England and Wales High Court (Patents Court) Decisions

And

And

Judgment handed down on Thursday 10th December 1998 at 10.30am. This is the official judgment of the court and I direct that no further note or transcript be made.

1. There are two actions before me. In each of them the plaintiff is Bruce Springsteen, a world-famous composer and performer of popular music.

2. In the first action ("the Flute action") the defendants are Flute International Limited ("Flute"), Robert Tringham and Sony Music Entertainment Inc.

3. It is alleged in the Flute action that in 1996 Flute, without any authority from Mr Springsteen as copyright owner, manufactured or authorised the manufacture of two compact discs ("CDs") containing recordings of songs written and performed by Mr Springsteen, the copyright in which belongs to Mr Springsteen. The CDs have been referred to in these proceedings as "Unearthed" and "Unearthed II". "Unearthed" contained 16 tracks or songs. "Unearthed II" also contained 16 tracks. 13 of them were identical to equivalent tracks on "Unearthed". The remaining three tracks were of other songs written and performed by Mr Springsteen. In addition it was alleged that during 1966 Flute had released a 4 CD album entitled "Rock Classics - 100 Greatest Hits" which, as was admitted contained one track which was identical to one of those contained in Unearthed.

4. Flute appears to be heavily insolvent. On 24th July 1998 it was ordered to be compulsorily wound up. Accordingly all proceedings against it were stayed by virtue of Section 130 of the Insolvency Act 1986. No application to lift the stay has been made. Flute has therefore taken no part in these proceedings and I can make no order against it.

5. The second defendant in the Flute action is Mr Robert Tringham. It is said that he was at all times the directing mind and will of Flute and that the actions complained of against Flute were taken by Mr Tringham in the name and on behalf of Flute. It appears that Mr Tringham has never been formally appointed as a director of Flute but it was contended that his position is the same as if he had been so appointed and that he is himself liable for copyright infringement. Mr Tringham has been represented at the trial by Mr Tritton.

6. The third defendant, Sony, was joined as a defendant because, if Mr Springsteen is right in saying that he is the owner of the relevant copyrights, Sony has the benefit of a licence to exploit those copyrights, that licence having been granted to it by Mr Springsteen. Sony has taken no part in the proceedings, but its position is generally that of support for Mr Springsteen.

7. In the second action ("the Masquerade action") there are also three defendants, namely Masquerade Music Limited ("Masquerade"); Ronald Winter who is the sole or principal director of Masquerade; and Sony. The pleaded complaints against Masquerade and Mr Winter are (i) that they purported to authorise Flute to publish one or both of the "Unearthed" CDs (an allegation which has not in the event been pursued); (ii) that in 1997 and 1998 they threatened to manufacture or authorise the manufacture of a CD entitled "Bruce Springsteen - Before the Fame", which contains recordings of many of the songs which featured on "Unearthed" or "Unearthed II" and other songs written and performed by Mr Springsteen the copyright in which is said to be owned by Mr Springsteen; and (iii) that in or about October 1997 they imported from the United States a version of the CD "Bruce Springsteen - Before the Fame" which contains many of the same tracks as the version proposed to be manufactured by or on behalf of Masquerade.

8. At the trial Mr Tritton has represented Masquerade and Mr Winter as well as Mr Tringham. The position of Sony as a defendant in the Masquerade action is the same as its position in the Flute action and it has not been represented before me.

9. It has not been disputed that all the tracks on the CDs of which complaint is made are of songs in which the words were written and the music composed by Mr Springsteen. It is also agreed that the tracks are reproductions of recordings of informal performances originally given by Mr Springsteen, although in some cases the sounds of additional instruments have been added to the original recordings. It is also accepted that neither Flute nor Masquerade had any licence from Mr Springsteen to do what they have done or threatened to do. It is said on behalf of Mr Tringham, Masquerade and Mr Winter (to whom I shall refer collectively as "the defendants") that no such licence was required because Mr Springsteen is not the copyright owner. At an earlier stage the pleadings in both actions included an affirmative case that Flute and Masquerade were, in relation to the acts done or threatened by them, the licensees of a third party who was said to be the true copyright owner. This affirmative case has to a large extent been formally abandoned, in that no attempt to prove it has been made. The main argument on behalf of the defendants was the negative case that Mr Springsteen is not the copyright owner. As will appear, however, this inevitably involved the suggestion that the affirmative case was or might be correct. This being the nature of the main dispute between the parties it will be necessary to examine in some detail the circumstances in which the songs in question were written and recorded and in which the relevant copyrights are said to have devolved. In due course I shall have to give separate consideration to (a) the copyright in the words and music of the songs and (b) the copyright in the sound recordings. Initially, however, I shall describe the relevant events generally.

10. For present purposes the story begins late in the year 1971, when Mr Springsteen was about 21 years of age. At that time he had been a professional singer and musician for some seven years. His activities seem to have consisted mainly of performances in small and little-known groups or bands at unfashionable venues in New Jersey, where he lived. Latterly his band was known as "The Bruce Springsteen Band" but it achieved neither fame nor fortune and, after a number of vicissitudes, it broke up at the end of 1971 or early in 1972.

11. Towards the end of 1971 an individual known as Tinker West, who had in effect been the manager of the Bruce Springsteen Band, introduced Mr Springsteen to Mr Mike Appel. Mr Appel had for some years been a song writer employed by a music publisher named Wes Farrell, or by his company named Pocketful of Tunes Inc. To a large extent Mr Appel carried out his song writing jointly with an individual named James Cretecos. Mr Appel's interest in their joint compositions was regarded as belonging to Wes Farrell or his company by virtue of his contract of employment but Mr Cretecos was not an employee of Wes Farrell or his company and special arrangements were made for the assignment of his interest in joint compositions to Wes Farrell or his company.

12. When Mr Springsteen was first introduced to Mr Appel he played and sang two or three of his songs to him and Mr Appel indicated an interest in promoting them in some way. At the end of 1971 Mr Springsteen went to stay for some weeks with his parents in California and had no contact with Mr Appel. In February or March 1972 he returned to New Jersey and approached Mr Appel again to see whether he was interested in working with him.

13. Mr Appel indicated that he was interested and, either then or soon afterwards, he told Mr Springsteen that he worked closely with Mr Cretecos, that they were equal partners and that they would jointly act to promote Mr Springsteen's interests. Mr Springsteen met Mr Cretecos and appears to have agreed informally to this arrangement.

14. Mr Appel and Mr Cretecos then instructed a New York attorney named Jules Kurz to act for them in defining their relationship with Mr Springsteen. Mr Kurz was then a sole practitioner specialising in music and entertainment law. Mr Kurz gave evidence at the trial and although, as will appear, there are some parts of his evidence which have to be examined with care, I have no difficulty in accepting his account of his early instructions from Mr Appel and Mr Cretecos. He said that they instructed him to set up three corporations to handle different aspects of the relationship with Mr Springsteen. One was to enter into a song-writing agreement with Mr Springsteen, another was to carry out a management function and the third was to enter into a recording agreement. Mr Kurz said that at that time the incorporation of a company in New York involved the expenditure of several hundred dollars. He was not prepared to see to the incorporation until he had been put in funds for this purpose and Mr Appel and Mr Cretecos did not put him in funds until several months after they first instructed him. The names of the proposed corporations were, however, discussed at a very early stage. It was proposed that the management and recording companies were to have names incorporating the words "Laurel Canyon" which were conjured up by Mr Appel. The company which was to enter into the song-writing agreement was, however, to have a different name. The name "Sioux City" was chosen, but it is not clear by whom. The reason for the difference in name is a matter which was canvassed at the trial, as I shall explain later.

15. At some time in March 1972 an Exclusive Recording Agreement was entered into between a party described as "Laurel Canyon Productions" and Mr Springsteen. This agreement was drafted by Mr Kurz. It was expressed to be dated merely "this ........ day of March 1972".It was signed by Mr Appel on behalf of Laurel Canyon Productions. On 17th March 1972 Mr Appel and Mr Cretecos filed a certificate under Section 130 of the New York General Business Law. The certificate, which was signed by each of them, stated that they were carrying on business in partnership as the members of a partnership under the name or description of "Laurel Canyon Productions". On the same date they signed and filed a similar certificate stating that they were carrying on business as the members of a partnership under the name or designation "Laurel Canyon Management". I will come back to the name "Laurel Canyon Management". The inevitable inference from the other certificate, taken in conjunction with the other facts which I have mentioned, is that the Exclusive Recording Agreement of March 1972 was entered into between Mr Springsteen on the one side and a partnership consisting of Mr Appel and Mr Cretecos on the other side. This inference was at trial advanced on behalf of Mr Springsteen and accepted, or at any rate not resisted, on behalf of the defendants. I have no difficulty in making it. Hereafter when it appears convenient to do so I shall refer to that partnership as LCP, although I will use its full name when this seems to be preferable in the interests of clarity. I will adopt a similar practice with certain other abbreviated names.

16. By the Exclusive Recording Agreement LCP engaged the services of Mr Springsteen as an employee in the production of phonograph records and tapes. The agreement was to be for an initial period of one year and was capable of being extended at the option of LCP. Mr Springsteen was to make recordings at studios designated by LCP and at times and places designated by LCP, which was to advance all the costs of recording. Mr Springsteen agreed during the term of the agreement and for certain additional periods, not to perform for anyone else, make recordings for anyone else or manufacture or authorise the manufacture of records embodying his performance under the agreement.

