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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> R Griggs Group Ltd & Ors v Evans & Ors  EWCA Civ 11 (25 January 2005)
Cite as:  EWCA Civ 11
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
Mr Peter Prescott QC
HC 02 C02112
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE JACOB
MR JUSTICE LLOYD
| R Griggs Group Ltd
R Griggs & Co Ltd
|- and -
Raben Footwear Pty Ltd
Ronny Leopold Lewy
Smith Bernal Wordwave Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Mr G Hobbs QC and Mr R Onslow (instructed by Collyer-Bristow) for the Appellants
Crown Copyright ©
Lord Justice Jacob:
"H3. The claimants were members of a group of companies which included the manufacturer of the famous "Doc Martens" footwear. This footwear was, until 1988, sold under two trade marks. The first was the "Dr Martens" mark which was in stylised form and was used by the claimants under licence and the second was the claimants' "airWair" mark which was also in stylised form. In 1988, the claimants decided to combine the two marks to form a combined logo.
H4. The claimants commissioned an advertising agency to produce the combined logo for them and paid for the commission. The drawing for the combined logo was in fact done by the first defendant who, at that time, was working for the advertising agency on a freelance basis. The terms on which he worked for the agency were that he was to be paid a standard rate of £15 per hour, it being recognised that on occasions some work might need to be charged at a higher rate and some at a lower rate.
H5. A dispute arose between the claimants and the second defendant which was an Australian footwear company with a number of retail outlets in Australia. The third and fourth defendants were directors of the second defendant. The second defendant asserted to the claimants that the first defendant was the first owner of the copyright in the combined logo and that it had acquired that copyright by virtue of an assignment made in May 2002 from the first defendant. The first defendant contended that he had been employed merely to create some point of sale material for the claimant and that had he known that he was being instructed to produce a logo for all kinds of use all over the world he would have charged more than his standard rate. Thus, he said, all the claimants were entitled to was a licence, perhaps even an exclusive licence, to reproduce the logo for point of sale material in the United Kingdom but that in all other respects the copyright in the logo was his alone to do as he wished."
The facts in more detail
"44. I also find as a fact that the following letter accurately summarises the terms of payment upon which Mr Evans was accustomed to do work for Irwin Jordan Limited at the relevant time. It was written on 14 July 1987, which is around the time they started trading, and about a year before he drew the combined logo.
In response to our recent discussions, I am pleased to confirm that we would be happy to commission creative work from you. As agreed, this would be paid for at a standard rate of £15 per hour.
I am sure we both realise that some work may need to be charged at less than this rate, whilst other operations can equally charged at somewhat more.'"
"46 … there survives an order from Irwin Jordan Limited to him dated 24 August 1988 and an invoice from Mr Evans to Irwin Jordan Limited in response thereto. The order, insofar as is material, refers to "Visuals for Griggs UK point of sale material". It is common ground that this order covered, not only the drawing of the combination logo itself, but several other drawings for what were point of sale material e.g. swing tickets. The invoice, insofar as is material, refers to: "Griggs. Updated UK point of sale material designs including: client briefing, headline writing, logo 'combination' designs, highly finished visuals for client presentation."
"47 …. this was not regarded by the parties as a document about copyright, for to copyright neither Griggs nor Mr Evans gave any thought. It was just an identification of the work Mr Evans was being asked to do. As regards entitlement to copyright its value is evidentiary, not prescriptive."
"(1) the Contractor is entitled to retain the copyright in default of some express or implied term to the contrary effect;
(2) the contract itself may expressly provide as to who shall be entitled to the copyright in work produced pursuant to the contract. Thus under a standard form Royal Institute of British Architects ("RIBA") contract between an architect and his client, there is an express provision that the copyright shall remain vested in the architect;
(3) the mere fact that the Contractor has been commissioned is insufficient to entitle the Client to the copyright. Where Parliament intended the act of commissioning alone to vest copyright in the Client e.g. in case of unregistered design rights and registered designs, the legislation expressly so provides (see Section 215 of the 1988 Act and Section 1(a) of the Registered Designs Act 1949 as amended by the 1988 Act). In all other cases the Client has to establish the entitlement under some express or implied term of the contract;
(4) the law governing the implication of terms in a contract has been firmly established (if not earlier) by the decision of the House of Lords in Liverpool City Council v. Irwin  AC 239 ("Liverpool"). In the words of Lord Bingham MR in Philips Electronique v. BSB  EMLR 472 ("Philips") at 481, the essence of much learning on implied terms is distilled in the speech of Lord Simon of Glaisdale on behalf of the majority of the Judicial Committee of the Privy Council in BP Refinery (Westernport) Pty Ltd v. The President, Councillors and Ratepayers of the Shire of Hastings (1978) 52 ALJR 20 at 26:
"Their Lordships do not think it necessary to review exhaustively the authorities on the implication of a term in a contract which the parties have not thought fit to express. In their view, for a term to be implied, the following conditions (which may overlap) must be satisfied: (1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that 'it goes without saying'; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract."
