A music publisher, BSI Enterprises Limited, has failed to overturn a 2014 High Court decision on the ownership of copyright in certain Bob Marley songs, including “No Woman No Cry”.1 Ownership of the copyrights depended on the interpretation of assignment wording under a March 1992 agreement with Island Logic Limited, which covered all of Marley’s “presently-existing musical compositions”. Marley had misattributed the songs to other writers to try to divert royalties from his record company. Rejecting the appeal, the Court of Appeal held that the songs fell within the scope of the assignment to Island, finding that they were “Compositions” within the meaning of the agreement. The other provisions of the agreement, whether considered individually or collectively, could not displace the express wording of the assignment clause.
The trial took place before deputy judge Richard Meade QC in 2014. The claimants, BSI and its licensee Cayman Music Limited (CML), sought declarations that BSI is the owner and CML the exclusive licensee of copyrights in the music and lyrics of the songs in question. They also claimed an account of sums had and received by the defendant, Blue Mountain Music Limited (a publishing company associated with Island).
Ownership of the copyrights depended on the proper interpretation of the March 1992 agreement. At the date of the agreement, the copyrights belonged to Cayman Music Inc. (CMI). Blue Mountain asserted that the copyrights passed to Island under the agreement. The claimants asserted that the copyrights remained with CMI, from which BSI later acquired them. The songs were not expressly listed in the agreement. The deputy judge held that BSI did not own the copyrights in the songs because they passed to Island under the agreement.
On appeal the claimants abandoned the case that they had advanced at trial. Instead, they sought permission to advance different arguments that the agreement did not, on its proper interpretation, include the songs. Accordingly, the decision on appeal essentially turned on interpretation of the factual matrix.
Bob Marley made a publishing agreement with Johnny Nash Music Limited in 1968. He signed as a recording artist with Chris Blackwell’s Island Records in 1972. On 11 October 1973 he entered into a publishing agreement with Danny Sims’ publishing company, CMI.
Between 1973 and 1976 Bob Marley wrote the songs in question. He deliberately misattributed their authorship to various friends and associates to gain control of the copyrights from CMI. His justification for this misattribution ploy was that he had not been paid any publishing royalties under the 1968 agreement or 1973 agreement. Chris Blackwell was made aware of the misattribution ploy in around 1974, yet Island still paid mechanical royalties to the misattributed authors.
Bob Marley died in 1981. In 1984, CMI sued Marley’s estate over the misattribution ploy in an action before a New York court. The claim was dismissed in January 1988 on limitation grounds, but the court did not rule on a counterclaim by the estate to rescind the 1968 and 1973 publishing agreements. Subsequently, Island decided to seek to acquire the rights in Bob Marley’s works and made an agreement with his estate on 27 April 1988. A further agreement was made on 10 September 1992.
Between the 1988 agreement and the September 1992 agreement, Danny Sims tried to sell rights in various Bob Marley works, including works obtained under the 1968 agreement and 1973 agreement. This led to the negotiation and conclusion of the March 1992 agreement between CMI and Island Logic Limited.
In 2006, Mr Justice Lewison gave judgment in a High Court claim brought by Aston “Family Man” Barrett claiming rights in six of the songs. Chris Blackwell gave evidence for the defence, stating that those six compositions were not included in the March 1992 agreement. (He later gave evidence at the trial in the present case that this assertion was in fact incorrect.) This inspired BSI to buy the copyrights from CMI under a May 2008 agreement. Subsequently, in 2011, BSI granted an exclusive licence to CML.
