Friday 30 July 2010

The cost of a Hendrix covermount

On 20 September 2006 the Sunday Times was distributed with a covermount CD of Jimi Hendrix’s legendary last UK concert at the Albert Hall in 1969. Experience Hendrix (Hendrix’s family’s company) and The Last Experience (the company of Jerry Goldstein, who recorded the concert) successfully asserted title to the band’s performance rights and the copyright in the recordings of the concert in a summary judgment in 2008. The question Sir William Blackburne has decided today is what damages Times Newspapers should pay.

Blackburne J was clear the defendant did have reasonable grounds to know that it was infringing as Experience Hendrix had challenged them prior to publication, though the paper was not recklessly indifferent to the problem – so damages would not be increased by reference to flagrancy or ‘moral prejudice’. Article 13 of the Enforcement Directive (2004/48/EC) sets out different damages regimes depending on the defendant’s knowledge, though it seems unclear that this altered the judge’s calculations.

At the time of the covermount the claimants were themselves intending to release a film of the concert plus accompanying DVD, CD and merchandising. Following the covermount this project was put on hold because (1) the claimants wanted a declaratory judgment that they owned the rights because (a) the rights dispute could scare off their project’s commercial sponsors and (b) the Sunday Times’s ultimate licensor, Charly, could go and do more damage elsewhere and (2) the covermount had spoiled the market for the claimants’ products. The judge was not convinced by the defendant’s arguments that (i) the problem with Charly existed irrespective of the covermount and (ii) the defendants could not be blamed for the effects of the claimants’ decision to suspend their project if that had been misjudged.

The judge held that:

1. If there had been no covermount the claimant’s project could have been launched in July 2007 though given the lack of urgency about the project September was more likely.
2. The delay caused to the claimants by the covermount distribution was one year. The claimants obtained declaratory relief in February 2008 and the spoiling of the market by the covermount was also no obstacle by February 2008 (if indeed the market had been spoiled at all).
3. The claimants could expect to be compensated in relation to the effect on their normal exploitation of the rights (was the claimant in the business of selling copies or licensing rights?). Here the claimants were planning to release a film etc, so those losses should be assessed.
4. The damages could cover economic loss outside the UK in as much as it stemmed from the infringement of UK copyright.
5. Quantum: difficult as the claimants have not yet gone ahead with their project. It was uncertain whether they would make any less money because their project had been delayed.
6. The covermount deprived the defendants of $5.8 million for 12 months.
7. The loss the defendants incurred by having the receipt of this sum delayed would be US base rate + 1% on $5.8 million over one year. That was considerably less than the sum the claimants were looking for.

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