17. By Clause 6 of the Exclusive Recording Agreement it was provided that

18. Mr Springsteen also entered into a Management Agreement. This was in the form of a letter from him to an entity described as "Laurel Canyon Management" at an address which was shown to be Mr Appel's apartment. It was signed by Mr Springsteen and countersigned, by way of agreement and acceptance on the part of Laurel Canyon Management, by Mr Appel. Mr Appel said in evidence and I accept that this agreement was entered into at the same time as the Exclusive Recording Agreement. Having regard to the Business Regulations Certificate which I have already mentioned I infer that "Laurel Canyon Management" (which I shall henceforth refer to as LCM when this seems convenient) was a partnership between Mr Appel and Mr Cretecos.

19. The particular terms of the Management Agreement are not of importance in these proceedings. For the present it will suffice to say that LCM was engaged by Mr Springsteen as his sole and exclusive personal manager for a term of five years from the date of the agreement. LCM was to be remunerated for its services in accordance with provisions said to be set out in a rider to the agreement, no copy of which appears to have survived.

20. This Management Agreement was seemingly replaced by a new Management Agreement, drafted by Mr Kurz and expressed to be entered into "this ... day of May 1972". Mr Appel said, and I accept, that it was signed in May 1972 at a meeting in Mr Kurz's office at the same time as the Songwriter's Agreement which I shall describe in a moment. It was expressed to be made between Mr Springsteen on the one part and an entity described as "Laurel Canyon Management Inc" of the other part. At the time there was no corporation in existence named "Laurel Canyon Management Inc" and Mr Kurz had not yet incorporated any of the companies which Mr Appel and Mr Cretecos had intended to bring into existence. In my judgment, on the balance of probabilities, "Laurel Canyon Management Inc" was an inaccurate way of describing the partnership between Mr Appel and Mr Cretecos which I have referred to as "LCM". In other words the new Management Agreement of May 1972 was made between the same parties as the old Management Agreement of March 1972 and the new one superseded the old. The precise terms of the new agreement are not material. It will suffice to say that it was for a term of one year only commencing on 1st May 1972 and terminating on 30th April 1973.

21. At the same time as the new Management Agreement was entered into an exclusive Songwriter's Agreement was signed. This, which followed a printed form with the blank spaces completed in typescript, was expressed to be made between an entity named as "Sioux City Music Inc" (which I shall abbreviate to "SCMI" when this is convenient) and Mr Springsteen. The address of SCMI was given as that of Mr Cretecos's apartment. There is a dispute in these proceedings as to the true identity of SCMI and I shall have to come back to that. The most important part of the Songwriter's Agreement for present purposes is Clause 1 which, so far as material, reads:

22. Some time in April 1972 Mr Appel made contact with an individual named John Hammond, the head of the Artists and Repertoire department at CBS Records, one of the largest record producers in the world. Mr Springsteen performed for Mr Hammond, who liked what he saw and heard. On 3rd May 1972 Mr Hammond arranged for Mr Springsteen to make some demonstration tapes at the studios of CBS. These created a sufficiently favourable impression to cause CBS to offer a recording contract. This contract was entered into in the form of a letter dated 9th June 1972 addressed by CBS Records to "Laurel Canyon Productions Inc" care of Mr Kurz. It was countersigned by way of acceptance on behalf of "Laurel Canyon Productions Inc" by Mr Appel. Mr Springsteen himself also signed an acknowledgement stating that he assented to the agreement and agreed to be bound by its terms. I do not think it is open to any serious doubt that the entity described in the CBS Agreement as "Laurel Canyon Productions Inc" was the same as the entity described in the Exclusive Recording Agreement entered into in March as "Laurel Canyon Productions". In other words it was the partnership between Mr Appel and Mr Cretecos which I have referred to as LCP. Henceforth I will proceed on this basis.

23. Under the CBS Agreement LCP was to provide to CBS the services of Mr Springsteen to perform at recording sessions for the purpose of making phonograph records. It was provided that during the term of the agreement, which was to be a period of one year subject to the possibility of extension, Mr Springsteen would not make records for anyone else. All master recordings made under the agreement, when delivered to CBS, were to be the property of CBS. The other detailed terms of the CBS Agreement do not matter for present purposes.

24. The CBS Agreement was varied by a letter from CBS Records dated 10th August 1972 which was countersigned by both Mr Appel and Mr Cretecos to indicate agreement on the part of LCP. The substance of this variation was that LCP agreed to transfer to CBS Records, in such a way as to make them the property of CBS Records, the master recordings of certain compositions which had been recorded before the date of the CBS Agreement, the property in which did not therefore belong to CBS under that Agreement. LCP warranted its title to such master recordings. Ten such recordings were specified. They included recordings of compositions named ""Visitation at Fort Horne", "The Jazz Musician" and "Arabian Night". These names will reappear at a later stage of the story.

25. On 28th June 1972 a corporation named Laurel Canyon Ltd was incorporated under the Business Corporation Law of New York. On 5th October 1972 a corporation named Sioux City Music Limited was likewise incorporated. Finally on 5th March 1973 a corporation named Laurel Canyon Management Ltd was incorporated. In each case the incorporation was handled by Mr Kurz. There is no doubt that he was acting on behalf of Mr Appel and Mr Cretecos in effecting these incorporations and that Mr Appel and Mr Cretecos became entitled to equal shareholdings in each of the companies. The choice of the abbreviation "Ltd" in preference to the abbreviation "Inc" or other permitted designation of incorporation was said to have been made by Mr Appel, who thought that "Ltd" sounded more English and "classy". It is said that Laurel Canyon Ltd was incorporated to take over the business previously carried on by LCP; Sioux City Music Ltd to take over the business previously carried on by SCMI; and Laurel Canyon Management Ltd was incorporated to take over the business previously carried on by LCM. More importantly it is contended that the assets of each predecessor partnership, including in particular the musical and literary copyrights in compositions by Mr Springsteen belonging to SCMI, were assigned to the relevant successor company shortly after it was incorporated. This is a matter which I shall have to examine closely at a later stage.

26. On 24th April 1973 Sioux City Music Ltd changed its name to Laurel Canyon Music Ltd (which I shall refer to as "LCML"when this is convenient). In order to facilitate this, the board of Laurel Canyon Ltd passed a resolution accepting that the new name was not the same as or similar to its own name. The certified copy of this resolution which was filed with the Department of State was signed by Mr Appel as President of Laurel Canyon Ltd and Mr Kurz as its Secretary.

27. The CBS Agreement contemplated that recordings made by Mr Springsteen under that agreement might be made either at the studios of CBS or at some other place. Mr Springsteen, doubtless supported by Mr Appel and Mr Cretecos, preferred to record at a location not under the direct control of CBS and Mr Appel found a suitable venue in New York. This was named 914 Sound Studios ("the 914 Studios"). Mr Springsteen began to record there soon after the CBS Agreement was signed. He does not appear to have recorded there before that time. The 914 Studios were owned by a third party who provided the recording engineer and recording equipment. Mr Appel said that Laurel Canyon Limited paid the cost of hiring the 914 Studios, although this cannot have been the case in respect of any recording undertaken before the end of June 1972, when Laurel Canyon Limited was incorporated.

28. The recordings made at the 914 Studios, or such of them as Mr Springsteen was prepared to allow to be released, were supplied to CBS Records under the CBS Agreement and CBS compiled and marketed Mr Springsteen's first album. This was called "Greetings from Asbury Park NJ" and it was released on 1st January 1973. The record sleeve included publishing credits to "Sioux City Music Ltd" and stated that the album was "Produced by Mike Appel and Jim Cretecos for Laurel Canyon Ltd". The album contained nine tracks. A few days before the album was released claims to copyright in the words and music of the songs on eight of these tracks were registered under the United States law of copyright in the name of Sioux City Music Ltd. The applications for registration were signed on behalf of Sioux City Music Ltd by Mr Cretecos.

29. Although Mr Springsteen's first album is said to have been acclaimed by the critics it achieved very limited commercial success. The same was the case with his second album, entitled "The Wild, The Innocent and The East Street Shuffle" which was released on 9th November 1973. The record sleeve gave a publishing credit to Laurel Canyon Music Ltd (which, of course, was the recently adopted name of the company formerly named Sioux City Music Ltd to which a similar credit was given on the sleeve of the first record) and stated that the record was produced by Mike Appel and Jim Cretecos for Laurel Canyon Ltd (which was the same attribution as the first album).

30. Early in 1974, or possibly at the end of 1973, the relationship between Mr Appel and Mr Cretecos broke up. The reasons for this appear to have been partly the personal circumstances of Mr Cretecos, who had recently married, and partly the financial strains caused by the lack of commercial success of the first two Bruce Springsteen albums, which had resulted in there being very little money for Mr Cretecos, Mr Appel or Mr Springsteen himself. It is not necessary to go into this break-up in any detail. There is no doubt that it occurred and there is also no doubt that the outcome of it was that Mr Appel purchased Mr Cretecos's holdings of fifty per cent of the shares in Laurel Canyon Ltd, Laurel Canyon Music Ltd and Laurel Canyon Management Ltd. He did not do so directly, because he had insufficient money to pay Mr Cretecos the modest sum of money (Mr Kurz said it was only $3000) which Mr Cretecos was prepared to accept for his shares. What happened was that Mr Kurz lent Mr Appel the money needed to pay Mr Cretecos and the shares were initially transferred by Mr Cretecos to Mr Kurz, who held them as collateral security for his loan. About a year later Mr Appel repaid Mr Kurz and Mr Kurz transferred the shares to him. From then on Mr Appel was the sole beneficial owner of the shares in the three companies and he ran those companies as his own.

