My article, Documenting Death is in a Time Warp, has now been published by the Law Society Gazette.
When he receives his copy, he skims the contents page looking for an article that focuses on practice-based issues in the field of IP or commercial law. Often he finds nothing of interest. Many of the articles seem to be academics talking to one another, and citing one another, in a closed loop.
The latest edition – volume 39 No 1 March 2019 – is different. It includes an article reporting on empirical research about the use of the small claims track (SCT) of the Intellectual Property Enterprise Court. It seems that this track or court is favoured by professional photographers to claim royalties for use of their photos without permission.
The correct citation for the article is: Cooper E, Burrow S (2019) Photographic copyright and the Intellectual Property Enterprise Court in historical perspective. Legal Studies 39, 143-165. IP Draughts doesn’t know whether the article is available to non-members, but with the trend to open-access scholarship he hopes it will become generally available soon.
The authors are from the School of Law of Glasgow University. The article is stated to be partly based on Sheona Burrow’s unpublished 2017 PhD thesis, Access to Justice in the Small Claims Track of the Intellectual Property Enterprise Court (IPEC): An Empirical Enquiry into Use by Creative SMEs.
The article is topped and tailed with a suitably academic focus on the theoretical framework for ‘property rules’ and ‘liability rules’, and with a discussion of certain historical developments on the subject of newspapers paying photographers for use of their photos. For IP Draughts, who is not part of the academic world, these discussions are of only passing interest, though he notes that the former topic is reminiscent of the Manchester Manifesto, mentioned briefly in an early article on this blog.
Where the article comes to life for IP Draughts is in its analysis of the cases brought in the SCT between October 2012 and 31 December 2015. Such cases do not usually make it on to BAILII, his usual source for reported case law, presumably because they are considered of low importance. And yet, anyone advising a client on an IP infringement matter in England and Wales needs to understand what the SCT is for, how it works, and how it is different from larger cases brought in the fast track and multi-track of IPEC, or even larger cases brought in the Chancery Division (including the Patents Court).
Here are a few points, in no particular order, that jumped out from a lengthy and thoughtful article:
- During the period studied, 261 claims were dealt with by SCT, of which 79% concerned copyright infringement. Of these, a majority (144) concerned the infringement of photgraphic copyright, of which 133 were about unauthorised use of a photo on a website. 122 of the claims (46% of the total of 261) were by freelance professional photographers or their agents.
- The SCT is the forum of choice for such photographers. It replaced an earlier route that they tended to choose, which was to issue an invoice for unpaid royalties and then bring a money claim in the County Court.
- In the vast majority of cases, the photographers were successful in their claims. They tended to seek damages rather than an injunction.
- These actions often involve claims of breach of moral rights as well as copyright. For example, it has been held in SCT cases that the right of attribution is breached when metadata is stripped out from the online image.
- Damages are often calculated by reference to a “going rate”. In some cases there is an uplift for flagrant breach, often by way of a 100% uplift on damages.
IP Draughts would be interested to read Dr Burrow’s PhD thesis. He idly wonders why there isn’t a branch of high-quality scholarship that avoids all the baggage of the “academy” and just focuses on research that affects practical issues.
IP Draughts first posted the article linked below four years ago, when he was in Australia, and he reblogged it two years ago. It is worth posting again, as the subject – royalty-stacking clauses in licence agreements – is evergreen.
If you are now ready for that lecture on the architecture of Melbourne bungalows, do let IP Draughts know…
This is the third in a series of articles that proposes a set of standard terms for IP licensing as part of a commercial code. When IP Draughts started this exercise, he tried to track the sequence of clauses in the UK Sale of Goods Act 1979 (SGA).
Now that we are in the middle of the SGA, IP Draughts is finding it more difficult to follow the SGA’s sequence of provisions. Contracts for the sale of goods raise some significantly different issues to IP licensing.
