British Broadcasting Corporation & Anor v Mechanical-Copyright Protection Society Ltd & Ors, Court of Appeal - Chancery Division, November 06, 2018, [2018] EWHC 2931 (Ch)

Resolution Date:November 06, 2018
Issuing Organization:Chancery Division
Actores:British Broadcasting Corporation & Anor v Mechanical-Copyright Protection Society Ltd & Ors
 
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Case No: CH-2018-000129

Neutral Citation Number: [2018] EWHC 2931 (Ch)

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS

INTELLECTUAL PROPERTY LIST (CHANCERY DIVISION)

Rolls Building

Fetter Lane, London, EC4A 1NL

Date: 6 November 2018

Before :

MR JUSTICE ARNOLD

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Between :

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Rhodri Thompson QC and Lindsay Lane (instructed by BBC IP Litigation Department) for the BBC and BBCW

Robert Howe QC and James Segan (instructed by Simkins LLP) for MCPS and PRS

Martin Howe QC and Michael Conway (instructed by Sky Legal) for Sky

Hearing dates: 23-24 October 2018

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JudgmentMR JUSTICE ARNOLD :

Contents

Topic Paras

Introduction

1. This is an appeal against a decision of the Copyright Tribunal (Ms Colleen Keck, Dr Lucy Connors and Mr Philip Eve) dated 26 April 2018 on a preliminary issue in a reference under section 126 of the Copyright, Designs and Patents Act 1988 brought by the British Broadcasting Corporation (``the BBC'') and BBC Worldwide Ltd (``BBCW''). The preliminary issue was in the following terms:

``In this reference to what extent (if any) does the Tribunal have jurisdiction to set the terms of licences in issue (being the BBC Agreement, the DVD Licence and the DTO Licence as defined in the Reply on Jurisdiction) insofar as such licences concern copyrights subsisting under the laws of jurisdictions other than the United Kingdom?''

2. The Tribunal's answer to this question was that it had jurisdiction to set the terms of the licences insofar as such licences concern copyrights subsisting under the laws of jurisdictions other than the United Kingdom. Mechanical-Copyright Protection Society Ltd (``MCPS'') and Performing Right Society Ltd (``PRS'') (collectively ``PRSfM''), who are the respondents to the reference, contend that the Tribunal does not have such jurisdiction.

3. After the appeal had been filed, Respondents' notices filed, sequential skeleton arguments served and the appeal fixed for an expedited hearing, the parties entered into a confidential settlement agreement which provided that the reference would be withdrawn, but that the appeal should proceed subject to the Court's discretion as to whether to entertain it.

4. In Hutcheson v Popdog Ltd [2011] EWCA Civ 1580, [2012] 1 WLR 782 Lord Neuberger of Abbotsbury MR said at [15]:

``Both the cases and general principle seem to suggest that, save in exceptional circumstances, three requirements have to be satisfied before an appeal, which is academic as between the parties, may (and I mean `may') be allowed to proceed: (i) the court is satisfied that the appeal would raise a point of some general importance; (ii) the respondent to the appeal agrees to it proceeding, or is at least completely indemnified on costs and is not otherwise inappropriately prejudiced; (iii) the court is satisfied that both sides of the argument will be fully and properly ventilated.''

5. In the present case all the parties to the appeal submitted that all three of these requirements were satisfied. I agreed with this, and so I decided to allow the appeal to proceed. As is common ground, the fact that the underlying dispute has settled does not alter the fact that the jurisdictional issue must be decided by reference to the circumstances of the reference as they existed at the time of the Tribunal's decision.

Background

6. The following account of the background to the preliminary issue is based on that given by the Tribunal in its decision at [2]-[16].

7. The BBC is a public corporation established by Royal Charter in the UK. Its Royal Charter sets out its public purposes and defines the activities which may be carried out by it. These include:

i) provision of the UK Public Services;

ii) provision of the BBC World Service; and

iii) through commercial subsidiaries, commercial activities.

8. The BBC's commercial activities are carried out by its wholly-owned subsidiary BBCW, a company organised and existing under English law.

9. MCPS and PRS are both UK collecting societies organised and existing under English law and each of them has its principal place of business in the UK. Both organisations grant licences of both UK and non-UK copyrights in music, although the extent of their ability to grant licences of foreign copyrights differs and depends on various factors which it is unnecessary to go into for present purposes.