March 1992 agreement
So the interpretation of the March 1992 agreement was of paramount importance to the case, and the parties sought to rely on the following clauses in particular:
- the “Preliminary Statement” that Island wished to purchase, and CMI wished to sell, “certain …. music publishing rights and interests”;
- clause 1.8, which stated under the heading “Compositions” and “Catalogue” that:
“The term ‘Catalogue’ shall mean all presently-existing musical compositions … consisting of lyrics and/or music … written recorded [sic] by [Bob] Marley… and/or certain musical compositions written or composed by Alfonso Pyfrom and/or Jimmy Norman (which were recorded by … [Bob] Marley … ) … (individually a ‘Composition’ and collectively the ‘Compositions’) and all right, title and interest in and to such Compositions, including all copyrights … to the extent such compositions, copyrights … are owned, controlled or administered … by any member of Seller or by Seller’s Music Publishing Business … including … the Catalogue listed on Schedule 2 … Compositions also include all musical compositions owned by Seller which were recorded by [Bob] Marley …”;
- clause 5.10, which defined “Compositions”, stating that:
“Schedule 2 contains a complete and accurate list of all of the Compositions…”;
- clause 5.11, which stated:
“Acquisition Documents, Songwriter Agreements and Licenses. Seller shall deliver to Buyer at the Closing the originals of all Acquisition Documents, Songwriter Agreements and License Agreements (in each case, including all amendments) pertaining to the Compositions, and such documents will be complete and accurate when delivered.”;
- Schedule 2, which contained a list of Compositions provided by CMI (but did not include any of the songs in question);
- Schedule 8A, which listed the encumbrances that CMI alleged to relate to the “Acquired Assets”; and
- Schedule 8B, which set out a list of compositions for which CMI made no warranty as to title.
Rules of contractual interpretation
There was no dispute between the parties as to the correct approach to contractual interpretation as a matter of English law.2 In giving the lead judgment, Lord Justice Kitchin referred to Mannai Investment Co. Ltd v Eagle Star Life Assurance Co. Ltd3 and Investors Compensation Scheme Ltd v West Bromwich Building Society,4 noting that the object is to determine what the parties meant by the language that they had used in the contract. This involves ascertaining the meaning that the language would convey to a reasonable person having all the background knowledge that would reasonably have been available to the parties in the situation in which they were at the time of the contract (i.e. the factual matrix), but excludes the previous negotiations of the parties and their declarations of subjective intent.
The claimants also sought to rely on the principle stated in Rainy Sky SA v Kookmin Bank that:
“… the court must have regard to all the relevant surrounding circumstances. If there are two possible constructions, the court is entitled to prefer the construction which is consistent with business common sense and to reject the other.” 5
Kitchin LJ referred to the factual matrix identified by the trial judge, which included the following:
- the 1968 and 1973 publishing agreements;
- the misattribution ploy;
- the New York action, in particular (i) CMI’s allegation of the misattribution ploy and (ii) the counterclaim, which was extant;
- the possibility that the misattribution ploy would be complained of in future litigation, and the unclear ownership of the misattributed works;
- the likelihood of “lost” works created by Bob Marley during the term of the 1973 agreement that had not been specifically identified;
- Island’s ongoing acquisition of the estate’s interest in Bob Marley’s creative output by means of the 1988 agreement, which remained under challenge, making it uncertain what form any final agreement would take;
- the general terms of the 1988 agreement between Island and Marley’s estate;
- Island’s wish to acquire as many Bob Marley rights as possible; and
- the registration of the songs in question at the US Copyright Office as written by the misattributed authors, and Island’s payment of royalties to such persons.
On appeal, it was common ground that:
- in March 1992 the copyrights in the songs belonged to CMI and not to the Marley estate;
- the New York claim had been dismissed for limitation reasons and not on the merits, and so it might be revived in some other forum; and
- if the copyrights were not transferred to Island by the March 1992 agreement, they were transferred to BSI in 2008.
Arguments and decision on appeal
The claimants raised various arguments on appeal, each of which was rejected by Kitchin LJ.
The claimants asserted that the “Preliminary Statement” referring to “certain” publishing interests meant that only some of CMI’s publishing interests were intended to be transferred. Kitchin LJ held that the claimants sought to attach far more weight to the word “certain” than it could possibly bear. Rather, it meant the extent of the assets was to be determined by reference to the terms of the agreement.
The claimants argued that, although clause 2.1 provided for the transfer of the “Acquired Assets” and that those included “Compositions”, the term “Compositions” was not defined in that clause. As for clause 1.8, the claimants submitted that the clause defined “Catalogue” but not “Composition”, and that the clause heading should be disregarded. Kitchin LJ rejected this because, appearing as they did at the head of clause 1.8, the words identified the particular terms defined in the clause.