Once the exercise is complete, he will review the entirety and may well restructure it. But for now, let’s see where we get to. As before, this is not a finely-honed set of proposed terms. It is just a rough first draft for discussion. Following a suggestion on an earlier list, it is assumed that somewhere else in the code is a general statement that the parties can agree different terms in their licence agreement.
- Improvements and new IP. There is no implied term in a licence agreement that the licensor will communicate to the licensee any improvements to the [subject-matter of the licence agreement] made after the date of the licence agreement. Nor is there any implied obligation to license any new IP created by the licensor in respect of such improvements.
- Dealing with infringers. (1) In an exclusive licence agreement, at the request and cost of the licensee, the licensor shall take, or permit the licensee to take, reasonable action against third party infringers of the licensed IP. Where the exclusive licence is limited by field, such action may only be taken in agreement with the licensor and its licensees outside the field. After deduction of all legal costs, any damages or monies paid in settlement of infringing activities in the licensee’s field will be for the licensee’s account and will be subject to any royalty or other obligations to the licensor as if the damages or settlement payment were the sales revenue of the licensee. (2) In a non-exclusive licence agreement, the licensor has no obligations to take action against infringers and has no responsibility for any losses suffered by the licensee as a result of such infringement.
- Activities by purchasers from licensee. (1) Where a licensee supplies to third parties (“purchasers”) goods or services under an IP licence, whether by way of sale, gift or other permitted transaction, the licensor may not bring action against purchasers or their successor in title (direct or indirect) of those goods or services for infringement of the licensed IP arising from the [legitimate] use of those goods or services. (2) Where any goods and services described in sub-section (1) are sold subject to an express contractual restriction on their use, the provisions of sub-section (1) do not prevent the licensor from bringing action for infringement against anyone who is bound by such a restriction in respect of use that breaches the restriction.
- Independence; third party claims. Where a licensee develops, markets, sells or supplies products or services under a licence, or conducts other activities under a licence, the licensee acts on his own account and not as an agent, representative or partner of the licensor. Accordingly, the licensee must indemnify the licensor in respect of any claims against the licensor by a customer or other person that concern the licensee’s use of the licensed IP, except to the extent (if any) that the claim arises from a breach by the licensor of a term (express or implied) of the licence, or arises from a contractual indemnity given by the licensor to the licensee.
- Good faith. The parties to a licence agreement are under a general duty to act honestly and in good faith in their dealings with one another. The duty of good faith does not imply any prohibition on a party developing or commercialising goods, services or intellectual property that compete with the licensed IP or with goods or services supplied under the IP licence.
- Assignment of licence agreement. (1) The licensor may not assign the licensed IP to a third party except on terms that the assignee agrees to be bound by the licence agreement and perform all of the obligations on the licensor under the licence agreement, including passing on these obligations to its successor in title to the licensed IP. (2) A licence agreement is personal to the licensee, and accordingly the licensee may not assign or transfer any of its rights or obligations under the licence agreement.
- Subcontracting. A party to a licence agreement may subcontract the performance of any or all of its obligations under the licence agreement, provided that such party remains liable to the other party for that performance. Subcontracting may not, however, be used as a disguised way of sublicensing or assigning a party’s rights or obligations in breach of any express or implied terms of the licence agreement.
- Sublicensing. A licensee does not have any implied right to grant sub-licences under the licensed IP. But this provision does not affect the rights of a purchaser as described in [section 23] of this code.
- Duration and termination of licence. There is an implied term in a licence agreement that, unless the licence agreement states when it will expire, an IP licence may be terminated [by the licensee] [by either party] on reasonable notice. This implied term does not affect any express rights of termination stated in the licence agreement such as for breach or insolvency.
- Consequences of termination. Upon termination of a licence agreement, all licences provided for in the licence agreement automatically terminate.
No doubt some of these terms will be thought controversial. IP Draughts is interested to hear readers’ thoughts.
More to follow…