British and Irish Legal Information Institute

Freely Available British and Irish Public Legal Information

[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]

England and Wales Court of Appeal (Civil Division) Decisions

You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Crosstown Music Company 1,LLC v Rive Droite Music Ltd & Ors [2010] EWCA Civ 1222 (02 November 2010)
URL: http://www.bailii.org/ew/cases/EWCA/Civ/2010/1222.html
Cite as: [2012] Ch 68, [2011] EMLR 7, [2011] ECDR 5, [2011] Bus LR 383, [2010] EWCA Civ 1222, [2011] 2 WLR 779, [2011] FSR 5

[New search] [Printable RTF version] [Buy ICLR report: [2011] Bus LR 383] [Buy ICLR report: [2012] Ch 68] [Buy ICLR report: [2011] 2 WLR 779] [Help]

		Neutral Citation Number: [2010] EWCA Civ 1222
		Case No: A3/2009/0811

IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
THE HON MR JUSTICE MANN
HC07C01296

Royal Courts of Justice
Strand, London, WC2A 2LL

02 /11/2010

B e f o r e :

LORD JUSTICE MUMMERY
MR JUSTICE MORGAN
and
SIR PAUL KENNEDY
____________________

Between:

	CROSSTOWN MUSIC COMPANY 1,LLC	Appellant
	- and -
	RIVE DROITE MUSIC LIMITED MARK TAYLOR PAUL BARRY	Respondent

____________________

MR NIGEL TOZZI QC and MR ANDREW HUNTER (instructed by Messrs Russells) for the Appellant
MR IAN MILL QC and MR EDMUND CULLEN (instructed by Messrs Forbes Anderson Free) for the Respondents
Hearing dates: 27th & 28th May 2010
____________________

HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

Lord Justice Mummery:

The main issues

This litigation is about the ownership of the United Kingdom copyrights and the foreign copyrights in 119 songs. The claimant is an American music publishing company seeking a declaration of title. It acquired the copyrights in 2006, not direct from the defendant songwriters, but by purchase from the defendant publishing company, to which the writers had initially assigned their copyrights under a succession of songwriting agreements between 1994 and 1998. The claimant is successor to the original publishing company under the agreements.

Under those agreements the writers assigned, for limited periods, their rights in songs written or co-written by them. The consideration included a nominal price of £1 and payment of advance royalties. The writers were entitled to bi-annual accounts and to payment of a share of the profits generated by exploitation of the songs. The songwriting agreements were assignable. The agreements were expressed to be subject to English law. They conferred exclusive jurisdiction on the English courts. The contractual term at the heart of this case made provision for the automatic reverter of the copyrights to the writers in the event of material breaches of the relevant agreement that had been notified, but not remedied. Publishing agreements commonly include a term of this kind: see Laddie, Prescott & Vitoria:The Modern Law of Copyright (3^rd ed) paras 24-45 and 24-46;and The Encyclopaedia of Forms & Precedents (5^th Ed 2010 Reissue) Vol 21(2) Form 18 clause 1.2.1, Form 201 clause 9.3.1 and Form 209 clause 11.2.1 .

The trial judge (Mann J) made an order on 25 March 2009 dismissing the claims against the songwriters and declaring that, as a result of unremedied material breaches of the agreements and the automatic operation of the reverter clause, the copyrights in the songs scheduled to the court order reverted to the writers on the respective dates specified, being the dates on which the relevant notices of the breaches of the songwriting agreements expired (22 May 2007 in the case of Mark Taylor and 6 June 2007 in the case of Paul Barry.) In his judgment [2009] EWHC 600 (Ch) and in the order containing the declaration the judge drew no distinction between the United Kingdom copyrights and the foreign copyrights.

This appeal, for which the judge granted limited permission, is on two principal points of law.

The first is the interpretation of s90(2) of the Copyright, Designs and Patents Act 1988 (the 1988 Act) which governs the transmissibility of rights under the 1988 Act. In support of the appeal it is argued that the automatic reverter clause in the songwriting agreements was legally ineffective under s90(2), being contrary to the common law principles of personal property and outside the scope of dealings permitted by the legislation, which states that copyright is transmissible as personal or movable property and that

"90 (2) An assignment or other transmission of copyright may be partial, that is limited so as to apply-

(b) to part, but not the whole, of the period for which copyright is to subsist.."

In brief, the interpretation of the section rejected by Mann J and served up again in this court is that, to be within s90(2), an assignment must at its outset be for a known, fixed and certain period. If that is correct, it follows that it is legally impossible to have a valid and effective automatic reverter of rights contingent on the occurrence of an uncertain future event, such as an unremedied breach of contract. This argument leads to the conclusions that (a) the reverter clause in the song writing agreements can only take effect as a contractual obligation to re-assign the copyright in the events specified and (b) the claimant takes free of that contractual obligation, as it was not a party to the songwriting agreements and was not subject to any relevant equities.

The second legal point is jurisdictional. To what extent are disputes relating to foreign copyright justiciable in the English courts? The most important of the authorities cited is the recent decision of this court in Lucasfilm Ltd v. Ainsworth [2009] EWCA Civ 1328; [2010] 3 WLR 333 (Lucasfilm). That case was decided by Mann J at first instance and it was considered by him in the judgment under appeal, but the appeal in Lucasfilm was not heard until after Mann J gave judgment in this case.

The Court of Appeal reviewed all the authorities and clarified the law on the jurisdiction of the English courts to hear and determine intellectual property cases. It was held that, unless the copyright in dispute is that created by the law of a Member State of the Brussels Convention, the English courts have no jurisdiction to determine a claim for the infringement of foreign copyright. Rather surprisingly it is the claimant who has taken the point of non-justiciability in its own proceedings for a declaration by the English courts of its title to the disputed rights without any territorial limit.

Along with those two principal points, but still within the scope of the limited permission to appeal granted by Mann J, is a range of issues turning on the application of "election and related principles" (i.e. waiver, acquiescence and estoppel) to the facts found by the judge. They are relied on to support the proposition that the Writers elected not to claim or to abandon their rights to a reverter or a re-assignment of the copyrights, or are otherwise precluded from asserting their rights.

The judge refused permission to appeal against his factual findings that there were material breaches of the songwriting agreements.

Facts and proceedings in outline

The claimant is Crosstown Music Company 1. LLC (Crosstown), a company incorporated under the laws of the State of California. It acquired the rights in the disputed songs under the terms of an assignment dated 19 July 2006 (the Assignment). Crosstown paid about US$10m for the copyrights and the rights under the songwriting agreements to the first defendant, Rive Droite (RD), a music publishing company. RD was put into administration in October 2007 owing very large sums to the songwriters. Although RD was joined as a defendant to Crosstown's proceedings, it has taken no active part in them, or in this appeal. From at least October 2006 onwards Crosstown began actively to exploit the songs, to collect income in respect of them and to render statements of account. The songwriters have accepted payment of royalties from Crosstown, while asserting the effectiveness of the automatic reverter of the copyrights to them.

The songs in question were written and composed by the second and third defendants, Mr Mark Taylor and Mr Paul Barry (the Writers) in the 1990s. They are the active respondents to the appeal. The songs were written under a succession of songwriting agreements in similar terms entered into by them with RD between 1994 and 1998. There were 6 agreements in all, consisting of three agreements in the case of each Writer. The Writers assigned to RD the copyright in the relevant songs "throughout the universe" for an initial 2 year period, followed by a 25 year "Retention Period", after which the rights reverted to the respective writer "without further formality" (clause 4(b)).

There was also a provision for the prior automatic reversion of the copyright to the Writers in circumstances of a material and unremedied breach of the relevant agreement notified by the Writers. The reverter provision became a live issue as a result of ongoing disputes between the Writers and RD from about 2000. The disputes were about late accounting and about the shortcomings in the accounts revealed by successive audits. They affected the amount of the payments due to the Writers. There was earlier litigation between the Writers and RD in the Chancery Division and in this court arising out of audit reports by the royalty auditors, RCO. In those earlier proceedings the Writers made no claim to the reversion of copyrights under clause 18(a) set out below. Notices under the agreements were served on RD in December 2002, February 2003 and May 2006 alleging under-accounting. In September 2006 a further audit was carried out, this time by a Mr Bevis, who identified failures by RD to account to the Writers.

