England and Wales Patents County Court

IN THE PATENTS COUNTY COURT

		Rolls Building 7 Rolls Buildings Fetter Lane London EC4A 1NL
		08/05/2013

Judge Birss :

1. The claimant (Mr Sheldon) is a professional photographer. He is a member of the British Press Photographers Association and a National Press Card holder. His clients include the NEC Group, EMI, Virgin Records and Birmingham Symphony Hall.
2. An internationally famous American pop star called Ke$ha had a UK tour in 2011. Special guests on the tour were another international famous pop duo called LMFAO. On 3^rd July 2011 the tour came to Birmingham. Mr Sheldon obtained exclusive access to Ke$ha's tour bus and took some photographs of Ke$ha and LMFAO. This case is about one of those photographs. The image shows the three individuals in a back stage party atmosphere, lounging together on a sofa with Ke$ha brandishing a bottle of champagne.
3. The defendant (Daybrook) runs a dance venue in Nottingham called Rock City. It is marketed as "the UK's best live venue and club".
4. In March 2012 Mr Sheldon found that Daybrook was using the photograph in connection with a poster advertising campaign for the defendant's "Floor Fillers" events which were due to be launched on 30^th March at Rock City.
5. As far as Mr Sheldon was concerned the use of the photograph by the defendant was unlicensed. He asked Daybrook to stop and sent the defendant an invoice for the use, totalling £1,351.00. The sum was based on Mr Sheldon's then understanding of the extent of the use of the photograph at that time. Sending the invoice reflects the fact that Mr Sheldon's business involves the licensing of the use of his photographs.
6. Daybrook's position was and always has been that it accepts the photograph has been used but that it did not appreciate that this was an image which it was not entitled to use. Ms Tippins, the operations manager of Daybrook, explains that the photograph was freely available on the tumblr social network website. Ms Tippins explains that Daybrook had a genuinely held mistaken belief that this meant the photograph had been posted onto the site to be freely used. She also explains that irrespective of the legal merits of that position, had Daybrook realised this was not the intention of the claimant (or indeed that the claimant was perhaps unaware that his photograph had been so posted) it would not have made use of the photograph. Ms Tippins explains that Daybrook regularly pays for photographs and engages a variety of photographers to assist it with promoting its events and activities.
7. However as far as Daybrook is concerned the value of this claim is low. The proper fee to be paid for the use of the photograph in this case should be measured in a few hundreds of pounds. In response to the invoice Daybrook offered £150.
8. Mr Sheldon started proceedings to recover the money he felt he was owed. The case began using the money claim online procedure and was therefore issued in Northampton County Court. It was transferred to the Patents County Court and a case management conference took place on 10^th December 2012. Both sides appeared by junior counsel and had instructed solicitors. By now Mr Sheldon believed that the photograph had been used more extensively and as part of a collage of images and that use had continued after the initial complaint. While Daybrook accepted that the image had been used, it did not accept that infringement had necessarily taken place either at all or in relation to the collage. Mr Sheldon had not sought additional damages for copyright infringement in his original claim form but sought permission to amend his statement of case to include such a claim.
9. At the CMC it became clear that the root of the difficulty in this case was the very different view the parties took as to what a fair licence fee would have been for the acts complained of. This involved two issues: the extent of the use of the photograph by Daybrook; and, of more significance given how far apart the parties were, what a reasonable licence fee would be for the use.
10. If, as Daybrook contended, the claim was worth only £150 or thereabouts then it was manifestly disproportionate to spend any time or cost on the matter at all. Apart from anything else if that was what the claim was worth then no doubt Daybrook would not incur any time or cost debating infringement itself. If the proper sum was less than £5,000 then, based on the limits applicable at that time, the case should be allocated to the Patents County Court small claims track, where it could be dealt with in a proportionate way. However if, as Mr Sheldon now contended, the claim was worth more than £5,000 then the matter should not be allocated to the small claims track and should be dealt with in the Patents County Court using the normal multitrack procedure.
11. I decided that the best way to take this case forward was to decide the question of quantum as soon as practicable and in a cost effective manner. The directions made at the CMC provided for witness statements on that issue and written submissions. The issue of quantum would be decided on paper. The amount in question is not concerned with any claim for additional damages. The question is and is only what damages would be awarded to Mr Sheldon assuming, which is not admitted, the acts committed by Daybrook in relation to the photograph were indeed acts of infringement of copyright owned by Mr Sheldon.