31. It was not only Mr Cretecos who was depressed by the lack of commercial success of the first two albums. CBS Records, from which the two individuals who had previously supported Mr Springsteen had departed, became disenchanted with him and thought of dropping him by not renewing the recording agreement. It appears to have been only as the result of luck and determination on the part of Mr Springsteen and those acting on his behalf that CBS was prevailed upon to exercise its option to renew the agreement. A third album was then produced and released in August 1975 under the name "Born to Run". It was an immediate success and sold over 1 million copies. As a result of this success, sales of the first and second albums increased substantially. This was the start of Mr Springsteen's international recognition as a star of popular music.

32. This success was followed by a break-up in the relationship between Mr Springsteen and Mr Appel. It is unnecessary to go into the reasons for this, but they seem to have been centred upon complaints by Mr Springsteen that Mr Appel was exploiting him and failing to pass on to him the money which he ought to have received. There was bitter litigation between the two of them in the United States. Although this litigation did not come to trial, Mr Appel, Mr Kurz and Mr Springsteen himself were deposed in the course of the proceedings and Mr Cretecos swore an affidavit on behalf of Mr Springsteen. Reference was made to this material at the present trial and I shall mention some parts of it later.

33. Eventually it was recognised that, whatever the truth of the allegations and counter-allegations made by Mr Appel and Mr Springsteen, the relationship between them had broken down and a clean break was inevitable. This was achieved by means of a lengthy agreement, described as "the Basic Agreement", made on 27th May 1977. The parties were (1) Mr Springsteen (2) Laurel Canyon Management Ltd, Laurel Canyon Ltd, Laurel Canyon Music Ltd "and their respective predecessors"; and (3) Mr Appel. I do not propose to describe its terms in detail. It will be sufficient to mention the following provisions, from which (contrary to what may appear to be the case) I have excised most of the excess verbiage:

34. On the same date as the Basic Agreement was entered into, Mr Springsteen and LCML entered into a Co-Publishing Agreement. Under this agreement Mr Springsteen and LCML were to own in equal shares the copyrights throughout the world in 34 specified songs. These included the songs entitled "Seaside Bar Song", "Hey Santa Anna" and "Song to Orphans" which I shall mention again later. These jointly owned copyrights were to be exploited by Mr Springsteen and LCML for their joint benefit in accordance with the terms of the Co-Publishing Agreement.

35. In 1977 Mr Springsteen also entered into a new recording agreement with CBS Records. The agreement itself is expressed to be dated 15th April 1977 and the term of the agreement is expressed to commence on that date, but certain internal indications in the document suggest that it was not actually executed until 16th December 1977 or some later date. Nothing turns upon this, except that the new agreement with CBS appears to make better commercial sense if it is seen as a consequence of the break between Mr Springsteen and Mr Appel and treated as having been entered into after the Basic Agreement was signed.

36. By the new CBS agreement Mr Springsteen agreed to record and deliver to CBS over a period of time eight new albums of recordings. For present purposes the important provisions of the agreement are Clauses 7.01 and 7.02. The effect of Clause 7.01 is that the copyright of all recordings made under the agreement was to belong to Mr Springsteen but CBS was to have a licence to manufacture and market copies of the recordings throughout the world during a specified period. I understand that this is an unusual agreement to be made between a record company and a recording artist. The record company usually insists upon owning the copyright in the recordings itself. Here CBS Records was content that the copyright in the recordings would belong to Mr Springsteen, CBS Records having only a licence to reproduce and otherwise exploit those recordings.

37. Clause 7.02 is in the following terms:

38. It is said in these proceedings that the effect of Clause 7.02 was to assign to Mr Springsteen the worldwide copyrights, or at any rate the United Kingdom copyrights, in any recording which had become the property of CBS under the initial Recording Agreement with CBS dated 9th June 1972. I shall examine this in due course.

39. I pass now to the year 1979. In April that year Mr Cretecos commenced proceedings against Mr Appel. The nature of these proceedings is of some interest. Mr Cretecos did not allege that there were any rights or property relating to Mr Springsteen remaining as the undistributed assets of a dissolved partnership between himself and Mr Appel. He seems to have proceeded on the assumption that whatever had belonged to any partnership consisting of himself and Mr Appel had become the property of one of the companies incorporated on behalf of the two of them in 1972 and 1973. His grievance was, in effect, that Mr Appel had cheated him into selling his shares in those companies at too low a price. Mr Appel said that he regarded this claim as having a mere nuisance value and that it was withdrawn by Mr Cretecos on payment to him of $40,000.

40. The next relevant event occurred in 1983. On 13th May of that year Mr Appel and various of his companies, including Laurel Canyon Music Ltd and "Sioux City Music", which were described as if they were separate entities, assigned to Mr Springsteen their interest in various musical compositions, including the three songs which I have earlier specially mentioned as being subject to the Co-Publishing Agreement entered into on 27th May 1977 (i.e. "Sea Side Bar Song", "Hey Santa Anna" and "Song to Orphans"). If, as Mr Springsteen claims in these proceedings, a half share in the copyrights in these compositions was vested in Laurel Canyon Music Ltd at the time of the Co-Publishing Agreement, this half share became the property of Mr Springsteen, who thus became the sole owner of the music and literary copyrights in these compositions.

41. On 1st July 1985 Mr Springsteen entered into a new recording agreement with CBS Records which varied the terms of the 1977 recording agreement in certain respects which are not material to these proceedings. In this agreement, as in the very first recording agreement dated 9th June 1972, the contracting party on the CBS side was described as "CBS Records a division of CBS Inc", so that the actual contracting party was the corporation named CBS Inc. On 1st November 1987 CBS Inc assigned to its wholly owned subsidiary, CBS Records Inc, all the assets of the business carried on as CBS Records. There seems to be no doubt that this assignment included the benefit of all the contracts I have hitherto described as being entered into by CBS Records, so far as those contracts remained subsisting. At a later date the shares in CBS Records Inc were acquired by the Sony Corporation of Japan and on 18th December 1990 CBS Records Inc changed its name to Sony Music Entertainment Inc, which is the name of the third defendant in each of the actions before me. The third defendant is thus the same company as CBS Records Inc which, in relation to the contracts which I have mentioned, is the assignee of the original contracting party, CBS Inc.

42. I now turn to the material, so far as it is before the court, which shows how the defendants have come to act as they have done. The first relevant event is that on 25th August 1993 "Jim and Linda Cretecos", the first of whom is evidently the same person as the Jim Cretecos who worked with Mr Appel prior to 1974, purported to assign to an entity named Cedar International Ltd their rights and interests in certain master tapes. The contents of these master tapes and the circumstances in which Mr and Mrs Cretecos had obtained title to them were said to be set out in documents annexed to the letter of assignment, but no copies of these annexed documents were produced at trial. On 10th September 1993 Cedar International purported to assign to Paster Inc (a Cayman Islands company) its right title and interest in

43. Then, by what was described as a Bill of Sale dated 1st October 1993, Mr and Mrs Cretecos expressed themselves to transfer to Paster Inc property described as

44. On the same date, 1st October 1993, Paster Inc expressed itself to assign and transfer to Master Collections Inc, another Cayman Islands company,

45. At the end of 1993 or very early in 1994 a company named Dare International Limited ("Dare") offered for sale, or threatened to offer for sale, in the United Kingdom under the name "Prodigal Son", a double compact disc of songs composed and sung by Mr Springsteen. Mr Springsteen commenced proceedings to restrain this activity and on 14th January 1994 Jacob J, on an ex parte application, granted an injunction restraining Dare from selling any such compact disc. This restraint was subsequently continued in the form of undertakings given by Dare until the intended hearing of a motion by order. However on 19th December 1994 a consent order was made disposing of the action against Dare on the footing that Dare submitted to permanent injunctions restraining it from infringing Mr Springsteen's copyright in certain works specified in a schedule to the order.

46. From documents disclosed in these proceedings by the defendants, it appears that Master Collections Inc had purported to grant an oral licence to Dare to exploit these songs and that it revoked this licence during the course of the Dare proceedings. On 28th November 1994 Master Collections Inc expressed itself to assign to Mr and Mrs Cretecos its interest in the Bruce Springsteen Master Catalogue, which was described in the same terms as in the assignment from Paster Inc dated 1st October 1993.

47. The next event of which there is any record before the court is a document dated 17th April 1995 by which an entity named JEC Music USA Inc ("JEC") expressed itself to grant to an entity named Pony Express Records Inc ("Pony Express Inc") an exclusive license to exploit the sound recordings of Bruce Springsteen listed on an attached schedule, no copy of which was produced. There was evidence before the court that JEC is a company in which the interested parties are a Mr Dan Jordan, a Mr Michael Esposito and a Mr Frank Cozzarelli, a New Jersey attorney. There was nothing to show how JEC claimed to have acquired the rights which it purported to grant to Pony Express Inc. except an undated copy of a letter from JEC to Jim and Linda Cretecos purporting to assign the copyright in certain Master Tapes listed in "Attachment A", no copy of which was produced, and referring also to Attachments B and C, no copies of which were produced.

48. On 9th May 1995 JEC was registered under the United States Copyright Code as the owner of the copyright in the words and music of a substantial number of songs composed by Mr Springsteen. I do not propose to list them in this judgment.