The crucial term in the songwriting agreements provides that-

"18. Breach or liquidation

(a) In the event that the Publisher [RD] shall be in material breach of the terms of this Agreement and shall fail to take all reasonable action to remedy such breach within [45 days in the case of Mr Taylor] [60 days in the case of Mr Barry] of written notification in reasonable detail of such breach from the Writer all rights assigned to the Publisher hereunder shall forthwith revert to the Writer.

(b) In the event that the Publisher shall go into liquidation, other than for the purposes of re-organisation, then all rights assigned to the Publisher hereunder shall, to the extent permissible under law, revert to the Writer on the day immediately preceding such event."

On 4 April 2007 the Writers, relying on clause 18(a) of the relevant songwriting agreements and on various alleged material breaches of contract by RD, served on RD, and sent to Crosstown, notices (called "Cure Notices") requiring reasonable action to be taken to remedy all the specified breaches relating to unremedied accounting deficiencies and other matters. Failing that, the Writers would contend that there was an automatic reverter of the copyrights to them, regardless of the Assignment to Crosstown in July 2006. The alleged breaches included the RCO audit report matters, the Bevis audit matters and complaints that RD affiliates had not accounted properly after 1 July 2006.

The judge found that there were material breaches, that they had been duly notified by the Cure Notices and that RD had failed to take reasonable action to remedy the breaches. He rejected Crosstown's contentions that the Writers had lost their rights (if any) to serve the Cure Notices by virtue of the application of election and related doctrines.

In the case of RD's alleged breaches in failing to account for income from affiliates Mann J considered that the Cure Notice did not specify the breach in "reasonable detail" as required by clause 18 (a) and so could not be relied on in the context of the Cure Notices: see paragraphs 139-142. That finding is the subject of a respondents' notice by the Writers.

In its proceedings issued on 17 May 2007 Crosstown sought an order against RD for specific performance of the Assignment by accounting properly to the Writers, an indemnity and damages for breach of warranty. Against the Writers Crosstown sought a declaration that the rights had not reverted to the Writers, but were owned by Crosstown, which disputed the effectiveness of the Cure Notices and the automatic reverters under clause 18(a). The Writers counterclaimed for a declaration that the Cure Notices were valid and for relief for infringement of copyright and unjust enrichment in respect of the activities of Crosstown after the Cure Notices took effect. It was agreed that the counterclaim could not be dealt with in advance of the judge's decision on the Cure Notices and the automatic reverter. The order of 25 March 2009 was stayed for an agreed period to allow negotiations between the parties, with liberty to apply for further directions thereafter. This appeal has not therefore been concerned with the counterclaim for infringement and other relief against Crosstown.

In dismissing Crosstown's claim the judge held that the rights had automatically re-vested in the Writers by virtue of the terms of clause 18(a) of relevant agreements. On the appeal Crosstown contends that the judge wrongly construed s90 (2) of the 1988 Act so as to cover an assignment of copyright for a period that was not fixed or certain, was unknown and could not be known at the date of the original assignment. It is submitted that he ought to have held that there were no automatic reverters of the copyrights under clause 18(a) and that he wrongly granted declarations of title to the United Kingdom rights and the foreign rights.

Crosstown also contends that the judge wrongly rejected its argument that the Cure Notices had not been given within a reasonable time of the breaches. He ought to have held that the Writers had lost the right to serve the Cure Notices, having elected to continue the agreements rather than claiming reverter of the copyrights, and having, by their conduct, waived, abandoned or foreborne from asserting, the reverter of the copyrights.

A substantial part of the trial was taken up with evidence and argument on issues that do not arise on this appeal. The judgment under appeal sets out in careful and clear detail the facts, the submissions and the rulings on the issues whether there had been material breaches, whether "reasonable detail" had been given in the Cure Notices of the alleged breaches, and whether Crosstown had taken reasonable steps to remedy the breaches. For the purposes of this appeal it is unnecessary to repeat or even to refer to most of those matters. I will concentrate on the main points raised on the appeal in the following order.

A. Automatic reverter.

In its submission that no automatic reverters have occurred, Crosstown points to two possible interpretations of clause 18(a).

The first is that the clause created a contractual obligation on the part of RD to re-assign the copyright to the Writers on the occurrence of specified events or conditions. In that case the clause did not bind Crosstown, because it was not a party to the songwriting agreements containing the clause and did not acquire the copyrights subject to equities.

The second interpretation, which was accepted by the judge, is that clause 18(a) created what has been described in the arguments (rather unhelpfully, in my view) as a "floating reverter." The expression has been coined to describe a property interest in the copyrights. The effect of the reverter (if legally valid) would be that, when the specified contractual conditions were fulfilled, the Writers, without the need for the execution of a re-assignment of the copyrights, would regain them automatically. The automatic re-vesting would bind not just RD, as an original contracting party, but also Crosstown as successor in title to RD and its copyrights.

Crosstown advances the general proposition that it is impossible at common law and under the 1988 Act to make a valid assignment of copyright for a period that is not fixed, certain or known at the date of the assignment. It is therefore impossible to create a reversionary property interest (or "floating reverter") in such circumstances so that, in specified circumstances, the copyright is automatically regained by the original assignor. Such a provision can only take effect as a contractual obligation to re-assign the copyright. In the absence of a legal re-assignment of the copyrights, the original assignor will be only an equitable assignee of the rights to be re-assigned.

The submission is developed on several fronts. It is argued that, as a matter of principle and in the interests of the policy of ensuring legal certainty, personal property (as distinct from real property) is indivisible "temporally" into legal estates. Successive legal interests in personal property for uncertain periods of time are not legally recognised (as distinct from successive equitable interests under an inter vivos or testamentary trust). Copyright is intangible personal property. It is accepted that the 1988 Act is the relevant governing law, but submitted that the legislation must be construed against the general background of the common law principles of personal property. Section 136 of the Law of Property Act 1925 is referred to for the proposition that only an absolute assignment of the whole of the legal interest in a chose in action is effective at law to pass title. The common law principles of personal property and the general principles of the law of assignment of choses in action are relied on as the appropriate legal background and the setting-off point for the construction of the provisions of the 1988 Act that govern the ownership and transmission of copyright as a species of intangible personal property.

As for the 1988 Act, it is contended that the automatic reverter of copyright on an unidentifiable and uncertain future event does not fall within the transmissions of copyright allowed by s90. Copyright cannot, it is argued, be validly assigned for a part of the period of copyright, if the change of ownership on reverter during the term of copyright depends on an uncertain contingency, such as a breach of contract, that may never occur and is liable to be disputed with resulting uncertainty. To be effective the part of the period for which the rights can be assigned must, at the time of the assignment, be absolute, fixed, certain and known. That should appear to be so from the language of the assignment, which must indicate that it is an absolute assignment. In brief, in order to be valid, the date of the reverter event must be fixed and certain from the outset.

This way of putting the case is so novel and ingenious that it did not occur to the pleader, since there was, as the judge pointed out, no hint of it in the pleadings which "seem to presuppose the operation of the automatic vesting rather than the contractual analysis", or to Crosstown's counsel (not Mr Tozzi QC at that stage), who did not mention it in his opening at the trial. It surfaced late in the trial at the beginning of the final speech for Crosstown.

The judge first considered the matter on the footing of the construction of the songwriting agreements. He concluded that, as a matter of construction, all the songwriting agreements purported to provide for an automatic re-vesting of copyright on the events described in clause 18(a). He said that the clause seems clear in its terms, being couched in the language of automatic vesting rather than of a future covenant to re-assign. That was strengthened by the provisions of clause 18(b) providing for a retrospective vesting in the event of the publisher's liquidation. He rejected the submission that the "absolute" nature of the assignments in the songwriting agreements was inconsistent with the existence of any reversionary interest in the copyright. He also rejected the submission that the inclusion of foreign copyrights in the agreements was a factor affecting the construction of clause 18(a).

Next, Mann J considered Crosstown's points, which were also unpleaded, but raised general questions of law on which the Writers had an opportunity to make submissions, that the purported effect of clause 18(a) found by the judge was one which could not exist as a matter of English law and that there was no evidence that foreign copyright laws allowed automatic revesting. In those circumstances the most that the Writers could have was the benefit of an agreement to re-assign. After considering legal submissions on the common law on successive interests in personal property and on the construction of s90 of the 1988 Act applicable to assignments of copyright, the judge concluded

"79. That [s90(2)] plainly provided for a reverter on an identifiable future date, as indeed is the case under the main assignment provisions of the agreements which provide for the copyrights to be assigned for a period plus a 25 year retention term. On the expiry of that longer period the copyrights revert. That is within the section, and nobody contended otherwise. What clause 18(a) provides is for an earlier reverter. I do not see why that does not fall within section 90(2) if it needs to. Mr Hunter argued that the period of time referred to in the subsection had to be a term certain, but there is no justification for that on the wording of the section and I cannot see any justification in principle for it either. I therefore reject the submission.