10. MCPS and PRS are separate legal entities, but by agreement the functions of MCPS are primarily managed and administered by PRS. Under this agreement licences may be granted jointly by PRS and MCPS.

11. Section 126 of the 1988 Act provides as follows:

``(1) A licensee under a licence which is due to expire, by effluxion of time or as a result of notice given by the licensing body, may apply to the Copyright Tribunal on the ground that it is unreasonable in the circumstances that the licence should cease to be in force.

(2) Such an application may not be made until the last three months before the licence is due to expire.

(3) A licence in respect of which a reference has been made to the Tribunal shall remain in operation until proceedings on the reference are concluded.

(4) If the Tribunal finds the application well-founded, it shall make an order declaring that the licensee shall continue to be entitled to the benefit of the licence on such terms as the Tribunal may determine to be reasonable in the circumstances.

(5) An order of the Tribunal under this section may be made so as to be in force indefinitely or for such period as the Tribunal may determine.''

12. By the reference, the BBC and BBCW sought an order extending four licences referred to as the BBC Agreement, the TV Sales Licence, the DVD Licence and the DTO Licence, which they contended were extant but due to expire on 31 December 2016, for a period of five years and three months with reduced licence fees.

13. Under the BBC Agreement, the BBC was granted a joint licence by MCPS and PRS for its publicly funded, non-commercial services.

14. The other three licences related to the BBC/BBCW's commercial (non-publicly funded) activities. There was a dispute between the parties as to what the precise contractual terms of the licences were. For the purposes of determining the preliminary issue, the Tribunal was not required to make, and did not make, any findings regarding the terms of the contractual relationship between the parties. It proceeded on the basis that the following licensed activities were involved:

i) the distribution and sale of BBC television programmes to other broadcasters (``the TV Sales Licence'');

ii) the distribution and sale in North America (i.e. Canada and USA) of DVDs of BBC television programmes made pursuant to the TV Sales Licence (``the DVD Licence''); and

iii) the provision of ``Download to Own'' (``DTO'') services to DTO suppliers in North America (i.e. Canada and USA) for television programmes made under the TV Sales Licence (``the DTO Licence'').

15. Save for the act of performing repertoire works in public, which was limited to the UK, the parties agreed that the BBC Agreement was predominantly a licence under UK copyrights, but also licensed acts restricted by non-UK copyrights (in particular, in relation to World Service radio broadcasts).

16. The TV Sales Licence was not relevant to the preliminary issue as it was believed that this licence related solely to the UK, although PRSfM reserved their position should it turn out that some licensed activities occurred outside the UK.

17. PRSfM contended that the DVD Licence was exclusively or predominantly a licence under non-UK copyrights. The BBC and BBCW's position was that the DVD Licence also covered the creation and making of product master and copies within the UK for the purposes of manufacture and distribution of DVDs in the USA and Canada.

18. The DTO Licence authorised (in essence) the distribution of programmes via DTO to end users in the USA and Canada, and for this purpose authorised the reproduction of the programmes on servers within much of Europe, the USA and Canada and such other territories as might be agreed. The BBC and BBCW's position was that the DTO Licence also authorised a variety of preparatory steps that were taken in the UK once a programme was made in order to make the DTO content available in the USA and Canada.

19. The Tribunal considered that, as a matter of practicality and commerciality, licensed activities occurring inside the UK were intertwined with the licensed activities occurring outside the UK, and that there was some degree of interconnectedness among the licence terms for the various activities.

20. There was no dispute that all agreements were governed by English law and that the English courts had jurisdiction over disputes arising under those agreements.

21. Sky UK Ltd (``Sky''), one of the interveners, is a UK broadcaster whose services include a satellite service originating from the UK that delivers Sky News content to 138 countries. It supported the BBC and BBCW's position on jurisdiction and also advanced an alternative argument of its own which is the subject of a Respondent's Notice on the appeal.

22. ITV Network Ltd, the other intervener, did not participate in the preliminary issue.

The jurisdiction of a statutory tribunal

23. The Copyright Tribunal is a statutory tribunal. It is common ground that a statutory tribunal is a creature of statute, and as such it has no inherent jurisdiction: its jurisdiction is determined solely by the relevant statute, properly construed. If a statutory tribunal has jurisdiction over a particular issue, then such jurisdiction is mandatory; there is no power to exercise control by means of doctrines such as forum non conveniens.

24. It follows that the question whether the Copyright Tribunal has jurisdiction with respect to licences of foreign copyrights...

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