49. On 6th June 1995 Pony Express Inc was registered under the same law as the owner of the copyright in the sound recordings and performance of a work entitled "Before the Fame" and fifteen named songs of which Mr Springsteen was said to be the author. On 10th August 1995 Pony Express Inc was similarly registered as the owner in the copyright of the sound recordings and performance of a work entitled "Before the Fame, Volume Two" and three other named songs of which Mr Springsteen was likewise said to be the author.

50. The next event about which I heard evidence occurred in April or May 1996, when Mr Winter, the moving force behind Masquerade, heard that JEC and Pony Express Inc were claiming to have the right to exploit certain sound recordings in performances by Mr Springsteen. Mr Winter was very interested in acquiring a licence to publish these recordings. He said that he knew about the Dare litigation in the preceding year (he was well-acquainted with Mr Dare) and thought it odd that someone other than Mr Springsteen was seeking to exploit the recordings. He therefore caused his then solicitor to make inquiries as to the title of JEC and Pony Express Inc and, as a result of these inquiries, considered that their claims were justified. Mr Winter resolved to try to obtain a licence in favour of Masquerade from JEC and Pony Express Inc. He said that he envisaged that, if he succeeded, Masquerade would use Flute, a company owned by a third party, to press the CDs and to distribute them on its behalf. He had some discussion with Flute. He or one of his companies had used Flute earlier in the year in relation to other recordings. His dealings with Flute appear to have been exclusively through Mr Tringham.

51. In June or July 1996 Mr Winter had to go into hospital for surgery and he was unable to take his discussions with JEC and Pony Express Inc any further during this period. He said that when he came out of hospital he discovered, to his chargin, that Flute had proceeded to press a CD of the Bruce Springsteen recordings which he had intended that Masquerade should exploit and was marketing this CD for itself. Mr Winter remonstrated with Mr Tringham, who said that the matter would be put right but never took any action to this end.

52. It seems that Flute may have taken the initiative at a somewhat earlier time than Mr Winter suggested, for there exists a leaflet, presumably issued by Flute, announcing the availability on 17th June 1996 of a CD entitled "Springsteen Unearthed" which contained "16 previously unreleased studio tracks recorded during the period 1972-1976" and was to be distributed by Flute.

53. It was probably the circulation of this leaflet which led to the issue by Sony of a circular dated 13th June 1996 which warned that "Unearthed" was an unauthorised private recording issued in violation of Sony's exclusive worldwide rights to manufacture distribute and sell records embodying the performances of Mr Springsteen. This circular was widely distributed to persons engaged in or connected with the music business.

54. Flute's announced intentions brought forth an immediate protest from Sony which led to an apparent assurance from Flute that it would not release "Springsteen Unearthed". However it is asserted that Flute did not abide by the assurance. On 31st July 1996 Mr Springsteen caused to be issued the writ in the first of the actions which, after consolidation, I have referred to as "the Flute action". The correspondence shows that Mr Springsteen refrained from seeking an interlocutory injunction in that action in consideration of a contractual undertaking on the part of Flute in terms which were regarded as satisfactory.

55. It is alleged in the pleadings in the Flute action that in November 1996 it was discovered that Flute had put onto the market under the name "Unearthed" a CD which was identical to the earlier CD entitled "Bruce Springsteen Unearthed", save that three of the tracks on the on the first CD were omitted and three other recordings of Springsteen compositions and performances were substituted. This new CD has been referred to in these proceedings as "Unearthed II". Mr Springsteen then on 11th December 1996 caused to be issued the writ in the second of the actions which were later consolidated. Again assurances or undertakings were given which sufficed to persuade Mr Springsteen not to seek an interlocutory injunction in respect of "Unearthed II".

56. "Unearthed" contained, on the inlay of its case amongst other credits a statement that it was "Licensed from Masquerade Music Ltd". This prompted those representing Mr Springsteen to write to Masquerade, but they were informed that Masquerade had no involvement with the activities of Flute.

57. According to his own evidence Mr Winter became aware in about February 1997 that, whether by reason of the proceedings taken by Mr Springsteen or for other reasons, Flute was no longer able to trade and that there was a dispute of some kind between Flute and JEC and Pony Express Inc . He therefore approached JEC and Pony Express Inc "to see if I could take over from where [Flute] left off". His approach led to an agreement in the form of a memorandum dated 13th March 1997 signed by Mr Winter on behalf of Masquerade and Mr Esposito on behalf of "Pony Express Ltd" which is apparently an English company connected in some way with Pony Express Inc. The memorandum is headed "Bruce Springsteen - Before the Fame". In substance it appears to constitute a licence for Masquerade to manufacture and market a designated product throughout the world. The product was described as a compact disc containing 13 sound recordings by Bruce Springsteen that Pony Express Ltd had entitled "Before the Fame". A copy of this product containing the 13 tracks was said to have been delivered to Masquerade on or about 1st March 1997. The memorandum contained provisions requiring Masquerade to bring to an end the activities of Flute and Mr Tringham in relation to the CD "Unearthed" and to take all necessary steps to protect the interests of JEC and Pony Express Records within the territory to which the licence extended and relating to "the Bruce Springsteen project".

58. On 14th March 1997 the writ in the Masquerade action was issued. The basis of the action against Masquerade at that stage was that Masquerade was said to have authorised the production and marketing of one or both of the "Unearthed" CDs. However, two further events led to the scope of that action being widened. The first was that shortly before October 1997 Masquerade imported from JEC or Pony Express Inc in the United States 75 units of a "Before the Fame" CD which had been produced in the United States. On 1st October 1997 these 75 units were invoiced by Masquerade to a company named Silver Sounds CD Ltd, which I understand to be a record dealer or distributor. Mr Winter said that this was done at the suggestion of those advising JEC and Pony Express Inc in America, the reason for it being that they considered that it would be helpful to Masquerade to be able to show that CDs produced outside the United Kingdom on the authority of persons other than Masquerade were in circulation in the United Kingdom.

59. The second event was that on 28th October 1997 the solicitors then representing Masquerade and Mr Winter informed Mr Springsteen's solicitors that Masquerade was

60. I have so far refrained from going into detail concerning the particular compositions which have been included in the various CDs which I have mentioned as being issued or proposed to be issued since about 1994. I think it will now be convenient to set out this information in tabular form as follows, a cross indicating that the composition is included on the CD:

61. As I indicated much earlier, the defence raised to Mr Springsteen's claims in both actions consists of an attack on Mr Springsteen's claimed title rather than an affirmative case that the defendants themselves have a good title to the relevant copyrights. I must therefore set out the various links in the chain by which Mr Springsteen claims title.

62. It is convenient to begin by mentioning that it was common ground between the parties that Mr Springsteen was the author of the words and the composer of the music of all the compositions I have mentioned in the table set out above. It was also common ground that the recordings included or proposed to be included in the various CDs I have specified are, or are derived from, original recordings made by Mr Springsteen himself. In some cases they have been altered in one way or another, usually by the addition of extra instrumental sounds, but it is accepted that they are reproductions of the original recordings for the purpose of copyright law.

63. Having noted these facts I must set out the chain of title separately in relation to

64. Mr Tritton's attack on Mr Springsteen's title to the recordings was based on the proposition that, in the case of each recording, the maker was not the entity which Mr Springsteen claims to have been the maker but Mr Cretecos, who retained the resulting copyright for himself. If this be wrong, Mr. Tritton argued that any copyrights in sound recordings which became vested in CBS Records were not assigned by CBS Records to Mr. Springsteen in 1977, as Mr. Springsteen contends, but must be taken to remain vested in Sony, as CBS Records has now become.

65. I must now seek to resolve the issues which arise in these proceedings. I shall preface my consideration of each issue with a heading which seeks to encapsulate the substance of that issue.

66. This is a fundamental issue but it is one which I do not find it difficult to resolve. I have no doubt that Mr Appel and Mr Cretecos were, from the outset of their dealings with Mr Springsteen until their activities were taken over by one or other of the companies which they incorporated, equal partners in all their activities connected with Mr. Springsteen.

67. The evidence in support of this conclusion was, in my judgment, overwhelming. Mr Springsteen said that both Mr Appel and Mr Cretecos told him that this was their relationship. Mr Appel said in his evidence to me that it was their relationship. So did Mr Kurz, who was the attorney for both Mr. Appel and Mr. Cretecos. Mr Appel and Mr Cretecos themselves recorded that they were in partnership together by means of the certificates which they filed under the New York General Business Law in relation to the use of the business names "Laurel Canyon Productions" and "Laurel Canyon Management". It was the perception of Mr Vincent Robert Lopez, who was the drummer in the band which performed with Mr Springsteen from about 1967 or 1968 until February 1974 and whose written statement was received in evidence under the Civil Evidence Act 1968, that Mr. Appel and Mr. Cretecos were partners. The same view was also endorsed by Mr Cretecos himself in an affidavit which he swore on 21st November 1976 in the proceedings between Mr Springsteen and Mr Appel. In particular Mr Cretecos said

10. This statement seems to relate to the whole of 1972, both before and after the corporations were formed, and the reference to "those companies" seems to apply to the unincorporated entities which entered into the contracts which he mentions.

68. Apart from these considerations, it made complete commercial sense for Mr Appel and Mr Cretecos to be equal partners in relation to Mr Springsteen, whose talents they hoped to exploit for their own joint benefit as well as for Mr Springsteen's benefit.