80. It therefore seems to me that in relation at least to English copyrights the provisions of clause 18(a) of the various agreements are capable of operating according to their tenor to re-vest the copyrights in the Writers…"

The judge went on to consider Crosstown's submissions on the court's jurisdiction to decide on the reverter of the foreign copyrights, another aspect of the reverter point which emerged for the first time when Mr Hunter began his final speech as counsel for Crosstown. Mr Hunter submitted that foreign copyright was non-justiciable in the English courts. So the judge could not decide whether or not there had been an automatic reverter of foreign copyrights.

The judge observed that Crosstown's claim for a declaration drew no distinction between English and foreign copyrights in this respect nor did the Writers' defence and counterclaim. The case had proceeded on the assumption that all copyrights were to be treated similarly. The question of foreign copyrights had not been addressed by anyone and no evidence of foreign copyright law was adduced.

The judge held that Mr Hunter's submissions amounted to a late departure from the pleaded case and that to accede to them would be a course of action which would be unfair to the Writers. They had approached the case on the footing of an apparent claim that the reverter under clause 18 was effective, if the conditions for operating that clause were fulfilled. Crosstown had brought the proceedings to have the current position on title to the rights established on the footing that all copyrights could be treated alike and without pleading the relevance of the foreign copyrights. In those circumstances the judge declined to allow Crosstown to raise the foreign copyright issue at that late stage. He refused to allow it to contend that the effect of clause 18 might be different in relation to different national copyrights. He decided the case with no distinction being drawn between English and other copyrights for the purposes of the operation of clause 18 (paragraphs 87-90).

I agree with Mann J's construction of clause 18(a). It is not an agreement to re-assign the copyright in the future. It is worded as an automatic reverter provision, so that the re-vesting takes place forthwith on the fulfilment of the conditions and without the need for the execution of a re-assignment or other transfer to the Writers. I also agree with him on the other aspects of the reverter issue. I will add some general comments, as well as some more detailed points, arising out of Crosstown's submissions that the judge had reached the wrong conclusions on the construction of clause18(a) and of s90(2). I will concentrate at this stage on the general question of the effectiveness of the automatic reverter provision in clause 18(a).The question of the jurisdiction of the English courts to decide disputes relating foreign copyrights is left for later discussion.

First, to begin at the beginning, the nature of copyright is central to the case. It is property. It is the offspring of the 1988 Act, not an obligation created by a contract. Although the statutory requirements of an assignment of a legal chose in action are to be found in s136 of the Law of Property Act 1925, in the case of copyright assignments the 1988 Act is the relevant legislation. It does not limit valid legal assignments of copyright to absolute assignments. It expressly permits assignments to be for part of the period of copyright. An assignment of a part of the copyright is an assignment of less than the whole of the copyright. It is commonly called a partial assignment. The key question is whether an assignment of copyright, which is subject to automatic reverter in the event of an unremedied notified material breach of contract prior to the expiration of the period of copyright, is a form of partial assignment permitted by s90. The common law rules of personal property, even assuming them to be what Crosstown says they are, are no more relevant to the determination of that question than are the provisions of s136 of the 1925 Act.

Secondly, the terms of the legislation are critical. Turning to s90, Crosstown cannot point to anything in the wide wording of the section that expressly limits the right of an owner to make a partial assignment of copyright for a period that is fixed, certain and known at the outset, or which expressly prohibits automatic reverter at a future date that is not known at the date of the assignment containing the reverter provision It is true that the section does not in terms mention the particular possibility of an assignment for a period that is uncertain and unfixed or of an automatic reverter. However, it does not follow that they are legal impossibilities. The question is what is allowed on a reasonable reading of the language of the legislation. It allows in general terms for an assignment of copyright limited in fact to a period of less than the full period of copyright. It seems to me that an assignment, under which the period granted terminates on, for example, a future event such as a breach of contract, fits in the ordinary meaning of the words of the section.

Thirdly, considerations of principle and policy are also relevant. The need for certainty on matters of title and ownership feature prominently in Crosstown's submissions, but they are not so powerful that they impliedly cut down the width of the language of s90. As an item of property, copyright can, in principle and in the absence of an express restriction on its assignability, be disposed of in any lawful way that the owner of it wants. There have been instances of express restrictions on the ability to assign copyright. For example, there were provisions in the Copyright Act 1911, which were preserved in the Copyright Act 1956 for pre-1956 Act dealings, that, subject to exceptions, placed an express limit on the power of the first owner of the copyright to assign it for the full period of copyright. It was provided that the last 25 years of the copyright were not assignable by the first owner. There was much litigation in the English courts in the 1970s about the devolution and ownership of those reversionary rights in the last 25 years of the copyright: see Redwood Music Ltd v. Francis, Day & Hunter Ltd [1981] RPC 337; Redwood Music Ltd v. Chappell & Co Ltd [1982]RPC 109; and Redwood Music Ltd v. B.Feldman & Co[1979] RPC 1. Those cases are not directly relevant to the issue in this case, but they show that reversionary rights in copyright outside the area of trusts have been recognised and that for policy reasons the legislation may impose express restrictions on assignments of copyright. There are no express restrictions applicable to this case. There are no good grounds of principle or policy for implying them.

Fourthly, the authorities. Nothing is disclosed in the authorities to support Crosstown's interpretation of s90, either on that section or on the equivalent transmission provisions in the earlier Copyright Acts of 1911 and 1956. Quite the contrary, in fact. Jonathan Cape v. Consolidated Press [1954] 1 WLR 1313 is an example of an agreement providing for its termination in the event of the liquidation of the publishers or their wilfully failing to comply with the contractual conditions and leaving the author free to license the copyright to any other person. It was held to be a valid partial assignment of copyright. Other examples of valid automatic reverter provisions and an assignment for a period that was not fixed and certain at the outset being treated as a valid partial assignment, rather than a contractual obligation to re-assign the rights, are Messager v. BBC [1929] AC 151 at 155-156; Loew's Inc v. Littler[1958] Ch 650 at 663 following Messager; and Mother Bertha Music Ltd v. Bourne Music Ltd [1997] EMLR 457 at 479-480.

In my judgment, the judge correctly decided that the automatic reverter provisions in the songwriting agreements were compatible with the partial nature of the assignments of copyright permitted under s90 of the 1988 Act. There is nothing in the 1988 Act, or in any other Act, or at common law to prevent the automatic reverter provisions from taking effect according to their agreed terms.

That is sufficient to dispose of the arguments against the validity of automatic reverters of copyright in this case. Crosstown accepts that even if, on its analysis, clause 18 has no effect as an automatic reverter on a partial assignment of copyright, it has some contractual effect. Crosstown's analysis of clause 18 is that it should be construed as an absolute assignment, rather than a partial assignment, coupled with a contractual obligation on the part of RD to re-assign the rights to the Writers on the occurrence of the specified breach of contract. However, Crosstown submits that the contractual obligation does not bind it. It does not plead that it is a bona fide purchaser without notice of the reverter provision. Its case is that it was not a party to the agreements and that it acquired the copyrights from RD in July 2006 before the Writers served the Cure Notices under clause 18(a) on 4 April 2007. The Writers only had contractual rights against RD. The assignment by RD to Crosstown was not subject to any relevant equity in the Writers, as no relevant Cure Notice had been served at the date of the Assignment to Crosstown in 2006. The Writers have no claim against Crosstown to either the United Kingdom copyrights or to the foreign copyrights. Their claim is against RD for damages for breach of contract.

The judge did not express any conclusion on these alternative submissions and, in my view, it is neither necessary nor desirable for this court to express concluded opinions on matters that do not arise for decision. It is more sensible to spend time and effort concentrating on the points that have to be decided than to fill this judgment with dicta that may inconvenience the parties and embarrass the courts in future cases in which a decision on the points is unavoidable.

