B4U Network (Europe) Ltd v Performing Right Society Ltd

A present assignment of future copyright may take effect in equity when the work comes into existence. Under the Copyright, Designs and Patents Act 1988, section 91 may then vest legal and equitable title in the assignee if the statutory priority condition is met. The scope of the assignment is determined when the agreement is made. Words assigning rights which the composer may acquire or own cover future rights capable of being owned at that date. They do not depend on the composer actually becoming owner when the work is created. A later commissioning agreement therefore takes subject to the earlier assignment.

Music composers entered into agreements with the Performing Right Society in 2004, assigning rights which belonged to them or which they might acquire or own. In 2008 they were commissioned by Dharma Productions to create music for a film, on terms that the producer would own the copyright. B4U later acquired broadcasting rights in one song and broadcast it. The PRS claimed infringement.

Vos J gave the PRS summary judgment under Part 24 of the Civil Procedure Rules 1998, holding that B4U had no real prospect of successfully defending the claim: [2012] EWHC 3010 (Ch). The appeal concerned whether the future copyright fell within the earlier PRS assignment and whether section 91 operated where the commissioning agreement purported to vest copyright in the producer.

The appeal was dismissed unanimously.

1. Statutory and equitable framework. A present assignment of future property takes effect in equity when the property comes into existence. It creates a proprietary right independent of the contractual obligation to execute a further assignment. The Court relied on Performing Right Society Ltd v London Theatre of Varieties Ltd [1924] AC 1, In Re Lind (Industrials Finance Syndicate Ltd v Lind) [1915] 2 Ch 345 and Peer International Corporation v Thermidor Music Publishers [2004] Ch 212.
2. Section 91 of the Copyright, Designs and Patents Act 1988 permits a written and signed agreement relating to future copyright to vest legal and equitable title in the assignee when the copyright comes into existence, provided that the assignee is entitled against all other persons. The section reflects the equitable rule that the first attached equity has priority. The copyright does not need to pass through the assignor.
3. Construction of clause 2(a). The relevant category of future rights had to be identified at the date of the PRS agreement. The words assigning rights which the composers might acquire or own referred to rights capable of being owned by them, and did not require proof that they ultimately became owners when the song was created. Kitchin LJ applied the contractual approach stated in Rainy Sky SA v Kookmin Bank [2011] UKSC 50, [2011] 1 WLR 2900. The commercial context did not justify a different construction, particularly since there was no sufficient evidence of practical difficulty and the PRS agreement did not permit assignment of rights in selected works only.
4. Application. The copyright in Shukran Allah fell within the earlier PRS assignment. Even accepting that section 91 vested title immediately in the first assignee without an intervening period of ownership by the composers, it vested the copyright in the PRS. The later commissioning agreement with Dharma could not defeat that priority. Underhill LJ agreed with both judgments.

• Court of Appeal (Civil Division): Dismissed B4U’s appeal: [2013] EWCA Civ 1236.
• High Court of Justice, Chancery Division (Intellectual Property): Vos J granted summary judgment under Part 24 of the Civil Procedure Rules 1998 in favour of the PRS, holding that B4U had no real prospect of successfully defending the infringement claim: [2012] EWHC 3010 (Ch).