69. These are the issues which underlie the defendants' attack on what I have described as links 1(1)(b) and 1(2)(b) in Mr Springsteen's chain of title to the copyrights in the words and music of the relevant compositions. The defendants contend that there was such an antecedent agreement and that, having regard to its terms, it prevented the Songwriter's Agreement of May 1972 from passing the copyright in any composition to SCMI. No antecedent agreement of the kind propounded by the defendants has been produced in evidence, whether in original or copy form. The defendants contend,however, that it can be seen from other material not only that there was such an agreement but also that its terms were such as to lead to the result for which they contend.

70. The steps in the argument which was said to lead to this conclusion were as follows:-

71. While one cannot help but admire the ingenuity, not to say audacity, of this argument it is, in my judgment, devoid of any credibility. It is not supported by any evidence beyond some references to a fear of what Mr Farrell might claim and the mention of Exhibit A. All the important steps represent pure speculation. But if one were to resort to speculation it is, to my mind, much more likely that Exhibit A was indeed the printed form which was used as the basis of the Songwriter's Agreement entered into in May 1972, that the Agreement of May 1972 was the agreement contemplated by Clause 9 and that there was no antecedent Songwriter's Agreement between Mr Springsteen and anyone else.

72. If it be possible to hammer a final nail into a coffin so thoroughly sealed it comes from the fact that Mr Cretecos himself signed the Songwriter's Agreement of May 1972 on behalf of SCMI. Yet if Mr Tritton's argument were correct that Songwriter's Agreement would be wholly inconsistent with the earlier assumed agreement in favour of Mr Cretecos himself. Had the assumed agreement existed I cannot believe that Mr Cretecos would have been prepared for SCMI to enter into the conflicting agreement. The explanation can only be, in my view, that the assumed agreement never existed.

73. The next attack launched by Mr Tritton was on what I have described as links 1(1)(c) and 1(2)(c) in Mr Springsteen's chain of title to the copyrights in words and music. What is said is that even if the Songwriter's Agreement of May 1972 was an effective agreement it vested the relevant copyrights in Mr Cretecos because "Sioux City Music Inc." was the trading name of Mr Cretecos alone, not the trading name of a partnership between Mr Appel and Mr Cretecos.

74. I have no hesitation in rejecting the contentions of the defendants on this issue and accepting those of Mr Springsteen. I summarise my reasons as follows:-

75. This is a much more difficult issue to decide than those which I have hitherto considered.

76. I am concerned in this action only with the United Kingdom copyrights in the relevant compositions. As the compositions date from a time not later than 1973, the devolution of copyright in them remains governed by the Copyright Act 1956. Under Section 36(1) of that Act the copyrights are transmissible by (inter alia) assignment. But by Section 36(3):

77. The problem which Mr Springsteen faces is that, although he asserts that there was a written assignment which satisfied Section 36(3), he is unable to produce the original or any copy of such an assignment. On his behalf Mr Davis has submitted that I should accept secondary evidence of the suggested assignment and find that such an assignment was indeed executed.

78. Mr Tritton submitted that I ought not to accept that the terms of the assignment can be proved in this way. He did not go so far as to say that an assignment of this kind could never be proved by secondary evidence, but he said that a party seeking to adduce secondary evidence must first establish that the missing document has been diligently searched for. The more important the document, the more diligent must be the search. The alleged assignment is a document of commercial importance in Mr Springsteen's chain of title. Mr Tritton argued that the search for it has not been sufficiently diligent.

79. Mr Tritton cited a number of authorities, some of them of considerable antiquity. I think that the court adopted a more strict approach 100 and more years ago than that which it adopts today and I consider that no real guidance as to the modern practice is to be obtained from cases decided in the last century. The point has arisen, in one context or another, on a number of occasions in the last 30 years and I prefer to concentrate my attention on the more recent cases. I was referred by one party or the other to Garton -v- Hunter [1969] 2 QB 37; R -v- Nowaz [1976] 3 All ER 5; R -v- Wayte [1983] 76 Cr.App.Rep. 110; and R -v- Governor of Pentonville Prison, ex parte Osman [1990] 1 WLR 277 at pages 307-308. I take as a statement of the guiding principle the following passage from the judgment of Beldam J in R -v- Wayte, at pages 116-117:

80. This was followed in the Osman case, where the Divisional Court made (see [1990] 1 WLR at page 308) two other observations which are of relevance. First the Court said that while it would be "more than happy to say goodbye to the best evidence rule" and "the little loved best evidence rule has been dying for some time the recent authorities suggest that it is not quite dead".

81. Secondly the Divisional Court, applying the passage from the judgment of Beldam J in R -v- Wayte which I have cited above, went on to consider what was meant by a party having a document available in his hands. It said:

82. In the present case I accept - indeed it was not disputed - that Mr Springsteen does not have the original assignment (if there was one) or any copy of it. He was not himself a party to any such assignment and there is no reason to suppose that he ever did have it or a copy of it. If he was to produce the document he would have to obtain it from a third party. The evidence was that he has, through his representatives, made inquiry of Mr Kurz, who said that he was responsible for preparing the document, and of Mr Appel who was one of the assignors and a director of and ultimately sole shareholder in the assignee company. Neither of these persons was able to produce the original or any copy of the assignment, although both of them were positive that an assignment had been made. Mr Appel has also made inquiries of Mr Marc Elliot, the author of a book about Mr Springsteen to whom Mr Appel had supplied a number of documents (many of them published in the book) concerning Mr Springsteen and his dealings with Mr Appel and Mr Cretecos. Mr Elliot was unable to assist.

83. Mr Tritton submitted that these inquiries were not enough and that other inquiries could and should have been made. The evidence which I shall come to in a moment showed that the assignment, if there was one, must have been recorded in the minute books of SCMI. No corporate books of SCMI have been produced and Mr Tritton submitted that no proper search for them had been made. A study of the lengthy deposition of Mr Cretecos in the proceedings brought by him against Mr Appel in 1979 indicates that Mr Marks, the attorney then acting for Mr Appel, had copies of the relevant minutes in 1979. Mr Tritton complained that no sufficient inquiry had been made of Mr Marks to see if he still has such copies. Mr Tritton also pointed out that there was no evidence that Mr Parcher, the New York attorney who has acted for Mr Springsteen since 1976, had been asked whether he had copies of them, although it is likely, Mr Tritton suggested, that he received copies of them during the course of the 1976 proceedings between Mr Appel and Mr Springsteen.

84. If the principle were that a party seeking to adduce secondary oral evidence of the existence and contents of a document must first show that he has searched exhaustively for the original or an authentic copy of the document, Mr Springsteen would not, I think, come within it. But I take the principle to be that which emerges from the passages in the authorities which I have quoted. In particular the question is whether Mr Springsteen has such a document or could produce it in court without difficulty. I have no doubt that the answer to both parts of this question is in the negative.

85. I do not think it is necessary, in connection with the admissibility of secondary evidence, to consider whether more might have been done by way of searching for the document. That would, of course, be a relevant matter if it were suggested that the party seeking to adduce the secondary evidence had refrained from a more extensive search for better evidence for fear of what he might find. I did not understand such a suggestion to be made in this case. In any event I would find that what has been done on behalf of Mr Springsteen was reasonably thorough, albeit falling short of what might be considered to be exhaustive.

86. I proceed, therefore, to evaluate the secondary evidence of the existence and contents of an assignment of musical copyrights from SCMI to Sioux City Music Ltd. I start by considering what is said to be the form of the alleged assignment. This does not emerge with any great clarity from the pleadings or from the witness statements. I thought for some time that what was being alleged to have existed was what one might call a free-standing, express written assignment dealing specifically with the musical and literary copyrights vested in SCMI. It emerged, however, from the oral evidence of Mr Kurz that what he was asserting was that all the assets of each partnership between Mr Appel and Mr Cretecos were assigned by the partners to the relevant newly incorporated corporation by the use of a standard form of minute. The assets of Laurel Canyon Productions were assigned to Laurel Canyon Ltd; those of Laurel Canyon Management to Laurel Canyon Management Ltd; and those of Sioux City Music to Sioux City Music Ltd. Mr Kurz said that he was able to give evidence about this because he had arranged the incorporation of each company and it was part of his task to see to the transfer of the assets of each unincorporated business to the successor corporation. This was a matter of standard practice which he had carried out on many occasions for various clients. He said that he was in no doubt that he followed his standard practice in the case of the corporations formed on behalf of Mr Appel and Mr Cretecos.

87. Mr Kurz explained the mechanism which had been adopted by producing a standard form of the minutes of the initial meeting of the directors of a newly formed corporation. This standard form was supplied by a firm named Julius Blumberg, whose business includes that of providing forms and precedents of company documents. Mr Kurz said that he always used this form.

88. The form begins by recording certain formal matters, the election of the officers, the adoption of a corporate seal and a resolution that the corporation should carry on the business for which it was incorporated. It then proceeds as follows:

89. The form then contains a blank area, extending to more than a page, in which it was evidently intended that a copy of the proposal should be set out. There are next recitals of the deliberations on the proposal, culminating in the following resolutions:

90. After recording further resolutions of no significance for present purposes the form concludes with a space for a date to be inserted and other spaces in which the secretary, chairman and directors of the corporation were to sign.