B. Justiciability of foreign copyright disputes

The justiciability issue arises only in connection with the foreign copyrights. Crosstown submits that the judge should have concluded that the issue of subsistence of foreign copyright, of which ownership is said to be a feature, is governed by the relevant local law and is not justiciable in the English courts; that the judgment of this court in Lucasfilm is binding and determinative of that issue; and that the judge erred in granting declarations covering title to foreign copyright. He should have dismissed the Writers' counterclaim for declarations and infringement of foreign copyrights. Further, he reached his conclusion in respect of foreign copyrights without any evidence as to any foreign law and that was an error of approach on his part. As for his objection that the foreign copyright point had not been pleaded, the point is one of jurisdiction that does not have to be pleaded.

These submissions first need to be viewed in the setting of the proceedings. They are Crosstown's proceedings initiated by it on the basis that, in determining the title dispute, no relevant distinction was drawn between the United Kingdom copyrights and the foreign copyrights. The Writers' counterclaim proceeded on the same basis. The focus in the claim and in the counterclaim was fully on whether the reversion of any copyright had occurred at all, not on side issues about foreign copyrights or possible differences between title to them and title to the United Kingdom copyrights.

For the first time in counsel's closing speech at trial Crosstown raised the point that the court could only deal with the United Kingdom copyrights and that the automatic reverter of foreign copyright was a question of the foreign law applicable to each copyright. Foreign law would not be precisely the same as English law. It was submitted that the judge could not make a finding as to foreign copyrights, as the English courts have no jurisdiction over questions of foreign copyrights.

Mann J observed that the pleadings had not drawn any distinction between United Kingdom copyright and foreign copyright; that the question of foreign copyright had not been addressed by anyone before the point was raised late in the day; and that no evidence had been adduced as to foreign law. He refused to allow Crosstown to amend its pleadings in order to contend that the effect of clause 18(a) might be different in relation to different national copyrights. He held that it was too late to raise the jurisdiction point. So far as the judge was concerned justiciability of the ownership of foreign copyrights was not an issue at the trial.

The point on jurisdiction is raised on the appeal with, it is submitted, fresh and recent backing from this court in Lucasfilm. It is also contended that it was unfair of the judge to conclude that Crosstown should have raised the justiciability of foreign copyright earlier. The burden was on the Writers to show that the reversion had occurred, including the reversion of foreign copyrights. The Writers produced no evidence capable of discharging that burden on them. They advanced their case only under English law.

Lucasfilm is cited as support for the general proposition that claims for infringement, subsistence and title to foreign copyrights are not justiciable in English courts and that the Writers' counterclaims for declarations and infringement in respect of foreign copyrights should be dismissed. The supposed "floating reverter" property right was characterised by Crosstown as a question of the subsistence and therefore of the ownership of property in foreign copyrights outside the jurisdiction of the English courts. The judge ought therefore to have declined to rule on the Writers' claim for reversion of foreign copyrights as a matter of jurisdiction. It could not be resolved as a pleading point taken before the judge and accepted by him. The question whether there has been an automatic reverter of foreign copyrights to the Writers is submitted to be not justiciable in these proceedings.

On the justiciability issue I should first make clear that there is no issue in this case about the subsistence (i.e. the existence) of copyright either in the United Kingdom or in any foreign country. Indeed, it would be very surprising if there were. It is in the interests of both Crosstown and the Writers that copyright should subsist, so that it can be exploited by those entitled to it wherever and whenever possible. In copyright litigation primarily about which of the parties owns the rights subsistence is not usually an issue. Subsistence is more commonly an issue in proceedings for infringement of copyright where the defendant puts subsistence (and ownership) of the rights in issue as part of a defence strategy denying liability to the claimant for infringement.

Turning to the authorities, notably Lucasfilm, which was concerned with the justiciability of claims for infringement of foreign copyright, they do not support Crosstown's submissions on the non-justiciability of the title issues to foreign copyrights. The issue of ownership of copyright as between the parties in this case turns on the legal effect of contractual documents that, according to their express terms, have to be construed according to English law and are subject to the exclusive jurisdiction of the English courts.

Lucasfilm comprehensively reviewed the authorities, which did not speak entirely with one voice, and clarified the current state of the law on justiciability. Although many of the authorities are included in our papers there is no point in repeating the exercise already conducted by this court in Lucasfilm. That case is now the relevant point of reference on justiciability of foreign intellectual property rights.

The English proceedings in Lucasfilm were for infringement of US copyright in a claimed work of sculpture and for enforcement of a default judgement for infringement obtained in the USA. As for the latter, the Court of Appeal held that the US default judgment was not enforceable in England for reasons that are not relevant to this case. More to the point, the Court of Appeal also held that the English court had no jurisdiction to enforce the claimants' US copyright in the infringement proceedings. The subject matter was a non-European Union intellectual property right. Infringement of an intellectual property right was held to be essentially a local matter involving local policies and local public interest and should be left to local judges. It is clear that the court was ruling only on the non-justiciability of claims for infringement of foreign, non-EU copyright. That appears from the conclusion on the detailed review of the authorities:-

"174. …We have decided that there is no binding authority. So we must decide now whether English law regards claims for infringement of foreign, non-EU copyrights as non-justiciable here. We so hold. We do so for the following reasons."

The court set out seven reasons for its conclusion, adding (at paragraph 183) that "…for sound policy reasons the supposed international jurisdiction over copyright infringement claims does not exist."

In my judgment, the 7 reasons given should not be read separately from the clear terms of the opening and conclusionary passages in that section of the Lucasfilm judgment. The court was not addressing issues of the ownership of or title to copyright, let alone construing, as between contracting parties or their successors in title, contracts that purported to deal with the relevant rights on a universal basis with English choice of law and exclusive jurisdiction provisions.

Mr Tozzi QC appearing for Crosstown submits that the reasons given for the decision in Lucasfilm lend support for a wider rule excluding justiciability in this case. For example, the first reason referred to the two-fold rule in the case British South Africa Co.v. Companhia de Mocambique[1893] AC 42 about claims to land as applying to claims for infringement of copyright. That case went wider than the issue of infringement of rights and held that the English courts had no jurisdiction to entertain an action for the determination of a disputed claim of title to foreign land. Thus the rule went to title to the right, not just to its infringement by trespass. It is submitted by Mr Tozzi QC that the same applies to the right to the automatic reversion of the copyright in the event of an unremedied material breach.

It is also said that other reasons given by the court for its conclusion are applicable to the dispute in the case about the recognition of the existence of an automatic reverter of copyright: the involvement of "a clash of the IP policies of different countries"(second reason- paragraph 176): objections to extra-territorial jurisdiction as "a restraint on actions in another country" (third reason-paragraph 177); if all courts assume jurisdiction there is "too much room for forum-shopping, applications for stays on forum non conveniens grounds, applications for anti-suit injunctions and applications for declarations of non-infringement"(fourth reason – paragraph 178); the absence from the international scene of "a regime for the international litigation of copyrights by the courts of a single state " (fifth reason –paragraph179); the considerations that have led courts to decline jurisdiction over foreign patent claims (sixth reason-paragraph 180); and the rejection of "the supposed difference between the subsistence of the right or the validity of its grant and its infringement (seventh reason –paragraph 181). It was pointed out that the adjudication on infringement will itself often require the court to decide on the subsistence, title and scope of the right granted.

I accept that some of the reasons given in Lucasfilm for the non-justiciability of a claim for infringement of foreign copyright could be relevant considerations in deciding whether a disputed claim to ownership of foreign copyright is justiciable. However, it is plain that the court was not addressing that issue in the context of an English law contract conferring exclusive jurisdiction on the English courts and that the court was not addressing a contract/title case like this. In my judgment, nothing in the Lucasfilm judgment diminishes the force of contractual provisions of the kind present in this case.

Indeed, in Lucasfilm the court made it clear that it did have jurisdiction to determine the rights of the respective parties to foreign copyright arising out of its assignment and transmission. The court referred to the decision in Griggs v. Evans [2004] EWHC 1088 (Ch); [2005] Ch 153 at para 125 relating to an issue of ownership of foreign copyright said to arise from a contract governed by English law saying:-

"163. The case involved a dispute about the ownership of copyright in a logo created for the claimants. It was designed in England pursuant to an English contract. The issue was whether the foreign copyrights as well as the English copyright, belonged to the claimants. He held that they did and the English court had jurisdiction so to decide and to order the defendant enter into any necessary assignment to perfect title. We find nothing remarkable in that. Our courts have always had an in personam jurisdiction to enforce a party properly before the court to perform an act required by English law."

