In robin Ray V Classic Fm, the English High Court held that a contractor providing services owns the intellectual property of the materials created for the client. The decision is a useful guide for contractors, as it is one of the main cases in determining whether an intellectual property commissioner may use intellectual property for purposes not expressly provided for in a written agreement.

Bottom

Mr. Ray was a highly respected classical music expert in England, reputed to have an encyclopedic knowledge of classical music. He was hired by Classic FM in the UK in 1991 to compile the radio station’s repertoire, compile playlists, categorize tracks for playlists and rate his popularity in each of the categories. The contract did not deal with intellectual property rights. The consulting agreement was originally for 11 months, however, Mr. Ray’s work proved beneficial to Classic FM and his services were extended until 1997. Eventually some 50,000 tracks were classified. The results of the work were incorporated into a database that was used to select music on a rotational basis and prevent excessive playback.

The project was a success. After approximately 5 years of internal use, Classic FM proposed to license the database to foreign companies. Mr Ray objected and brought proceedings to prevent Classic FM from licensing the use outside the UK without his permission, on the grounds that he was the author of the documents entered into the database.

The decision of the High Court

Judge Lightman in the Superior Court ruled that in the case of a consultancy, the author retained the copyright in the absence of an express or implied term to the contrary. When a consultant’s services are performed for an express purpose, a court will easily imply a clause in a service contract that a client is entitled to use for that purpose. In this case, Classic FM always intended to use Mr Ray’s work in the UK. It wasn’t until 1996 that Classic FM intended to exploit Mr. Ray’s work abroad. The court was not prepared to imply a license in the contract that Classic FM would have the right to exploit its work abroad. Classic FM was prevented from exploiting its database abroad without Mr. Ray’s consent, which would require the payment of license fees.

By implementing licenses in this way, a court will only go as far as is necessary in the circumstances to give effect to the intent of the parties. If the grant of a license is required, the scope of the license will be the minimum required to give effect to the intention of the parties at the time of the contract. An implied term that copyright would be assigned to a client will be exceptionally rare, since more often than not an exclusive license will have the same effect in law.

The judge held that the contractor retains the copyright in the absence of any express or implied term to the contrary. The contract may expressly state which party is entitled to the copyright, and the mere fact that the contractor has been commissioned – performed by a contractor – is insufficient to grant copyright rights to the customer. In the absence of express rights, the customer may establish a right under the express or implied term of the contract.

conclusion

The decision means that the contractors retain the copyright in the absence of an express or implied term. An implied license must be reasonable and equitable; necessary to give commercial effectiveness to the contract, susceptible of clear expression and not contrary to any express term of the contract, and so evident that it is evident. Ownership of intellectual property rights and licenses to use the rights should not be left to chance; it is preferable to unwanted implied licenses that allow a client to use a work and, rather, provide the stated purposes for which it can be used at the outset of the contract. Therefore, it is important to document the purposes of the engagement and the intended use for the copyrighted work created during the course of the engagement.