91. Mr Kurz's evidence was that he prepared for each corporation a written proposal which constituted the proposal referred to in the minutes. The substance of the proposal in the case of Sioux City Music Ltd ("SCML") was that Mr Appel and Mr Cretecos, as the partners in SCMI, offered to transfer to SCML in return for shares in SCML all the copyrights and other assets belonging to SCMI. The proposal would have been expressed in such a way as to operate as an assignment upon its acceptance. This proposal was signed by Mr Appel and Mr Cretecos and a copy of it was incorporated in the blank space provided in the form of minutes. The only directors of SCML were Mr Appel and Mr Cretecos and they would have been present at the initial meeting, would have voted to accept on behalf of SCML the proposal which they had made as partners in SCMI. They would then have signed the minutes in the space provided for signatures at the end.

92. Mr Kurz's evidence was that the assets of the other Appel/Cretecos partnerships were transferred to the appropriate successor corporation in a similar way, the assets of Laurel Canyon Productions going to Laurel Canyon Ltd and those of Laurel Canyon Management going to Laurel Canyon Management Ltd.

93. This way of handling the matter seems to my English eyes to be somewhat unusual and informal, but Mr Kurz indicated that it was his standard practice to deal with the transfer of an unincorporated business to a newly formed corporation in this way and he indicated that this was the standard practice of other attorneys in New York. This seems to be supported by the fact that Julius Blumberg supply a standard form of minutes of the kind I have described. I heard no evidence to the contrary and I accept that this is the case. Moreover, I accept that, if the transaction was carried through in the way described by Mr Kurz, the copyright previously vested in SCMI was assigned by SCMI to SCML in a manner which satisfied the requirements of Section 36(3) of the Copyright Act 1956.

94. The real question which I have to consider is whether I am satisfied, on the balance of probabilities, that the transaction was carried through in the way which Mr Kurz described.

95. Unhappily I did not find Mr Kurz to be an altogether satisfactory witness. Clearly he has considerable experience and, no doubt, skill as a lawyer specialising in matters concerning music and entertainment. He did not, however, appear to me to have the clear-sighted analytical approach which a property lawyer, including a lawyer concerned with intellectual property, needs to have. He accepted that in relation to a number of matters, usually connected with the names of the various Appel/Cretecos entities, he had been careless or sloppy. The summary of the effect of his evidence which I have given above makes that evidence seem a lot clearer and more precise than it was in fact. I am satisfied that it is a fair summary of the substance of the evidence, but it does not reproduce the actual language of that evidence.

96. A large part of the difficulty was that Mr Kurz expressed himself in terms of dogmatic assertion rather than giving a cool clear and detailed account of the primary facts. Mr Tritton justifiably drew attention to the following instances. Dealing with the question of whether there had been an assignment of rights from Laurel Canyon Productions to Laurel Canyon Ltd he said

97. Mr Tritton also criticised the evidence of Mr Appel, who was the only other witness who claimed to be able to speak about the assignments. While he said that he was sure that he had instructed Mr Kurz to prepare assignments, that he and Mr Cretecos had signed them and that he remembered signing them, he could not escape the fact that in his deposition taken in November 1976 he had said that he could not be sure whether he and Mr Cretecos went through a form of assignment. This answer was given in relation to the supposed assignment from Laurel Canyon Productions to Laurel Canyon Ltd but it is clear that he made no distinction between the procedure adopted in relation to one company and that adopted in relation to another. He sought to explain the apparent contradiction between what he had said in November 1976 and what he said from the witness box at the trial by saying that, having been uncertain about the matter in 1976, he checked up on the position, apparently by consulting his lawyer Mr Marks, and that he was satisfied, from what Mr. Marks told him, that there had been assignments. He did not, however, say precisely what Mr. Marks had told him or what inquiries Mr. Marks himself had made. Mr Appel's evidence was not, therefore as strong as it had seemed at first to be.

98. Mr Tritton drew attention to a number of other factors which, he suggested, reinforced doubts about the credibility of the evidence of Mr Kurz and Mr Appel in respect of the assignments. These included the continuing reference to the relevant entity as "Laurel Canyon Productions Inc" after the time when, if Mr Kurz and Mr Appel are to be believed, the partnership of that name had assigned its rights to Laurel Canyon Ltd. The instances of this which were cited were letters dated 10th August 1972 and 15th October 1975 from CBS addressed to "Laurel Canyon Productions Inc" care of Mr Kurz. The first of these was countersigned by way of agreement on behalf of "Laurel Canyon Productions Inc" by Mr Appel and Mr Cretecos and constitutes the variation of the first CBS recording agreement which I have already referred to. The significance of this document is, however, much diminished by the fact that it was prepared by CBS which might not have been aware of any assignment from the partnership to the corporation which, assuming it to have been made, was then very recent. The second letter also came from CBS rather than from any Appel/Cretecos entity. I think it is consistent with Mr Kurz's imprecise approach to technical matters that he failed to notice what, if his evidence at trial is correct, represents a misdescription of the name of the entity for which he was acting.

99. Mr Tritton also drew attention to certain descriptions of the relevant entities which were used in the 1976 litigation between Mr Appel and Mr Springsteen. Thus Laurel Canyon was described in the pleadings as "formerly known as Laurel Canyon Productions Inc" when, if what Mr Kurz said is right, it should have been described as "successor in interest to" rather than "formerly known as". Mr Tritton urged that Mr Marks, who was responsible for this description, had the minute books and, if they recorded what is claimed, could and would have used the accurate description. Mr Tritton also referred to the heading to pleadings where LCML is described as "formerly known as SCMInc", not as "successor in interest to SCMInc".

100. Finally Mr Tritton suggested that it was strange that the Basic Agreement made no mention of the supposed assignments when its whole purpose was to re-assign to Mr Springsteen the property of which he had divested himself in favour of Appel/Cretecos entities.

101. Mr Tritton submitted that the absence of the original of the supposed assignments or any copy of them, the weakness of the oral evidence and the references in the documents of the kind which I have mentioned should, on balance, lead me to the conclusion that no assignments had been made. He suggested that it was strange, if there had been assignments, that no later document contains any reference to them.

102. Mr Davis, on behalf of Mr Springsteen, contended that, on the balance of probabilities, I should conclude that the assignments had taken place. He suggested that it was reasonable to suppose, in the absence of evidence to the contrary, that when Mr Appel and Mr Cretecos formed corporations to carry on their activities relating to Mr Springsteen, they should have wished to transfer to the new corporations all the assets of the partnerships which had previously carried on those activities. Despite the criticisms of the evidence of Mr Kurz and Mr Appel, both of them remained positive that there had been assignments. Mr Kurz emphasised that it was his usual practice to cause assignments to be effected by the means which he had described and there is no reason to suppose that he had departed from this practice. Indeed he was emphatic that he had not done so. He said

103. Mr Davis sought to match Mr Tritton's reliance on the absence of any mention of the supposed assignments in the Basic Agreement by saying that, if no assignments had been made it was surprising that the fact was not noticed by the lawyers who acted for Mr Appel in the 1976 litigation and the negotiations of the Basic Agreement. Had they noticed the deficiency they would surely have tried to rectify it, at least to the extent of getting Mr Appel to assign his interest in any outstanding partnership property. There is no indication of any problem of this kind having arisen and Mr Davis suggested that the proper inference to make was that the lawyers were satisfied that there was no such problem because assignments had been made.

104. I have set out the relevant evidence and the points which were made on each side in some detail because I have found this much the most difficult part of the case to decide. In the end I have concluded that the probability is that there were assignments of the kind that Mr Kurz deposed to. The criticisms of his testimony and the points derived from the documentation are not, in my view, of sufficient force to cause me to reject that evidence. There was no directly contradictory evidence and I must bear in mind that what was under consideration was a series of transactions which took place more than twenty five years ago between partnerships which were, tacitly at least, then thought to have come to an end and companies which appear to have had no commercial purpose since 1983 when LCML assigned to Mr Springsteen its half share in the musical copyrights which were subject to the Co-Publishing Agreement.

105. There are two other factors which are, I think, of some relevance. First, if it was the belief of Mr Cretecos that he had a personal interest in Mr Springsteen's copyrights after the incorporations of the companies, it is somewhat surprising that no mention was made of this fact when he sued Mr Appel in 1979. Secondly, if it were the case that some musical copyrights remained vested in Mr Appel and Mr Cretecos as partners after the companies were incorporated, this fact would be destructive of Mr Springsteen's chain of title but it would not establish any title on which the defendants could rely. The argument is therefore an unattractive one in the hands of the present defendants and I do not regret finding myself able to reject it.

106. I expressed the preceding issue in terms of an assignment from SCMI to SCML in the hope that this would assist in the achievement of clarity. But, as will already have become apparent, the relevant evidence was the same in respect of assignments from each of the three partnerships to the relevant successor corporations. For the reasons which I have already given, I find that there were assignments of the assets of LCP to Laurel Canyon Ltd and of the assets of LCM to LCML.

107. If, as I find, the literary and musical copyrights became vested in LCML shortly after its incorporation then links 1(1)(a) to (e) and 1(2)(a) to (e) in Mr Springsteen's chain of title are made good. There was no real challenge to links 1(1)(f) and (g) and 1(2)(f) (g) and (h) and I find these links to be established as well. My conclusion is that Mr Springsteen is, as he asserts, the owner of the United Kingdom copyright in the words and music of the compositions which were featured in "Unearthed", "Unearthed II" and "Before the Fame".