I emphasise that in this case the ownership issue turns on the construction and application of a term in a contract which deals with copyright throughout the universe and which has an express English law clause and exclusive English courts jurisdiction clause. As between the parties and their successors in title that is binding on the question of the appropriate jurisdiction and the applicable law.

C. Election and related principles

Crosstown appeals against rulings of the judge rejecting its submissions on implied terms and on the application of the doctrines of election and related principles of waiver, acquiescence and equitable forbearance/estoppel. They were relied on for the overall point that the potential of the Cure Notices to effect an automatic reverter of copyrights to the Writers was barred by various acts and events.

The rulings in question cover two main areas: the effectiveness of the Cure Notices served on 4 April 2007 and the effect on the reverter claim of the conduct of the parties after the service of the Cure Notices.

The judge considered the submissions and the evidence on which they were based in detail. The points were argued in the skeleton arguments, as supplemented at the hearing, in far more detail than is necessary for their consideration in this judgment. There is little that I can say (other than useless repetition) in addition to what was plainly right in the judge's very thorough explanation as to why the well-settled, undisputed legal doctrines of election, waiver and estoppel do not fit the particular facts of this case. I will concentrate on the main criticisms of the judgment on this aspect of the case.

A preliminary comment on the nature of the dispute between the parties may dispel some of the underlying conceptual confusion in Crosstown's submissions. As already explained, this is a property dispute, not a breach of contract case save to the limited extent that material breaches of contract left unremedied had to be established as the trigger for the operation of the automatic reverter provision in clause 18(a). That agreed remedy for the Writers in the event of a breach of contract by the publisher had a potential impact on the title to the copyright in the songs.

I single out this aspect of the case, as some of Crosstown's submissions appear to me to treat clause 18 (a) as analogous to either a contractual option to terminate a commercial agreement or to a situation of repudiatory breach of contract, facing the Writers with a choice of accepting the breach as terminating the songwriting agreements or of treating the songwriting agreements as continuing, accepting performance otherwise than in accordance with their terms and suing for damages for breach of contract.

In my judgment, neither analogy is appropriate. That is not the way in which the automatic reverter provision in clause 18(a) works. Although the copyright is re-vested in the Writers automatically, that shift in the title to the property rights does not instantly and automatically terminate all the contractual obligations. Some obligations continue in force after the operation of the reverter clause on the ownership of the copyright: for example, the obligation to collect royalties from sub-publishers and the obligation to account for the exploitation of the rights up to the time of reversion. This general point turns on the crucial difference between property and contract and is specially relevant to arguments advanced that the Writers have somehow, by their actions or by not acting within time limits, lost or abandoned their right to serve the Cure Notices or to claim the reverter.

(1) Service of Cure Notices April 2007

Mann J found that the attacks on the Cure Notices were not good and that the notices themselves were effective to trigger the automatic reverter of the copyrights.

First, the judge rejected Crosstown's submissions that there should be implied into the songwriting agreements a term that a Cure Notice had to be served within a reasonable time of the Writers becoming aware of the relevant breach. He said that he could not see the basis for the implication of any such term, as the contract would work perfectly well without it (paragraph 151). He held that, following a material breach of the songwriting agreement, there was no limit to the time in which the Writers had to exercise their right to give notice under clause 18(a).

Secondly, he rejected a contention based on an obligation to elect within a reasonable time. The contention was based on an analogy with repudiatory breach or with contractual commercial options, such as a provision permitting termination of a contract on notice in the event of a material breach and giving rise to an obligation to elect to exercise the right within a reasonable time of becoming aware of it, otherwise the right is waived and lost. It was contended that the Writers had elected not to serve Cure Notices in respect of the breaches set out in them and so the right to serve a Cure Notice had been lost. The judge held that the doctrine of election relied on by Crosstown did not apply to clause 18(a), which provided an agreed contractual remedy for breach not dependant on a repudiation or equitable rescission: the Writers did not have to "elect" whether or not to exercise the right to give the Cure Notice. Once the Cure Notice was served the publisher had an opportunity to avoid the serious consequences by remedying the breach and performing the contractual obligation. There was no question of an election by the Writers which had to be exercised within any time limit.

Thirdly, the judge held that, even if there was a reasonable time requirement in relation to the breaches in relation to the audits specified in the Cure Notice, it was impossible to say that it was unreasonably late and the notices were ineffective.

Fourthly, Crosstown invoked the doctrine of equitable forbearance to attack the Cure Notices by contending that, by their conduct, the Writers had led Crosstown to believe that the strict rights under the songwriting agreements would not be insisted upon intending Crosstown to act on that belief and that it did so act, so that the Writers should not be allowed to insist on the strict rights when it would be inequitable to do so: see Plasticmoda per Azioni v. Davidsons (Manchester) Ltd [1952] 1 Llods Rep 529 at 538-9 per Denning LJ. The judge rejected the contention that the Writers had by their conduct, such as by serving notices on some issues only, or by accepting part of their entitlement, or by other acts, such as permitting Crosstown to exploit the songs by pursuing synchronisation licence projects, entering into new sub-publishing contracts and by registering with collection societies world wide, made any representation to RD or Crosstown that they would not rely on various audit matters as the basis of a clause 18 notice. The judge found that there were positive indications that they would rely on clause 18 and no indication that they were abandoning clause 18 in relation to those matters. Crosstown had problems in establishing reliance. If it were necessary to go that far, the judge said that nothing had made it inequitable for the Writers to resile even if the alleged indication had been given.

On this part of the case the judge also rejected contentions that the conduct of the Writers was consistent only with their having decided not to seek to have their copyrights back on the basis of some of the audit matters. The judge held that the acts of the Writers were not inconsistent with wanting the copyrights back.

Finally, on the matter of the effectiveness of the Cure Notices to trigger the reverter, the judge held that it was open to the Writers to serve more than one notice under clause 18 in respect of the same breach, even after issuing and abandoning earlier notices in respect of precisely the same alleged breach. In relation to the RCO audit matters the Writers had served notices before the Cure Notices relied on in the proceedings. Crosstown submitted that clause 18 was a "one-shot" provision: having already had one go at serving notices in 2002 and 2006 they could not have another go in April 2007. The judge held that, as a matter of construction, clause 18 did not require or provide that only one notice per breach can be served and that the requirements for implying a term to that effect were not met, as it was not necessary to imply such a term in order to make the contract work.

Crosstown submits that the judge was wrong on those points and erred as to how the principles of waiver and election properly apply in respect of clause 18. He should have held that the Writers lost any right to rely on clause 18, as they were required to elect whether there was a reversion of the copyrights. It is also submitted that the Writers had waived their right to elect in relation to the audit complaints by not sending notices within a reasonable time and by their conduct. Further, clause 18 was a contractual option that must be exercised within a reasonable time and by not doing so the Writers had waived their right to do so.

In my judgment, the judge's conclusions on these points were clearly correct. The judge was right to hold that clause 18 does not contain an implied term as to service of a notice within a reasonable time and that, as matter of construction, the clause does not limit service of only one notice relating to each breach. The implication is not necessary as a matter of business efficacy.

The Writers were not faced with an election, as in the case of repudiatory breach or of a commercial option, nor was service of the notices subject to implied limitations. They had not waived any of their rights to the reversion by reason of the circumstances preceding or surrounding the service of the Cure Notices.

(2)Post- service of Cure Notices in April 2007

Crosstown identifies various matters in the conduct of the Writers as being consistent only with Crosstown continuing to own the copyrights after the claimed reverter. It relies on election or equitable forbearance in respect of events after April 2007 in so far as the Writers permitted and encouraged the exploitation by Crosstown of songs by giving active or passive approval to various proposed licences, permitting and encouraging the collection of income and accepting further accounting statements without a clear reservation of rights.

As Mann J said (paragraph 188), it is difficult to discern the legal basis for this contention. If the notices were invalid, questions of election and forbearance would not arise. If, as he held, the Cure Notices were good, they operated very soon after the proceedings were commenced, the copyrights will have reverted and election becomes irrelevant. The operation of licensing and collection under the continuing contractual obligations could not affect the ownership of the copyrights.

