedied. It also provided that it would be subject to English law and jurisdiction. C acquired the copyrights under a further assignment from R. W served notices on C requiring it to remedy various alleged breaches by R, failing which W would contend that there had been an automatic reverter of the rights to them. C sought an order requiring R to account properly to W and a declaration that the copyright had not reverted to W. The judge found that the rights had reverted to W on the dates the notices expired. C argued that (1) the automatic reverter clause was ineffective under the Copyright, Designs and Patents Act 1988 s.90(2) as the section required an assignment to be for a fixed and certain period, so there could be no reverter contingent on an uncertain future event; (2) Lucasfilm Ltd v Ainsworth (2009) EWCA Civ 1328, (2010) 3 WLR 333 showed that the judge had had no jurisdiction to determine the dispute insofar as it related to foreign copyright; (3) W had abandoned their rights to a reverter.
(1) Clause 18 was not an agreement to reassign the copyright in the future but an automatic reverter provision: re-vesting took place forthwith on fulfilment of the conditions and without the need for a reassignment or other transfer to W. The nature of copyright, as property and as the offspring of the 1988 Act, was central to the case. The Act did not limit valid legal assignments to absolute assignments: it expressly permitted them to be for part of the copyright period. The key question was whether an assignment subject to automatic reverter in the event of a breach before the expiration of the copyright period was a form of partial assignment permitted by s.90. An assignment under which the period granted terminated on a future event such as a breach of contract fitted in the ordinary meaning of s.90. Further, there were no good grounds of principle or policy for implying any restrictions on the assignment of copyright in the instant case. Moreover, there were examples of automatic reverter provisions being treated as valid partial assignments, Jonathan Cape Ltd v Consolidated Press Ltd (1954) 1 WLR 1313 QBD, Messager v BBC Ltd (1929) AC 151 HL, Loew's Inc v Littler (No2) (1958) Ch 650 CA and Mother Bertha Music Ltd v Bourne Music Ltd (No2) (1997) EMLR 457 Ch D applied (see paras 34-39 of judgment). (2) The authorities, including Lucasfilm, which was concerned with the justiciability of claims for infringement of foreign copyright, did not support C's contention. Some of the reasons given in Lucasfilm for the non-justiciability of a claim for infringement of a foreign copyright could be relevant considerations in deciding the justiciability of a disputed claim to ownership of foreign copyright, but that case did not address that issue in the context of an English law contract conferring exclusive jurisdiction on the English courts, and nothing in that judgment diminished the force of the contractual provisions in the instant case, Lucasfilm considered (para.56). (3) C's submissions treated cl.18 as analogous to either a contractual option to terminate an agreement or to a situation of repudiatory breach of contract. Neither analogy was appropriate. Although cl.18 re-vested the copyright in W that did not instantly terminate all the contractual obligations: for example, the obligation to collect royalties from sub-publishers continued. W had not been faced with an election as in the case of a repudiatory breach or an option; they had not waived their rights to the reversion by reason of the circumstances surrounding the services of the notices, nor were their actions after the service of the notices relevant (paras 63-64, 74 and 77).