The possible perils of making use of photographs found on the internet are ably illustrated by the recent case of Jason Sheldon v Daybrook House Promotions Limited  EWPCC 26 in which the Patents County Court (which has been renamed and reconstituted as the Intellectual Property Enterprise Court from 1 October 2013) gave judgment on a preliminary issue as to the appropriate measure of damages in a case of copyright infringement in a celebrity photograph.
MH Dispute Resolution
Friday 4th October, 2013
The Claimant, Mr Sheldon, works as a professional photographer. The Defendant, Daybrook House Promotions Limited, runs a nightclub in Nottingham called Rock City. In July 2011 the American pop star Ke$ha was touring the UK with the dance music duo LMFAO as her special guests. When the tour came to Birmingham the Claimant secured exclusive backstage access to Ke$ha’s tour bus and took some photos. One photo depicted Ke$ha and LMFAO lounging on a sofa on the tour bus with Ke$ha holding a bottle of champagne.
In March 2012 the Claimant discovered that the Defendant was using the image in connection with a poster campaign for its ‘Floor Fillers’ events at Rock City. The Claimant asked the Defendant to stop making use of the image and sent an invoice in the sum of £1,351 for its use (based on the Claimant’s understanding on the extent of its use at the time). The sending of an invoice reflected the fact that the Claimant’s business involved the licensing of the use of his photographs.
The Defendant accepted that it had used the photograph but submitted that it did not appreciate that this was an image which it was not entitled to use. The Defendant stated that the photograph was freely available on tumblr. and this had led to a genuinely held mistaken belief that this meant that the photograph had been posted to the site to be freely used. The Defendant took the view that, if in fact a fee was payable, the proper fee to be paid for use of the photograph would be a few hundred pounds and that they would not have paid any more.
The root of the difficulty was the very different view that the parties took as to what would be a reasonable licence fee for use of the image. The Judge said that assuming the use of the image was an infringement of copyright then the correct measure of damages, where the Claimant had a business as a licensor of copyright in such images, was 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. It was not what the Defendant would have been prepared to pay for use of a photograph but what the copyright owner would have earned for its reproduction.
It was held that the photograph was of very well known and current acts which would tend to increase the value of the photograph. A more important factor was the exclusivity of the Claimant’s access as it facilitated the back stage party atmosphere in the photograph which also enhanced its value. The Court therefore held that the correct measure of damages was £5,862.37 plus VAT and interest which was based on a revised calculation by the Claimant after the full extent of the photograph’s use became clear.
This champagne fuelled photograph is therefore a sober reminder that images found online should only be used after having obtained the appropriate consent from the rights holder or a party could end up paying far more than they would wish for its usage.
The recent case of Euromark Limited v Smash Enterprises Pty Ltd  EWHC 1627 (QB) once again shows the importance of ensuring that the terms of an agreement accurately reflect the intentions and wishes of the parties as, once the agreement is entered into, the parties will be bound by its terms. This case concerned a clause in an agreement that provided that the agreement would be governed by Australian law and that the parties submitted to the exclusive jurisdiction of the courts of Australia.
In a written agreement, the Defendant engaged the Claimant to distribute the Defendant’s products (children’s lunchboxes and similar items) for a three year term. After around one year the Defendant purported to terminate the agreement on the basis that it was commercially convenient for it to do so. There had not been any alleged default on the part of the Claimant. The Defendant then dealt directly with the Claimant’s customers which included Tesco and Sainsbury’s. The Claimant alleged that the Defendant had wrongly repudiated the contract. The Defendant alleged that the Claimant had affirmed the contract after the Defendant’s purported termination and that it was the Claimant that had subsequently repudiated the contract.
The Claimant brought proceedings in England and obtained permission to serve these proceedings on the Defendant in Australia. The Defendant applied for a declaration under Civil Procedure Rule 11(1) that the Court did not have jurisdiction to hear the Claimant’s claim. The Claimant argued that it should be permitted to continue proceedings in England due to the strength of the merits of its claim.
The Court cited the case of Donohue v Armco Inc  as the correct starting point which provides that where “contracting parties agree to give a particular court exclusive jurisdiction to rule on claims between those parties, and a claim falling within the scope of the Agreement is made in proceedings in a forum other than that which the parties have agreed, the English Court will ordinarily exercise its discretion to secure compliance with the contractual bargain, unless the party suing in the non-contractual forum can show strong reasons for suing in that forum”. The approach therefore is that the Court will endeavour to make contracting parties abide by their contracts.
The Court, citing Antec International Limited v Biosafety USA Inc , stated that ‘strong reasons’ do not include factors of convenience that were foreseeable at the time the contract was entered into. In essence, the party seeking to invoke the jurisdiction of the English Court in the face of an exclusive jurisdiction clause, which provides for disputes to be determined in a foreign court, must point to a factor which could not have been foreseen when the contract was made. This was not such a case.
A further consideration for the Court was whether it would be in the interests of justice to not give effect to an exclusive jurisdiction clause, which was an argument propounded by the Claimant on the basis that the merits of its claim were so strong. The Court did not agree with the Claimant and stated that this was an incorrect reading of the expression. The expression ‘interests of justice’ was instead designed to deal with those rare cases where, although there is an exclusive jurisdiction clause, the courts to which such a jurisdiction has been given may not afford a fair trial, or may, in some other way, be potentially unreliable or unjust.
The Court concluded that even if the Claimant were likely to win on liability at trial, the issue still remained as to where the trial should take place. There was no basis in law for concluding that a strong case should be heard in England, whilst a more arguable case should be heard in Australia. On balance there was no real advantage, either way, in the litigation being heard in London or in Australia. As such the parties had agreed that disputes would be heard in Australia and there were no strong reasons to justify a different conclusion.
It is therefore clear that parties should expect to be bound by agreed contractual terms and that, barring strong reasons to the contrary of the type described above, a forum specified in an exclusive jurisdiction clause will not be upset by English courts. It is of great importance that jurisdiction clauses are properly considered at the outset as pursuing litigation in a foreign jurisdiction may prove a costly and demanding endeavour.