In my judgment, it is plain that the Writers' conduct after April 2007 was not relevant to the issue of title to the copyright following an automatic re-vesting of the copyright in them. Its possible relevance is to whether Crosstown had a defence (e.g. consent implied from conduct) to the Writers' counterclaim for infringement of copyright, but that was not an issue for the judge at that stage of the trial or on the appeal.

On the matter of an alleged abandonment of the reversion of the copyright the Writers have at all material times maintained that it was effective. They have not manifested any intention by conduct, before or during the proceedings or otherwise, to abandon their reliance on the Cure Notices or their claim to the reversion. The question of election by the Writers after the service of the Cure Notices does not arise. As already explained and emphasised, the effect of the Cure Notices was automatic in bringing about a reverter of the copyright: Crosstown's continued exploitation of the copyright and the Writers' acceptance of payments from Crosstown since the Cure Notices were served and pending the determination of the dispute is not effective to transfer the reverted copyright back to Crosstown. Nor was there any representation by the Writers or reliance by Crosstown that could give rise to any estoppel.

Result

I would dismiss the appeal on all grounds, as Crosstown has not established that the judge's order is wrong in any respect. The judgment is commendably clear and correct and I agree with it. It is unnecessary to reach a decision on the respondent's notice, as the judge's finding that the particular breach was not specified in "reasonable detail" does not affect the operation of the Cure Notices triggering the automatic reverter.

In my view, relatively straightforward questions of dealings in copyright were complicated by Crosstown's convoluted and, in my view, misconceived legal arguments. Once the issues and the basic principles are identified, the legal position turns out to be as coherent and as sensible as it should be.

I should add that, quite apart from the legal arguments for dismissing the appeal, I agree with Mr Ian Mill QC that Crosstown's general characterisation of the merits of the case is not correct. The outcome below was presented by Mr Tozzi QC as an "odd commercial result" in a case in which Crosstown had paid almost US$10m for nothing and had exposed itself to copyright infringement claims, while the Writers had gained a huge windfall by obtaining copyrights worth £m's which they have already sold once and been paid for. That is not right.

For a nominal sum and modest advances the Writers had assigned their copyright for a period (2 years plus a 25 year retention period) during which RD agreed to exploit the rights and share the profits with the Writers. It was only if RD did not comply with their contractual obligations that the agreements provided a procedure for the re-vesting of the rights. That was a safeguard for them against RD's failure to honour its accounting obligations and to exploit the songs. Crosstown acquired the rights from RD without making enquiries of the Writers whether RD had paid them what was due to them under the songwriting agreements. It had obtained warranties from RD to the effect that the copyrights were unencumbered and secure, and that there were no outstanding claims or allegations by the Writers. Crosstown alleges that RD failed to disclose to it most of the issues between it and the Writers, including the existence of legal proceedings and an outstanding cure notice served in May 2006. Crosstown's remedies, for whatever they may be worth, are against RD, and not against the Writers.

Mr Justice Morgan:

I agree with the judgment of Lord Justice Mummery on all points. In view of the fact that the issues raised on this appeal, in particular, the interpretation of section 90 of the Copyright, Designs and Patents Act 1988 and the issue as to foreign copyrights, raise questions of general principle, it is appropriate for me to add some comments on my own. I gratefully adopt Lord Justice Mummery's description of the facts relevant to these issues and his summary of the submissions of the parties.

Section 90 of the Copyright, Designs and Patents Act 1988

The first issue concerns the meaning and the effect of clause 18(a) of the agreements in this case, having regard to the provisions of section 90 of the Copyright, Designs and Patents Act 1988 ("the 1988 Act").

The judge held that clause 18(a) provided for a reverter of copyright in the event described in the sub-clause. He held that the words in clause 18(a) which stated that "all rights assigned to the Publisher hereunder shall forthwith revert to the Writer" meant what they said. He held that the rights conferred by the clause on the Writer were effective as against Crosstown, who was a successor in title to Rive Droite in relation to the copyright.

Crosstown submits that on the true construction of the agreement, clause 18(a) does not provide for a reverter of copyright to the Writer but imposes a contractual obligation on the Publisher to re-assign the copyright to the Writer. The reason why Crosstown puts forward this argument is that Crosstown wishes to go on to contend that although Rive Droite is under an obligation to re-assign the copyright to the Writer (an obligation which it can no longer perform), that obligation is not binding upon and not enforceable against Crosstown. It is said that Crosstown was not a party to the agreements and did not itself take on this contractual obligation and, further, the contractual obligation did not create an equitable interest in the copyright (in favour of the Writer) binding on Crosstown. In relation to the latter proposition, Crosstown says that an equitable interest could only come into existence on the happening of the event referred to in clause 18(a) and, although (on the judge's findings) that event did come about, it only came about 45 (or 60) days after service of the notices dated 4^th April 2007, which was after the copyright had been assigned to Crosstown on 19^th July 2006.

At the trial, Crosstown had argued that if one read clause 18(a) in the context of the agreement as a whole, and even before considering the impact of section 90 of the 1988 Act, the right construction to place on the sub-clause was that in order for the copyright to be re-vested in the Writer, there had to be a written re-assignment of the copyright to the Writer. The judge examined the provisions of the agreement relied upon by Crosstown and rejected the argument based on construing the agreement as a whole. He was plainly right to do so and Crosstown has not repeated those arguments on this appeal.

Nonetheless, Crosstown continues to contend for its construction of clause 18(a). It does so by making submissions as to the general law relating to assignment of a copyright, as provided for in section 90 of the 1988 Act. In summary, Crosstown contends that it is not legally possible to assign a copyright on terms which provide for an automatic reverter of that copyright on the happening of an event, when the occurrence of the specified event and the date of any such occurrence are not fixed and certain at the time of the original assignment. Crosstown says that if it is right about the general law then one should look again at the wording of clause 18(a) with that background in mind and in that way arrive at a construction which is that clause 18(a) is effective, rather than ineffective, but it takes effect as a contract to re-assign on the happening of an event, rather than a reverter on the happening of an event.

I confess to being doubtful as to the interpretation of clause 18(a) contended for by Crosstown if it were right on the general law as to assignment of copyright. However, I will put those doubts to one side and will consider the premise of Crosstown's argument which raises a general issue as to the assignment of copyright and the meaning of section 90 of the 1988 Act.

Section 90 of CDPA 1988 is in these terms: -

(1) Copyright is transmissible by assignment, by testamentary disposition or by operation of law, as personal or movable property.

(2) An assignment or other transmission of copyright may be partial, that is, limited so as to apply-

(a) to one or more, but not all, of the things the copyright owner has the exclusive right to do;

(b) to part, but not the whole, of the period for which copyright is to subsist.

(3) An assignment of copyright is not effective unless it is in writing signed by or on behalf of the assignor.

(4) [Deals with licences]

I make the following comments on this section.

Section 90(1) refers to copyright being transmissible by assignment as personal or movable property. Perhaps because of this wording, Crosstown submitted to us that the constraints which exist at common law as to the nature of interests which could be created, at law, in personal property, should be considered when interpreting section 90. I did not find that approach in any way helpful as a guide to the interpretation of the statute. Although section 90(1) refers to copyright being transmissible "as personal or movable property", the section goes on to spell out what is required in order to have an effective assignment of copyright. Those requirements are contained in subsections (2) and (3) of section 90. In my judgment, if the requirements of those subsections are met, then there will be an effective legal assignment of copyright. It is not right to read into those subsections some further unstated limitations which might or might not affect the transmission of other property at common law. Further, the court's task is to arrive at the true construction of section 90 without preconceptions based on what are argued to be common law constraints on the transmission of personal or movable property.

I take the same view of Crosstown's submissions based on the law as to the assignment of choses in action, governed by section 136 of the Law of Property Act 1925. That section is in different terms from section 90 of the 1988 Act. The two sections do not operate in the same way. Section 136 of the Law of Property Act 1925 therefore provides no guide to the true interpretation of section 90 of the 1988 Act.

Section 90(2)(a) refers to the possibility of the assignment of some, but not all, of the rights of the copyright owner. The subsection does not identify any express requirements as to certainty in relation to identifying which of the relevant rights are being assigned. My reaction to the statutory language is that if one has a written assignment expressed in language which satisfied the test for certainty in the general law of contract, that would meet the requirements of section 90(2)(a). The contrary was not argued in relation to section 90(2)(a).