108. The next group of issues relates to the copyright in the recordings which feature on these CDs.

109. The reference to the commissioning of recordings at the end of Section 12(4) can be ignored because there is no question of any commissioning taking place here. The meaning of "maker" is to some extent explained in Section 12(8) and Section 48. By Section 12(8) the maker of a sound recording is the person who owns the record at the time when the recording is made. Section 48 provides that a "record" is

110. In order for there to be a United Kingdom copyright in a sound recording the maker of the recording must have been a "qualified person". This usually means that he must have been a British subject or, in the case of a corporation, be incorporated under the laws of some part of the United Kingdom. In the present case the maker of the recordings, whoever it was, was clearly a United States citizen or corporation. However this fact gives rise to no problem. The relevant provisions of the Copyright Act 1956 had, at the relevant time, been extended in such a way as to cause a United States citizen or corporation to be treated as a qualified person. As this was common ground between the parties I need not go into the detail of how this result was achieved.

111. The best evidence of where and when the relevant recordings were made, indeed the only evidence apart from a few remarks by Mr Appel, was given by Mr Springsteen. In paragraph 55 of his witness statement he divided the recordings into three categories. I will, however, take them in a different order from that in which they are presented in Mr. Springsteen's witness statement.

112. Mr Tritton urged on me that, if this was the case, the likelihood is that the recordings were made on apparatus owned by Mr Cretecos and on tapes owned and provided by him. Mr Tritton pointed out that, at the time, the partnership of Laurel Canyon Productions, which is said by Mr Springsteen to have been the maker of the recordings, had no receipts and he said it would not have been able to pay even the small cost of buying tapes.

113. I do not accept this conclusion. In my view the fundamental matter is my earlier finding that Mr Appel and Mr Cretecos were equal partners in all their dealings with Mr Springsteen. The making of these early recordings appears to have been an important part of their preparations for the promotion of Mr Springsteen. I do not think it at all likely that Mr Cretecos, who was then on good terms with his partner Mr Appel, would have gone against the interests of the partnership by making recordings which were to be his own separate property. If he had attempted to do this then it seems to me that he would have been required to treat the recordings so made as partnership property. Much the more likely scenario, in my view, is that Mr Cretecos made the recordings in his capacity as a partner. I do not think it matters greatly who paid for the physical tapes on which the recordings were made. If Mr Cretecos did so, which is very much a matter of conjecture, then I think he bought the tapes on behalf of the partnership and that, immediately on purchase, they became property of the partnership, Mr Cretecos having nothing more than a right to recoup himself in respect of the cost out of partnership funds as and when there were such funds out of which he could be reimbursed. If he was not in fact reimbursed this would not make the tapes his property. It would merely give him a credit item on the taking of the partnership accounts as between himself and Mr Appel.

114. I think that similar reasoning would apply if, contrary to what seems to me to be probable, the category (1) recordings were made at Wes Farrell's premises. I think it unlikely that Mr Appel and Mr Cretecos would have used tape belonging to Mr Farrell.

115. The entity which had entered into the CBS Recording Agreement was, as I have previously held, Laurel Canyon Productions, whose activities were taken over by Laurel Canyon Ltd soon after its incorporation on 29th June 1972. I see no reason to doubt the evidence of Mr Appel that it was Laurel Canyon Ltd, or perhaps Laurel Canyon Productions in respect of the first few weeks, which made and paid for the arrangements with the 914 Studios. While it was the 914 Studios which provided the recording equipment and they may well have provided the blank tapes as well, in the absence of evidence to the contrary, of which there was none, I would infer that the arrangements with the 914 Studios were such that the blank tapes used for making recordings became the property of Laurel Canyon Ltd (or Laurel Canyon Productions) immediately before they were used for recording purposes.

116. All the recordings in this category except The Lady and the Doctor were the subject of the supplemental agreement made in August 1972 between, as I find, Laurel Canyon Ltd and CBS Records. Under this agreement the copyright in these recordings was assigned to CBS Records. Mr Tritton suggested that this indicates that Mr Springsteen's evidence about the time and place at which these recordings were made is not correct. He contended that the recordings were made before the CBS Recording Agreement was entered into on 9th June 1972 because, if this was not so, there would have been no need for an assignment. This is not in accordance with Mr Springsteen's evidence but it is consistent with the terms of the letter of 10th August 1972 and may represent the true position. If that is the case then the analysis which I have set out in the preceding paragraph would not be applicable. But the supplementary agreement is expressed to be an assignment of the copyright in these recordings to CBS Records and it was signed on behalf of "Laurel Canyon Productions Inc" (which I regard as a misdescription of Laurel Canyon Ltd) by both Mr Appel and Mr Cretecos. Even if it were the case that, contrary to my view, Mr Cretecos had title to these recordings as his own separate property before this supplemental agreement was made, I cannot see how, after that agreement, Mr Cretecos could maintain this title against CBS Records.

117. This leaves outstanding The Lady and the Doctor. If, as Mr Springsteen said, this was recorded at the 914 Studios after 9th June then it was, in my judgment, made by Laurel Canyon Productions or Laurel Canyon Ltd. If it was made elsewhere before 9th June 1972 then the probability is that it was made in the same way as the category (1) recordings and the maker was Laurel Canyon Productions which later assigned its resulting copyright to Laurel Canyon Ltd.

118. I am therefore satisfied that, whether or not Mr Springsteen was correct in saying that the category (2) recordings were made at the 914 Studios after 9th June 1972, the maker of the recordings was either Laurel Canyon Ltd or the partnership named Laurel Canyon Productions. If it was the partnership then I find that it assigned its rights as maker to Laurel Canyon Ltd soon after that company was incorporated, the relevant considerations being those I have already discussed. But the copyright in the recordings of Visitation at Fort Horne, Jazz Musician and Arabian Night went to CBS Records by virtue of the supplemental agreement dated 10th August 1972, which in my judgment, operated as an assignment by Laurel Canyon Ltd to CBS Records.

119. The result of this consideration is as follows:-

120. The argument that it had this effect is based upon what is said to be the true construction of Clause 7.02 of the Agreement, which I have set out earlier in this judgment. It will be recalled that Clause 7.01 had stated that the copyright in all future recordings made by Mr Springsteen was to be the sole property of Mr Springsteen, CBS Records having only a licence to exploit such copyrights. Clause 7.02 consists of two sentences. The first sentence recites that Mr Springsteen had represented to CBS that LCL had assigned to Mr Springsteen all of its right title and interest in Springsteen recordings recorded or delivered to CBS under the agreement of 9th June 1972. The operative part of Clause 7.02 came in the second sentence which provides that

121. It is clear that "such Master Recordings" means the Master Recordings previously recorded or delivered to CBS under the agreement of 9th June 1972, as referred to in the first sentence. It is also clear, to my mind, that Clause 7.02 was intended to ensure that CBS was to enjoy in respect of such existing recordings the same licence as it was given by Clause 7.01 in respect of future recordings, subject only to a different commencement date for the 10 year licence period. The argument for Mr Springsteen was that Clause 7.01 was applied to the existing recordings not only in such a way as to have this effect but also so as to vest in Mr Springsteen the property in the recordings, subject to the licence. The opening words of Clause 7.01 state that

122. Mr Tritton's argument that this way of looking at Clause 7.02 is not correct was founded upon the recital, i.e. the first part of the Clause. That recorded that Mr Springsteen had represented to CBS that the copyright in existing recordings had been assigned by LCL to him. The second sentence proceeded on the basis that this was so and that Mr Springsteen was already the owner of the copyright in such recordings. On this footing it was natural that CBS should have sought the same licence to exploit existing recordings the copyright in which was vested in Mr Springsteen as it was to have to exploit future recordings the copyright in which was vested in Mr Springsteen. Mr Tritton argued that CBS cannot be taken to have assigned any copyrights to Mr Springsteen, for Clause 7.02 proceeds on the basis that no such assignment was necessary. It is one thing to take a licence to exploit copyrights vested in another party. It is quite a different thing to assign copyrights to another party and to take back a licence to exploit the assigned copyrights. Clause 7.02 is apt to do the first of these things but not the second.

123. Having considered the rival arguments on this point I find that the contentions of Mr Tritton carry greater conviction. If Clause 7.02 was intended to operate as an assignment of copyright and a grant back of a licence I think it would have been quite differently expressed. As it stands it is merely the grant of a licence in respect of copyrights assumed already to be in Mr Springsteen's ownership. As the copyrights already belonged to CBS the purported licence was wholly unnecessary. But this does not justify treating the Clause as an assignment. I find, therefore, that the copyright in the recordings of Jazz Musician, Arabian Night, Evacuation of the West, Seaside Bar Song and Hey Santa Anna are not vested in Mr Springsteen but remain outstanding in Sony Music Entertainment Inc as successor to CBS.

124. For the reasons which I have endeavoured to explain at what may appear to be excessive length I reach the conclusion that the copyright in the words and music of (i) all the songs which featured in "Unearthed" and "Unearthed II" and in the version of "Before the Fame" which Masquerade imported and (ii) all the songs which were intended to be included in the version of "Before the Fame"which Masquerade threatened to release was, at the time of the alleged infringements, and remains vested in Mr Springsteen. I conclude also that the copyright in most of the relevant sound recordings was, at the time of the alleged infringements, and remains vested in Mr Springsteen. However the copyright in the sound recordings of five songs (namely Jazz Musician, Arabian Night, Evacuation of the West, Seaside Bar Song and Hey Santa Anna) appears to be vested in Sony.

125. The fact that Mr Springsteen is not the owner of the copyright in these five recordings is, however, of little importance. The inclusion of these recordings in a CD not licensed by Mr Springsteen will still be an infringement of the copyright in the words and music of which Mr Springsteen is, I find, the owner.

