Twentieth Century Fox Film Corp & Ors v Harris & Ors

A copyright owner has no proprietary claim to money generated by infringement of the copyright. The proceeds of infringement are not equivalent to stolen property: the copyright owner retains title to the copyright throughout. Nor does the analogy with trespass support a proprietary claim to the proceeds of the wrong. The statutory availability of damages, injunctions, accounts and other relief under section 96(2) of the Copyright, Designs and Patents Act 1988 does not establish such a proprietary remedy. Authorities concerning copyright itself being held on constructive trust, particularly in cases involving breaches of confidence or fiduciary duty, do not establish a trust over the fruits of infringement. Proprietary injunctions will therefore be unavailable where the asserted proprietary right depends solely on such a claim.

The Studios, owners or exclusive licensees of copyright in films and television programmes, brought proceedings against individuals and companies allegedly connected with the Newzbin2 website. They sought proprietary injunctions over assets said to represent payments derived from copyright infringement, having already obtained freezing injunctions.

The application depended on whether there was a serious question to be tried that copyright owners have proprietary rights in the proceeds of infringement. The court considered statutory remedies, constructive-trust authorities, analogies with theft and trespass, and cases concerning copyright created or used in breach of confidence or fiduciary duty.

1. Application refused. The Studios did not establish a serious question to be tried as to any proprietary right in the assets. Proprietary injunctions were therefore not granted.
2. Section 96(2) of the Copyright, Designs and Patents Act 1988 makes available relief by damages, injunctions, accounts or otherwise as is available for infringement of another property right. The words “or otherwise” are capable of encompassing proprietary relief, but the section does not itself establish a proprietary claim to infringement proceeds.
3. A copyright may itself be held on constructive trust, but that is materially different from the proposition that money generated by infringement is held on trust for the copyright owner. The reasoning concerning stolen money in Westdeutsche Landesbank Girozentrale v Islington LBC [1996] AC 669 did not assist: a copyright owner retains title to the copyright, whereas the owner of stolen coins has lost title at law.
4. The more appropriate analogy was trespass. Authorities concerning profits or restitutionary damages for trespass did not support a proprietary claim to the proceeds. There was no evident reason why a copyright owner should be better placed than a landowner whose land had been used in a profitable trespass.
5. The cases concerning Spycatcher, including Attorney-General v Guardian Newspapers Ltd (No. 2) [1990] 1 AC 109, and Attorney-General v Blake [1997] Ch 84, involved alleged breaches of confidence, fidelity or other duties and concerned whether copyright itself was held on trust. Their observations were obiter and did not determine the present issue.
6. The statutory history reinforced the conclusion. Section 18 of the Copyright Act 1956 had created a statutory fiction allowing recovery based on the whole value of infringing articles. That provision was repealed because it was regarded as anomalous and unacceptable. A proprietary claim to gross infringement proceeds would produce a similar result.