Section 90(2)(b) refers to the possibility of an assignment of copyright for part only of the period for which copyright is to subsist. As with section 90(2)(a), the section does not identify any express requirements as to certainty in relation to identifying the period involved. My reaction to the statutory language is that if one has a written assignment expressed in language which satisfied the test for certainty in the general law of contract, that would meet the requirements of section 90(2)(b) and it is neither necessary nor appropriate to read into section 90(2)(b) any further requirement such as a requirement that the part of the period for which the rights were to be assigned should be fixed and certain at the date of the assignment, instead of being expressed in terms which depend upon the happening of future events.

So far, I do not find anything in the statutory language which supports Crosstown's submissions as to the suggested requirement that the period in question must be fixed and certain at the outset in order for the assignment to be effective within section 90(2)(b).

As Lord Justice Mummery has pointed out, there is no case law which can be cited in favour of Crosstown's submissions as to the need for the period to be fixed and certain at the outset. Indeed, the reverse is true. Further, I do not think that there is any textbook authority in support of Crosstown's submissions; in my judgment, the statement in Copinger and Skone James on Copyright, 15^th ed., vol. 1, para 5-98 cannot fairly be regarded as supporting Crosstown's approach.

In addition to these general observations, I ought to consider two specific submissions made by Crosstown.

Crosstown contends that if the assignment is expressed in terms which provide for (1) an assignment for the whole of the period for which copyright is to subsist, but subject to (2) the possibility of the copyright reverting to the assignor on the happening of an event which might never occur, then one would not be able to say at the outset whether the assignment is for part of the period, or the whole of the period, for which the copyright is to subsist. However, in my judgment, one can say that the assignment is for either a part of the period or the whole of that period. Both of these forms of assignment are permitted. So it is not necessary for the purpose of determining the validity of the assignment to be able to say at the outset whether the assignment will turn out to be for part of the period or the whole of the period.

Crosstown also stressed the undesirability of there being uncertainty as to when and if copyright might be re-vested in the original assignor. In order to consider its submissions on this point, it is worth discussing the legal process involved in what has been called "reverter" of copyright and whether there is assistance to be derived from considering the legal concepts involved.

It is clear that section 90(2)(b) contemplates a legal process whereby, in certain circumstances, the assignee of the copyright is divested of the copyright which is re-vested in the assignor, without any further step being taken and in particular without the execution of a written re-assignment. The subsection permits an assignment for part, but not the whole, of the period for which the copyright is to subsist. The subsection does not say in terms what is to happen at the end of the part of the period. But it is clear that the copyright reverts to the assignor. Section 90 does not use the term "reverter" but the words "revert" and "reverted" are used in schedule 1, para. 28 of the 1988 Act, when dealing with transitional provisions arising from the Copyright Act 1911 and the Copyright Act 1956. Further, the word "reverter" is used in the agreement in this case and, as appears from the textbooks, it is a word in general use in this context to describe the relevant process.

There does not appear to have been any discussion in the cases about the legal character of a reverter in the case of copyright. However, reverter of title can occur in other areas of the law. Before 1926, it was possible to have reverter at law in the case of a determinable fee simple of land. Further, as Lord Justice Mummery pointed out in the course of argument, reverter at law was possible under the School Sites Act 1841 (and similar statutes) until the Reverter of Sites Act 1987. The substantial case law on the 1841 Act does show that difficulties can arise in a case where it is not clear whether a reverter has, or has not, occurred or in a case where reverter has occurred but no-one had appreciated that fact. Notwithstanding such difficulties, in these areas of the law, there is no suggestion that a reverter can only occur where the fact of reverter is fixed and certain at the outset. On the contrary, it is possible to have a reverter which is contingent on the happening of an event which might never occur. Accordingly, there is nothing in the underlying concept of a reverter to support Crosstown's submissions on this point.

The present case is an unpromising case for Crosstown. Although it stresses the need for certainty at the outset in relation to the period for which the assignment is to be effective, Crosstown chooses to ignore other provisions of the agreement which in different ways make it impossible to say at the outset for what period the assignment will be effective. I refer, in particular, to clauses 4(a)(ii) and 12(b). Under these clauses, the original term of 2 years is capable of being extended, contingently on the happening of events which might never occur. If Crosstown's general legal propositions were correct, then one possible conclusion might be that the original assignment to Rive Droite had been ineffective at law. Crosstown does not contend for that result but fails to explain why that result should not follow if its submissions were correct.

My overall conclusion is that Crosstown is unable to show that section 90 of the 1998 Act or any other relevant principle of law requires that the period for which copyright is assigned is fixed and certain at the outset. Accordingly, I reject the premise relied upon by Crosstown in support of its argument that clause 18(a) is not to be read in accordance with its ordinary literal meaning.

Accordingly, I conclude that the judge was right to hold that clause 18(a) provided for the reverter of copyright on the happening of the event, which he had held had come about. Crosstown accepts that if the judge was right in his interpretation of clause 18(a), then it is bound by the operation of clause 18(a) notwithstanding the fact that it is a successor in title to the original assignee of copyright. As the parties are agreed in that result, it is not necessary to investigate the legal analysis which produces that result and whether it is the case that the right of reverter is a right at law binding the successor in title of the first assignee or whether the successor in title is bound under the benefit and burden principle.

In view of my conclusion, it is also not necessary to consider what the position of Crosstown as a successor in title of the original assignee would have been if clause 18(a) did not provide for an automatic reverter but imposed a contractual obligation on Rive Droite to re-assign the copyright. The issue which potentially arises is whether clause 18(a) created an equitable right in the Writer from the outset (which was therefore binding on Crosstown) or only from the time at which the event referred to in clause 18(a) occurred (so that the equitable interest did not exist, and did not bind Crosstown, on the assignment to it on 19^th July 2006).

Foreign copyrights

The issue as to foreign copyrights is whether a dispute as to the effect of clause 18(a) of the relevant agreements between Rive Droite and the Writers is not justiciable in an English court in so far as it relates to foreign (non-EU) copyrights.

The essential difference between the parties related to the scope of the decision of this court in Lucasfilm Ltd v Ainsworth [2010] FSR 10. I agree with the analysis of Lord Justice Mummery as to the scope of that decision.

In considering the scope of the decision in Lucasfilm, close attention should be paid to the part of that decision which dealt with a further question raised on the appeal in that case as to whether Lucasfilm Ltd, as the commissioning party of the helmets and armour, had the benefit of an implied contract with Mr Ainsworth, the creator of the helmets and armour, under which the commissioning party had the right to have assigned to it any foreign copyrights or similar foreign rights which might be vested at law in Mr Ainsworth. The issue is described in the judgment at [14] and [17] and discussed and decided at [196] – [208]. As explained at [196], the issue only arose in relation to foreign copyrights (and there is no suggestion that the court was confining its discussion to EU copyrights). This court held that the commissioning party had the benefit of such a contract and had equitable title to any foreign copyrights which might be vested in Mr Ainsworth. Accordingly, the court proceeded on the basis that a dispute as to the existence of a contract as to the assignment of foreign copyrights and the effect in equity of such a contract was justiciable in an English court. Crosstown's submission on Lucasfilm invites us to hold that the court in that case (1) held that such a dispute was non-justiciable in an English court and (2) then proceeded to determine such a dispute. I reject that submission. In my judgment, Lucasfilm does not compel us to hold that a dispute arising out an English contract as to the assignment of foreign (non-EU) copyrights is not justiciable in an English court. I would dismiss Crosstown's appeal in relation to foreign copyrights.

Election and related principles

Before the judge, Crosstown alleged that the notices served on 4^th April 2007 were ineffective because they were served late as they were alleged to be in breach of an implied term that a notice had to be served within a reasonable time of the Writer becoming aware of a material breach by the Publisher. Crosstown also made a somewhat similar submission to the effect that when the Writer became aware of a material breach by the Publisher, the Writer was put to his election as to whether or not to serve a notice under clause 18(a) and that election had to be exercised within a reasonable time. Further, Crosstown submitted to the judge that the Writer had lost the right to serve a notice under clause 18(a) by reason of equitable forbearance or promissory estoppel.

The judge rejected the submissions as to an implied term, election and estoppel both on the law and on the facts. On the facts, he held that a reasonable time had not elapsed between the Writers becoming aware of the material breaches and the service of the notices of 4^th April 2007. That disposed of any argument based on an alleged implied term or on an alleged need to elect. He also held that there was no estoppel because there was no relevant unequivocal statement or promise, there was no relevant reliance and it was not inequitable for the Writers to rely on clause 18(a).