Lord Bingham added an explanation and warning:
"The courts' usual role in contractual interpretation is, by resolving ambiguities or reconciling apparent inconsistencies, to attribute the true meaning to the language in which the parties themselves have expressed their contract. The implication of contract terms involves a different and altogether more ambitious undertaking: the interpolation of terms to deal with matters for which, ex hypothesi, the parties themselves have made no provision. It is because the implication of terms is so potentially intrusive that the law imposes strict constraints on the exercise of this extraordinary power.
The question of whether a term should be implied, and if so what, almost inevitably arises after a crisis has been reached in the performance of the contract. So the court comes to the task of implication with the benefit of hindsight, and it is tempting for the court then to fashion a term which will reflect the merits of the situation as they then appear. Tempting, but wrong."
(5) where (as in the present case) it is necessary to imply the grant of some right to fill a lacuna in the contract and the question arises how this lacuna is to be filled, guidance is again to be found in Liverpool. The principle is clearly stated that in deciding which of various alternatives should constitute the contents of the term to be implied, the choice must be that which does not exceed what is necessary in the circumstances (see Lord Wilberforce at p.245 F-G). In short a minimalist approach is called for. An implication may only be made if this is necessary, and then only of what is necessary and no more;
(6) accordingly if it is necessary to imply some grant of rights in respect of a copyright work, and the need could be satisfied by the grant of a licence or an assignment of the copyright, the implication will be of the grant of a licence only;
(7) circumstances may exist when the necessity for an assignment of copyright may be established. As Mr Howe has submitted, these circumstances are, however, only likely to arise if the Client needs in addition to the right to use the copyright works the right to exclude the Contractor from using the work and the ability to enforce the copyright against third parties. Examples of when this situation may arise include: (a) where the purpose in commissioning the work is for the Client to multiply and sell copies on the market for which the work was created free from the sale of copies in competition with the Client by the Contractor or third parties; (b) where the Contractor creates a work which is derivative from a pre-existing work of the Client, e.g. when a draughtsman is engaged to turn designs of an article in sketch form by the Client into formal manufacturing drawings, and the draughtsman could not use the drawings himself without infringing the underlying rights of the Client; (c) where the Contractor is engaged as part of a team with employees of the Client to produce a composite or joint work and he is unable, or cannot have been intended to be able, to exploit for his own benefit the joint work or indeed any distinct contribution of his own created in the course of his engagement: see Nichols Advanced Vehicle Systems Inc v. Rees  RPC 127 at 139 and consider Sofia Bogrich v. Shape Machines unreported, 4th November 1994 and in particular page 15 of the transcript of the judgment of Aldous J. In each case it is necessary to consider the price paid, the impact on the Contractor of assignment of copyright and whether it can sensibly have been intended that the Contractor should retain any copyright as a separate item of property;
(8) if necessity requires only the grant of a licence, the ambit of the licence must be the minimum which is required to secure to the Client the entitlement which the parties to the contract must have intended to confer upon him. The amount of the purchase price which the Client under the contract has obliged himself to pay may be relevant to the ambit of the licence. Thus in Stovin-Bradford v. Volpoint Properties Ltd  1 Ch 1007, where the Client agreed to pay only a nominal fee to his architect for the preparation of plans, he was held to have a licence to use the plans for no purpose beyond the anticipated application for planning permission. By contrast in Blair v. Osborne & Tompkins  21 QB 78, where the client was charged the full RIBA scale fee, his licence was held to extend to using the plans for the building itself. Guidance as to the approach to be adopted is provided in a passage in the judgment of Jacobs J. in Beck v. Montana Construction Pty [1964-5] NSWR 229 at 235 cited with approval by Widgery LJ in Blair v. Osborne & Tompkins supra at p.87:
"it seems to me that the principle involved is this; that the engagement for reward of a person to produce material of a nature which is capable of being the subject of copyright implies a permission, or consent, or licence in the person giving the engagement to use the material in the manner and for the purpose in which and for which it was contemplated between the parties that it would be used at the time of the engagement."
(9) the licence accordingly is to be limited to what is in the joint contemplation of the parties at the date of the contract, and does not extend to enable the Client to take advantage of a new unexpected profitable opportunity (consider Meikle v. Maufe  3 All ER 144)."
"36. It seems to me that when a free-lance designer is commissioned to create a logo for a client, the designer will have an uphill task if he wishes to contend that he is free to assign the copyright to a competitor. This is because, in order to give business efficacy to the contract, it will rarely be enough to imply a term that the client shall enjoy a mere licence to use the logo, and nothing more. In most cases it will be obvious, it will "go without saying", that the client will need further rights. He will surely need some right to prevent others from reproducing the logo.
37. Indeed it seems to me that, in the ordinary way, a logo is a paradigm case falling within principle (7) in Lightman J's formulation."
"The copyright in all artwork copy story-boards and films or televised commercials and other creative works created or commissioned by the Agency will rest in the Agency. If such material is to be published or developed by the client the Agency reserves the specific right to charge an appropriate fee in respect of copyright assignment and or loss of remuneration"
Mr Justice Lloyd:
Lord Justice Chadwick:
1. Appeal dismissed
2. Appellants to pay the Respondents' costs of the appeal. Such costs to be subject to a detailed assessment if not agreed.
3. Appellants to pay the Respondents within 28 days of the date of this order the sum of £15,000 on account in relation to costs due in this appeal.