12. The evidence before me consists of three witness statements of Mr Sheldon and two statements of Ms Tippins. Each side has also made written submissions.
13. Assuming the reproduction and use of the photograph by Daybrook was an infringement of Mr Sheldon's copyright then, since Mr Sheldon has a business as a licensor of copyright in such photographs I will take the correct measure of damages to be a reasonable royalty, i.e. the licence fee which would have been agreed between a willing licensor and a willing licensee having regard to the nature of the right and all the circumstances.
14. Daybrook contends the reasonable royalty in this case would be a few hundred pounds. It relies on a quotation of £366 from a photographer, David Baird, for a single image for a club night poster with a print run of 10 (6x4 inches) and a run of 10,000 postcards. The price is based on the photo being used on a promotional poster for a weekly club night at Rock City with a small print run and displayed on the interior and exterior of the club and postcard sized flyers distributed around Nottingham. The cost was calculated using professional software called fotoQuote which is built into Mr Baird's website.
15. Mr Baird is someone Daybrook regularly engages for work. Ms Tippins explains that a quotation of around this value would be quite usual and anything considerably higher would be received with great surprise by any venue or promotions company. Ms Tippins also refers to some other quotations for photographs with fees of £100 (from Mark Latham) and £75 (from Danny Payne). Danny Payne had explained that he was contractually restricted from selling photographs of many high profile bands but Ms Tippins stated that there must be no contractual restriction in this case given that Mr Sheldon's image of the Ke$ha/LMFAO is still available on the internet.
16. Ms Tippins addressed the extent of Daybrook's use of the photograph. She said it was used for the "Floorfiller" event and that Daybrook would have produced posters and some flyers as well as having a limited online presence. The exposure would be in a purely local context. The 200 posters and 10,000 flyers would have cost £2-300 to produce. She states that Daybrook had no intention of using the photograph any more widely than that and would not have paid any more for such wider use.
17. Ms Tippins ends her first statement by explaining that Daybrook cannot conceive of any circumstance in which it or any other company like it would have been prepared to pay more than a few hundred pounds for the use of a photograph like this one in a collage. She says she is unaware of any photographer ever selling a photograph like this for more than a few hundred pounds and suspects the claim is inflated because Mr Sheldon has incurred high legal fees in bringing this claim. She is concerned that the costs have already far exceeded a reasonable level for this claim.
18. Mr Sheldon's position was the following.
19. First, Mr Sheldon contends that the artists featured in the photograph are award winning and internationally renowned. Mr Sheldon had exclusive access to their tour bus. Daybrook's suggestion that it is a commonplace for photographers to have such access is wrong. Mr Sheldon argues that the famous subject matter and the exclusive access are relevant to the sums a photographer in the claimant's position would charge to license such a photograph and increase the price.
20. Second, Mr Sheldon contends that the photograph was used quite extensively by Daybrook and for an extended period. Daybrook was required to give disclosure on the point, but no documents emerged from the reasonable search Daybrook carried out. The posters and flyers are no longer in existence. While it might seem surprising that no invoices or other records were found, Daybrook's solicitors confirmed there were no other documents to be disclosed. Thus the extent of the use has been estimated by Mr Sheldon. It was not disputed by Daybrook. The photograph was used as part of a montage of images in promotional material poster, independently as part of a banner of photographs in different promotional material and online in a montage. Mr Sheldon's investigations show it was used in a banner on a large poster (27?x 40?) in use in March 2012. It was used in placard posters which were carried by Daybrook's promotional team. These posters were about 20?x 24? in size. It was used in numerous smaller posters displayed inside Rock City as can be seen from photographs of the inside of the venue which appear on Rock City's Facebook page. These internal posters are about 11?x 14?. It was used on postcard sized flyers. Mr Sheldon suggests that since Daybrook rely on a quotation from Mr Baird for 10,000 flyers, one can safely assume that was the print run of the actual flyers. It has been used in online advertisements on the website for Rock City itself and on Daybrook's Facebook page. The montage was present on 11 March 2012. Once Mr Sheldon complained a blue pictogram was used to partially cover it but even then (and Mr Sheldon does not accept that the covering prevents copyright infringement) the uncovered image was still on the Rock City Facebook page in December 2012. Mr Sheldon estimates the images used on the websites were up to 728x900 pixels.
21. The third point is Mr Sheldon's estimates for the value of the use. Mr Sheldon prepared various estimates on two bases:

i) First Mr Sheldon produced what he called a "Quote pack" for national or regional advertising. Mr Sheldon produced a "quote pack" based on his own fotoQuote software and provided evidence of a range of quotations from other online photographic licence agencies: Getty Images, Retna and Rex Features. The lowest sum is £2,450 from Retna for 1 month's use of a generic non-exclusive photograph of a celebrity. There are a number of quotations in the range £6,000 - £9,000 for photographs of Rihanna or Harry Styles (of One Direction). These range from 1 to 12 months use and for regional or national advertising. Using his fotoQuote software Mr Sheldon produces a fee of £12,222.54 (ex VAT), which he believes would be increased by about 20% to £14,667.05 given the specific subject matter and characteristics of the image.

ii) Second Mr Sheldon produced a bespoke quotation, also using fotoQuote, based on the extent of the use of the image he had established. This produced a tighter range of figures than the "Quote pack" approach above. The lowest was £4,030 from Retna and the highest was £6,160 from Getty Images. Using his own fotoQuote software Mr Sheldon's figure was £4,735.31 which again he contended would be increased with a 20% mark up (see above) to £5,682.37.

Assessment

22. I accept Ms Tippins' evidence that Daybrook would not have expected to pay more than a few hundred pounds for a photograph they were going to use in this way. However, while it is not an irrelevant consideration, it is not the critical issue. The issue is not what sum would Daybrook have been prepared to pay for any photograph they intended to use in this promotional campaign. The question is focussed on the actual photograph Daybrook used. The reasonable royalty is one associated with the use of the particular copyright work in question. What would this copyright owner have earned for the reproduction of this photographic work by someone wishing to reproduce it?
23. On the debate about the importance of the renown of the artists and exclusivity, I prefer Mr Sheldon's submissions and evidence to the submissions and evidence from Daybrook. While no doubt there are pop stars who are more famous than Ke$ha and LMFAO, both are plainly very well known, and current acts. This will tend to increase the value of the photograph to some degree. A factor of even more importance is the exclusivity of access. One of the things which makes the photograph interesting is its back stage party atmosphere, which in turn derives from the exclusivity granted to Mr Sheldon. That is a factor which will enhance its value.
24. On the extent of the use made of the photograph, I accept Mr Sheldon's evidence.
25. As regards the amount of a licence fee, the estimates provided by Daybrook are not based on the actual reproduction which took place. That reduces their relevance but it is obvious that the real debate is about the fee level rather than the extent of use. If photographers like Mr Baird, Mr Latham and Mr Payne are prepared to accept sums in the region of £75 - £300 for the usage of a photograph on which their quotations were based, then even if one rebased the sums in accordance with the use actually made of the photograph in question, the sums would not increase by an order of magnitude and would not approach Mr Sheldon's figures.
26. Both Mr Sheldon and Mr Baird use the same fotoQuote software but Mr Sheldon's quotations are much higher. I prefer Mr Sheldon's evidence about the general level of fees which he would have been able to charge for this photograph for two main reasons. First Mr Sheldon's evidence is more detailed and contains convincing corroborative material from other sources such as Getty Images and Retna. Second I doubt it would be worthwhile for a photographer going to the trouble of gaining exclusive access to a location, just so as to licence the resulting photographs in this way for a few hundred pounds.
27. That said I reject Mr Sheldon's argument that the sums produced by the "Quote pack" approach produce the right answer. They are not based on the actual usage. The measure of damages should be based on the actual reproduction which took place. That means the most relevant elements of Mr Sheldon's evidence are the bespoke quotations. These produce a range of numbers from about £4,000 to £6,000. Mr Sheldon's own figure comes to £5,682.37. That includes the mark up as a result of the subject matter of the image, a point I have accepted.
28. I find that the correct measure of damages in this case would be £5,682.37. That sum is exclusive of VAT and interest.
29. On the matter of interest, a rate of 4% was sought by Mr Sheldon. That is too much. I will award interest at the rate of 1%.

Next steps

30. This is a decision on a preliminary issue. The judgment will be handed down, there will be no need to attend. Each party should make written submissions as to the way forward, those submissions to be no more than 2 pages long. The submissions should be filed in advance of the handing down. I envisage that the best way forward would be to stay the matter for a period of time, perhaps 6 weeks, to allow the parties to negotiate. Hopefully now that the preliminary issue has been resolved, the parties may be able to settle their differences. If the matter does not settle, then the case should be listed for a further CMC.
31. I should say a word about costs. The figure I have arrived at is more than the small claims limit applicable to this case but only by a small amount. This case is on the multitrack and therefore the PCC costs capping system in CPR part 45 section VII (now IV) applies. An important element in that system is that the scale costs are subject to r45.42(4) (now r45.31(4)). The amount of scale costs awarded by the court will depend on the nature and complexity of the claim. This claim is clearly at the lower end of that spectrum.