December 12, 2016

The claimant, Gloucester Place Music Ltd, sought declarations that the defendants, who comprised the current or former members of the pop group Duran Duran and their service companies, had acted in breach of various music publishing and associated agreements by serving a series of notices under s 203 of the United States Copyright Act 1976, terminating assignments to Gloucester Place of the US copyrights in 37 Duran Duran songs, or will be in breach if such notices are not withdrawn. The defendant members of Duran Duran denied that Gloucester Place was entitled to such declarations.

Mr Justice Arnold noted that whether the group members had breached, or would breach, the agreements by service, or non-withdrawal, of the notices depended on the correct interpretation of the agreements, which were governed by English law and conferred exclusive jurisdiction on the courts of England.

On 28 July 1980, each of the five members of Duran Duran had entered into a music publishing agreement with Gloucester Place that contained a worldwide assignment of copyright in works written or composed by the group member during the term of the agreement in return for the payment of advances and royalties. The initial term of the agreements was one year, with provision for extensions through a series of one year “option periods”.

Gloucester Place extended each agreement through two “option periods” until 1 June 1983 when the agreements were terminated through a series of letter agreements. They were so terminated so as to enable each group member to provide song writing and associated services in respect of future compositions through UK service companies and rest of the world service companies.

During the term of the agreements, the group members between them wrote the music and/or lyrics of 37 songs, including many of Duran Duran’s best-known songs, such as Girls on Film, Rio, Hungry Like The Wolf and Is There Something I Should Know?.

The s 203 notices were served by letters from the defendants’ representatives dated 11 March 2014 and 24 June 2014. The notices specified various effective dates of termination for the purposes of s 203(a)(4) in respect of the compositions. For some of the compositions, those dates had passed; for others, the specified effective dates fell between now and 2020.

In a nutshell, Gloucester Place argued that the group members had assigned their US copyrights to Gloucester Place for the full term of those copyrights and that, in the absence of any express reservation by the group members of the right of termination under s 203, the exercise of that right was precluded. The group members, on the other hand, said that the US copyrights that they had assigned were inherently subject to the right of termination and in the absence of any express prohibition upon the exercise of that right, the group members were free to do so. The dispute had arisen because the agreements did not explicitly address the issue in question, i.e. the exercise of the right of termination under s 203.

Arnold J found in favour of Gloucester Place. Interpreting the relevant clauses of the agreements, he found that the language would have conveyed to a reasonable person having the relevant background knowledge that the parties’ intention at the time the contract was entered into was that the “entire copyrights” in the compositions should vest, and remain vested, in Gloucester Place for the “full term” of the copyrights. That implicitly precluded the group members from exercising any rights under US law that would result in Gloucester Place’s ownership of the copyrights coming to an end before their expiry.

This interpretation was reinforced by the fact that the group members had promised not to transfer any interest in the copyrights to any other person, which Arnold J read in context as meaning any person other than Gloucester Place. In effect, what the group members had done by exercising their rights of termination was to transfer the reversionary interest in the copyrights from Gloucester Place to themselves. Although the doctrine of non-derogation of grant (which the group members argued did not assist Gloucester Place’s case) had not provided Gloucester Place with an independent route to this conclusion, it did support its interpretation of the agreements, Arnold J said. (Gloucester Place Music Ltd v Simon Le Bon [2016] EWHC 3091 (Ch) (2 December 2016) — to read the judgment in full, click here).