Although Crosstown's submissions all failed on the facts, Crosstown repeated its submissions in relation to an implied term and as to election on this appeal. As the legal principles were fully argued, I will briefly set out my reasons why the appeal fails on the law, making it unnecessary to examine the judge's conclusions on the facts.

In my judgment, there is no basis for the suggested implied term limiting the time within which the Writer can serve a notice under clause 18(a). The contracts in this case all work perfectly well if there is no such implied term. Indeed, the contracts would work less well if such a term were to be implied. If such a term were to be implied, the Writer's ability to talk to the Publisher, with a view to persuading the Publisher to deal with the matter of complaint before the Writer felt it necessary to increase the pressure on the Publisher by the service of a clause 18(a) notice, would be inhibited; the Writer would be concerned that the time taken up in discussion and persuasion would use up the reasonable time within which a clause 18(a) notice could be served. The suggested implied term would also involve an inquiry, which might be far from straightforward, as to when the Writer became aware of the material breach. Further, the implied term could give rise to considerable dispute as to the length of a reasonable time in all the circumstances of the case. The outcome of such a dispute might be somewhat unpredictable. Further, it is not obvious that the Writer would have agreed to the suggested term if it had been pointed out in the course of negotiation of the contract that the contract did not contain any such express term.

The inspiration for Crosstown's submission that a term should be implied appears to come from cases where it was held that it was appropriate to imply a term requiring notice to be given within a reasonable time if a contracting party wished to exercise an option or certain contractual choices provided for in the contract. Thus a term of this kind was implied in Reardon Smith Line v Minister of Agriculture Fisheries and Food [1963] 1 Lloyd's LR 12, United Dominions Trust (Commercial) Ltd v Eagle Aircraft Services Ltd [1968] 1 WLR 74 and Zeeland Navigation Co Ltd v Banque Worms [1995] 1 Lloyd's LR 251. In my judgment, those cases are distinguishable and their reasoning is not applicable to the right created by clause 18(a). That right is not an option of the kind considered in those cases. It does not involve a right to determine a contract and to avoid future performance. It does not involve one party, by service of a unilateral notice, in changing the obligations as to performance by the other party. A notice under clause 18 involves no change in the contractual performance required of the recipient of the notice.

If an analogy has to be found for the right conferred by clause 18(a), then an option to determine a contract, or an option to impose unilaterally on the other party a different obligation, is the wrong analogy. A better analogy would be a notice making time of the essence. With such a notice, the recipient of the notice is told that if he does not perform the original unaltered obligation imposed by the contract within a specified time, then the party serving the notice has the option of determining the contract. I accept that the analogy is not a perfect one. Clause 18(a) provides for the reverter to be automatic whereas a notice making time of the essence allows the giver of the notice to decide whether or not to treat the contract as at an end. But a notice under clause 18(a) and a notice making time of the essence share the feature that the recipient is not being asked to do anything other than perform the original unaltered obligations imposed on him by the contract. Crosstown did not submit to us, nor show us any decided case which held, that a notice making time of the essence had to be served within a reasonable time of the giver of the notice becoming aware of the relevant breach of contract.

Crosstown relied on essentially the same cases, and on the general discussion as to the concept of election in The Kanchenjunga [1990] 1 Lloyd's LR 391, in support of its submission that the Writer would lose the right to rely on clause 18(a) if he did not exercise it within a reasonable time of becoming aware of a material breach. Again the cases are distinguishable and their reasoning does not apply to the right created by clause 18(a). The notice which may be served under clause 18(a) informs the Publisher that the Publisher has committed a material breach of contract and states that if the Publisher does not take reasonable action to remedy that breach, title to the copyright will revert to the Writer. The notice does not change the contractual performance which is required of the Publisher.

For these reasons, I reject Crosstown's submissions that the judge was wrong in relation to an implied term or as to election or that the notices of 4^th April 2007 were ineffective when served.

Before the judge, Crosstown also submitted that the conduct of the Writers after the service of the notices of 4^th April 2007 meant that the Writers are not able to rely on the notices. The judge rejected that submission. Crosstown repeated a similar submission on this appeal. Although Crosstown used general language about "abandonment" or "inconsistency", it never identified the legal principle which it was invoking to produce the result for which it contended.

It must be remembered that Crosstown needs to put forward these contentions in circumstances where the judge had held that the non-compliance with the notices to remedy had resulted in there being a reverter at law of the copyright to the Writers. Crosstown therefore needs to establish some legal process whereby the court can hold that the copyright has not reverted to the Writers but has remained vested in Crosstown; alternatively, that the copyright did revest in the Writers but something then happened to produce the result that the relationship of the Writers and Crosstown was once again governed by the agreement.

The first result could come about if something happened to estop the Writers from contending that the copyright had reverted under clause 18(a). The judge found that there was no such estoppel and that conclusion is not challenged on this appeal.

The second result could come about if the Writers and Crosstown had agreed that their relationship should again be governed by the agreements and so that the copyright had again vested in Crosstown, possibly only in equity (in the absence of a written assignment). Such an agreement might in principle be inferred from conduct which fell short of express agreement. However, there is no material which would enable Crosstown to advance such a contention.

Although Crosstown alleges that the Writers "abandoned" their rights under clause 18(a), in the present context for there to be any "abandonment" which had any legal effect there would have to be a contract, express or implied (from words or conduct) to that effect.

Crosstown sought support for its case by referring to the fact that the Writers had served earlier notices to remedy but yet were accepting that the agreements continued in being without any reverter up to the time that the Writer served notices to remedy on 4^th April 2007. I do not see how that statement of fact, on its own and without more, helps Crosstown or enables the court to analyse the situation after April 2007 in a different way to that expressed above.

Neither side submitted to us that there had been a reverter before the notices of April 2007. In order for there to have been a reverter at an earlier point, there would have to have been material breaches at an earlier point followed by valid notices under clause 18 followed by a failure to take reasonable action to remedy such breaches. Neither side argued before the judge that all these conditions for an earlier reverter had been satisfied. That was not an issue at the trial. The judge did not investigate those matters. We do have the findings which the judge made in relation to the notices of April 2007. His findings include findings about the history of the matter. It might have been open to argument (if this had been a relevant issue at the trial) that the judge's findings also supported similar findings in relation to earlier notices to remedy but Crosstown did not ask for those findings and does not have the benefit of them. In this court, we have to proceed on the basis, as was common ground, that the agreement remained in place up to the time of service of the notices of April 2007.

In any event, even if there had been an earlier reverter and then something happened (which was not explored at the trial) which had the effect that the Writers and Crosstown were proceeding on the basis that their relationship was still governed by the agreement, there has been no finding as to what that something might have been. Even if there would have been an earlier estoppel or a novation of the agreements, none of that would alter the legal principles to be applied to the facts after service of the notices of April 2007.

At one point, Crosstown came close to submitting that there was a convention between the parties to the effect that if the Writer served a notice to remedy under clause 18(a) but then did not act as if a reverter had occurred, then Crosstown was entitled to assume that on a future occasion where something similar happened, Crosstown would be legally entitled to say that there had again been no reverter. Crosstown does not have any findings of fact from the judge which would enable it to establish the necessary ingredients of such an estoppel. Furthermore, the judge made findings about the conduct of the Writers after service of the notices of 4^th April 2007, which do not support the suggestion that the Writers were proceeding on the basis that a reverter had not occurred as a result of those notices.

In support of its case that events after 4^th April 2007 prevented the Writers relying on the effect of the notices of that date, Crosstown relied on the decision of this court in Leofelis SA v Lonsdale Sports Ltd [2008] EWCA Civ 640. I do not see how anything in that decision bears on the present appeal or how it advances Crosstown's case. The court in that case decided that a notice which was relied upon as exercising a contractual right was ineffective because its terms were equivocal. The case concerned the interpretation of a particular unilateral notice.

I would dismiss Crosstown's appeal and uphold the judge's decision that the Writers are able to rely on the notices of 4^th April 2007 as fully effective under clause 18(a) of the agreements.

Sir Paul Kennedy:

For the reasons given in the judgment of Mummery LJ I agree that this appeal should be dismissed.

About BAILII - FAQ - Copyright Policy - Disclaimers - Privacy Policy amended on 25/11/2010