On Robin Ray v Classic FM, the High Court of England held that a contractor providing services owns the intellectual property of the materials created for the client. The decision is a useful guide for contractors, as it is one of the main cases in determining whether an intellectual property commissioner may use intellectual property for purposes not expressly contemplated in a written agreement.
Background
Mr. Ray was a highly respected classical music expert in England, reputed for having an encyclopedic knowledge of classical music. He was hired by Classic FM in the UK in 1991 to compile the radio station’s repertoire, compile playlists, categorize tracks for playlists, and rate his popularity in each of the categories. The contract does not deal with intellectual property rights. The consulting contract was originally for 11 months, however, Mr. Ray’s work was beneficial to Classic FM, and his services were extended until 1997. Eventually, some 50,000 tracks were categorized. The results of the work were incorporated into a database that was used to select music on a rotating basis and avoid excessive reproduction.
The project was a success. After internal use for approximately 5 years, Classic FM proposed to license the database to foreign companies. Mr Ray objected and initiated proceedings to prevent Classic FM from authorizing use outside the UK without his permission, on the grounds that he was the author of the documents that were added to the database.
The Superior Court decision
Superior Court Judge Lightman ruled that, in the case of a consultancy, the author retained the copyright in the absence of an express or implied term to the contrary. When a consultant’s services are performed for an express purpose, a court will easily imply a term in a service contract that the client is entitled to use for that purpose. In this case, Classic FM always intended to use Mr Ray’s work in the UK. It wasn’t until 1996 that Classic FM intended to exploit Mr. Ray’s work abroad. The court was not willing to imply a license in the contract that Classic FM would have the right to exploit its work abroad. Classic FM was prevented from exploiting its database abroad without the consent of Mr. Ray, which would require payment of license fees.
By implicating licenses in this way, a court will only go as far as is necessary in the circumstances to enforce the intention of the parties. If the granting of a license is required, the scope of the license shall be the minimum required to give effect to the intention of the parties at the time of the contract. An implied term in which copyright would be assigned to a customer will be exceptionally rare, as most of the time an exclusive license will have the same effect in law.
The judge held that the contractor retains copyright in the absence of any express or implied term to the contrary. The contract may expressly state which party is entitled to copyright, and the mere fact that the contractor was commissioned – performed by a contractor – is insufficient to grant copyright rights to the client. In the absence of express rights, the client is left to establish a right under the express or implicit term of the contract.
Conclution
The decision means that the contractors retain the copyright in the absence of an express or implied term. An implied license must be reasonable and equitable; necessary to give commercial effectiveness to the contract, susceptible of clear expression and not contrary to any express term of the contract, and so obvious that it goes without saying. Ownership of intellectual property rights and licenses to use the rights should not be left to chance; it is preferable to unwanted implicit licenses that allow a customer to use a work and instead provide the stated purposes for which the use can be made at the beginning of the contract. Therefore, it is important to document the purposes of the engagement and the intended use for the copyrighted work created during the course of the engagement.