In any event, Kitchin LJ noted that the words in the middle of the clause (“individually a ‘Composition’ and collectively the ‘Compositions’”) clearly signified that all of the works identified in the preceding words, including specifically musical compositions written and recorded by Bob Marley, were “Compositions” for the purposes of the agreement. Further, the closing words of clause 1.8 read: “… the Compositions also include all musical compositions owned by [CMI] which were recorded by [Bob] Marley.” He found that, again, those words encompassed the songs in question. Furthermore, if the parties had intended the term “Compositions” in clause 1.1 (covering “Acquired Assets”) to mean something different from “Compositions” as defined in clause 1.8, they would have used a different term.
The claimants submitted that the scope of the term “Composition” was to be found not in clause 1 but in clause 5.10. This stated that Schedule 2 contained “a complete and accurate list of all of the Compositions”. The claimants’ submission followed that only the compositions in Schedule 2 were transferred. Kitchin LJ rejected this. Clause 5.10 appeared in a section of the agreement concerned with the representations and warranties of CMI as the seller. Seen in context, the terminology of clause 5.10 was readily understandable: it contained a warranty that the various compositions set out in Schedule 2 were original creations and protectable under relevant copyright laws. Importantly, it did not purport to be a definition for the purposes of the agreement. Furthermore, Schedule 2 was specifically identified and referred to in clause 1.8 as providing a non-exhaustive list of the Compositions included in the Catalogue and forming part of the Acquired Assets.
Similarly, the claimants argued that clause 5.11 made it clear that the term Composition had the narrower meaning, i.e. the songs for which the relevant documents could and would be delivered – consistent with Schedule 10, which referred to the financial statements of revenues earned by CMI from the Acquired Assets. Kitchin LJ was unpersuaded and held that clause 5.11 simply required CMI to deliver to Island all documents that it had relating to the Compositions, and Schedule 10 did not purport to limit the scope of the term “Compositions” in any way.
The claimants criticised the deputy judge’s reasoning about Island’s desire to acquire as many Marley rights as it could, so presenting CMI with the best opportunity to maximise its profits. For the claimants, the deputy judge fell into error in seeking to ascertain the parties’ intentions and the scope of their agreement from the surrounding circumstances and then making the language of the March 1992 agreement yield to them. Kitchin LJ found, however, that the deputy judge directed himself entirely properly as to the relevant principles governing the interpretation of contracts and reminded himself that his task was to ascertain the meaning that the agreement would convey to a reasonable person having all the background knowledge that would have reasonably been available to the parties in the situation in which they were placed in 1992. The deputy judge emphasised that the intention of the parties was to be determined objectively, and that the meaning of the agreement was to be determined from the document itself having due regard to the factual matrix. Having done so, Kitchin LJ found that the deputy judge had adopted a fair and proper elaboration of the factual matrix, and that his reasoning was unimpeachable and entirely consistent with the principles.
The claimants also submitted that, if the parties had truly intended to transfer the rights in the songs, the March 1992 agreement would have said so. Although Kitchin LJ agreed that it would have been natural for the songs to be included in one of the categories (Schedule 8A or 8B) where CMI’s warranties were limited or excluded, he thought that the fact that they were not could be explained as a result of the parties’ assumption that the songs were already in all likelihood in the hands of the Marley estate. At the relevant time, the estate was registered as the owner of the copyrights in the songs, and the New York action had been dismissed some years earlier. There was a possibility that the misattribution ploy might be the subject of further litigation, but the likelihood was low.
Accordingly, Kitchin LJ concluded that the songs were clearly Compositions within the meaning of the March 1992 agreement because they fell within the scope of clause 1.8. The other provisions of the agreement, whether considered individually or collectively, could not displace the express wording of clause 1.8. It followed that the rights in the songs were transferred by CMI to Island under the terms of the agreement and so could not be owned by BSI.
Like the High Court decision, this Court of Appeal decision is unsurprising on the facts of the case, despite the various new arguments introduced by the claimants on appeal. The words used in clause 1.8 were clear. Attempting to displace their meaning by reference to other clauses within the agreement – even if, as Kitchin LJ noted, the agreement was rather “scrappy” – would involve bending the wording in a way that a reasonable reader would not do, not to mention ignoring the relevant factual matrix in place in 1992.
Tom Iverson, Associate, Michael Simkins LLP
Article written for Entertainment Law Review.