126. Although, having regard to the stay of proceedings, I can make no findings which are binding on Flute, it is necessary for me to express a view about infringement on the part of Flute in order to deal with the claim against Mr Tringham. I did not hear a great deal of evidence about this at trial, largely because Mr Tritton accepted on behalf of Mr Tringham that Flute had reproduced or authorised the reproduction of the Springsteen compositions to which the action against Flute and Mr Tringham relates. The extent of the infringement is somewhat uncertain, but there was unchallenged evidence from Mr Michael Craig, an enforcement officer with the Trading Standards Department of Hounslow Borough Council, that his Department has seized some 54,000 copies of the "Unearthed" CD. These had been manufactured in the United Kingdom by a company named Mayron Multimedia to fulfil an order placed by Flute. All these CDs are infringing copies in that they are reproductions of songs in which the copyright in the words and music belongs to Mr Springsteen. Except as regards the recordings the copyright in which remains with Sony, they are also infringing reproductions of recordings in which the copyright belongs to Mr Springsteen.

127. Although Mr Tringham was not formally a director of Flute, all the evidence which I heard indicated that he was the directing mind and will of Flute and acted in all respects as if he was not only a director of Flute but its only director. In particular Mr Winter said that Mr Tringham and Flute were "one and the same" (Day 6, page 21, line 25). Mr Tringham did not give evidence and no witness was called to suggest that Mr Tringham's part was more restricted than this.

128. The circumstances in which a director may be held to be personally liable for a copyright infringement committed by his company were considered in Evans -v- Spritebrand Ltd [1985] 1 WLR 317. In a judgment with which the other members of the Court of Appeal agreed Slade LJ said (at pages 323-4):

129. It is clear from this and from other observations in that case that a director of a company is not liable for infringements committed by the company without any involvement on the part of the director. But where there is a sufficient degree of involvement there may be personal liability on the part of the director.

In PLG Research Ltd -v- Ardon International Ltd [1993] FSR 197, Aldous J said (at page 238):

19. I understand this to mean that it is necessary to look carefully at the conduct of the individual director and to see whether, if it had not been done as agent in the name and on behalf of the company, it would have made the director a joint tortfeasor. In the case of copyright infringement there is also an additional element in the form of Section 16(2) of the Copyright Designs and Patents Act 1988, under which there is an infringement of copyright not only where a person actually does any of the acts restricted by the copyright but also where a person authorises another to do any of those acts.

130. It appears to me that the identity of Flute and Mr Tringham was so complete that Flute could not and did not do anything which was not determined and directed by Mr Tringham without reference to anyone else. In these circumstances I see no escape from the conclusion that Mr Tringham is personally liable for the infringements of copyright committed by Flute.

131. It is provided by Section 97(2) of the Copyrights, etc. Act 1988 that

132. It is difficult to know how this Section ought to be applied in particular cases. I have been referred to the commentary in The Modern Law of Copyrights by Laddie, Prescott & Vitoria, 2nd edition, at paragraph 24.31, but this does not seem to take me very far towards an answer in any particular case. It does not seem to me that the infringement was particularly beneficial to either Flute or Mr Tringham. But the conduct of both was, in my view, quite seriously flagrant. Mr Winter, whose case I shall consider later, spoke about recordings of Mr Springsteen's compositions and recordings having a large and ready market. He estimated that Masquerade could sell some 2 million CDs over a period of time and if this were achieved a very substantial profit of between £5 and £10 million might be realised. I have no doubt that Mr Tringham made similar calculations. He appears, however, to have taken very few precautions against being found to be in breach of copyright. On the evidence before me he acted not only in breach of Mr Springsteen's rights but in a manner which was in conflict with Masquerade and Mr Winter, with whom he was negotiating a deal which would at least have given an air of plausibility to what was being done. He also seems to have acted without regard to the position of JEC and Pony Express Inc which appear to have been the true source of the material which Flute incorporated in "Unearthed" and "Unearthed II". Although there is no question of Flute having infringed any rights of Masquerade, JEC and Pony Express these factors lend emphasis to the flagrancy of Mr Tringham's conduct.

133. In my judgment this justifies an award of additional damages. The amount of such damages must depend on the extent of the infringement committed by Flute. Even if this went no further than bringing about the manufacture of the 54,000 CDs seized by Hounslow Trading Standards it seems to me to have been quite substantial. I have in mind that additional damages should be at the rate of perhaps £1 per CD for those produced but not sold and £5 per CD for those actually sold. But these matters will have to be formally determined on the inquiry as to damages which I shall order.

134. As I mentioned earlier it is said that Masquerade has infringed or threatened to infringe Mr Springsteen's copyright in three respects namely

135. There was nothing to support the first allegation of infringement beyond what appears on the inlay card of one of the "Unearthed" CDs. This seems to have been attributable to the unilateral act of Flute and Mr Davis very properly did not pursue the claim that it demonstrated a copyright infringement on the part of Masquerade.

136. The second allegation was admitted on behalf of Masquerade. There has been no actual infringement in this respect because the threat was not carried out. Accordingly no damages are appropriate in respect of this conduct, although an injunction should, in my judgment, be granted.

137. The third head of breach gives rise to greater difficulty. The allegation is one of what is described in the 1988 Act as secondary infringement. The material provision is that contained in Section 22 of the Act which states

138. It is not suggested that, at the time of the importation of the copies of "Before the Fame" Masquerade or Mr Winter actually knew that the imported CDs were infringing copies. What is said on behalf of Mr Springsteen is that Mr Winter, and through him Masquerade, had reason to believe that they were infringing copies. What is involved in this concept was considered in L A Gear Inc -v- Hi-Tec Sports Plc [1992] FSR 121. At first instance Morritt J said (at page 129):

139. I think it is clear that the burden of satisfying the court that Masquerade and Mr Winter had the requisite "reason to believe" lies upon Mr Springsteen. On his behalf Mr Davis relied upon the following points:

140. Mr Davis urged on me other points of the same nature which I will not set out. They are recorded in his written Outline Closing Submissions. All of them seem to me to have some degree of substance. Together they are, in my view, amply sufficient, in the absence of an adequate explanation on the part of Mr Winter, to establish that Mr Winter had reason to believe that the imported copies of "Before the Fame" were infringing copies.

141. Mr Tritton contended that I should find a sufficient explanation in (a) the evidence that Mr Winter did take considerable steps to investigate the title of JEC and Pony Express; (b) the absence at the time of any convincing pleading of Mr Springsteen's chain of title; (c) the existence of the United States copyright registrations effected by JEC and Pony Express Inc, which remain unchallenged by Mr. Springsteen; and (d) what was claimed to be the widespread availability in the United States of a version of "Before the Fame", without any challenge having been mounted by Mr. Springsteen.

142. I do not accept that these factors, whether singly or in conjunction with each other, are sufficient to outweigh those relied upon by Mr. Davis. While Mr Winter did undertake some investigation of title, the particular points made by Mr Davis are enough to show that this investigation was woefully inadequate. If it had been adequate it would surely have enabled Masquerade and Mr Winter at least to attempt to prove an affirmative case. As to the deficiencies in Mr Springsteen's pleaded case, while these undoubtedly existed at that time, Mr Winter knew very well that Mr Springsteen was maintaining a claim to be the copyright owner and he took the chance of being able to show that Mr Springsteen was wrong or bluffing. Had Mr Winter been able to rely upon a properly deployed rival chain of title his stance might have been plausible, but he could not do this. The United States copyright registrations carry little weight. I am concerned only with the United Kingdom copyrights, to which different considerations may be applicable. Moreover in his evidence Mr. Springsteen indicated that he would pursue his copyright claims in the United States now that his attention has been drawn to the position there. As to the suggested availability of "Before the Fame" in the United States, there was really no evidence of this before me beyond the production of one recently purchased copy of a CD.

143. In my view Mr Winter allowed his judgment to be overborne by his desire to make profits from "Before the Fame" if he could possibly do so and by the urgings of JEC and Pony Express Inc. with whom he was then in close liaison. I think that a reasonable man who was not subject to these pressures would have realised that the known facts pointed firmly towards the imported CDs being infringing copies under the copyright law of the United Kingdom. I find, therefore, that both Masquerade and Mr Winter had the "reason to believe" which is referred to in Section 22 of the 1988 Act. Accordingly I find that Masquerade infringed Mr Springsteen's copyright by importing the 75 CDs.

144. The considerations which are relevant to the personal liability of Mr Winter are those which I have already discussed in relation to Mr Tringham. It appears to me that Mr Winter was at least as heavily involved in the acts of Masquerade as Mr Tringham was in the acts of Flute. Indeed, although there is another shareholder in Masquerade apart from Mr Winter, I am not aware of anything which was done by Masquerade which was not done exclusively through the agency of Mr Winter. In these circumstances I am satisfied that Mr Winter is to be regarded as a joint-tortfeasor with Masquerade and as having himself authorised the doing of those acts of Masquerade which amount to infringement of Mr Springsteen's copyrights.

145. Although there is, on the pleadings, a claim for additional damages under Section 97(2) against both Masquerade and Mr Winter Mr Davis did not, in the event, press this claim. Having regard to the fact that the only actual breach of copyright on the part of these defendants relates to the importation of 75 infringing copies of Before the Fame, I am sure that this was the right decision. This was a comparatively minor breach. The other aspect of the case against these defendants, involving a threat to infringe which has not in the event been carried out, would not, in my view, justify an award of additional damages.