Marshall Bruce Mathers III, better known as 'Eminem', became famous after the release of his second album in 1999. A recent case concerned his lesser known and less successful first album, entitled 'Infinite', recorded in 1996.(1)
FBT Productions LLC brought the claim for copyright infringement against Let Them Eat Vinyl (LTEV) Distribution Ltd and Plastic Head Music Distribution Ltd, alleging infringement of the copyright in Eminem's first album. The claim covered both vinyl and CD formats of the album.
His Honour Judge Hacon found that LTEV had infringed the copyright in the album by making vinyl copies of the work. However, Hacon found that neither of the defendants were liable for any of the secondary acts of infringement pleaded – namely, importing, offering for sale and selling copies of the album. Hacon accepted that the defendants had neither known nor had had reason to believe that the vinyl and CD copies of the album sold by Plastic Head were infringing copies of another party's copyright work.
LTEV made 2,891 vinyl copies, all of which were supplied to and distributed by Plastic Head. Distribution of such vinyl copies continued until 9 October 2016. Plastic Head also sold CDs obtained from a business known as Boogie Up Productions, which was based in the United States and run by David Temkin, who had advised the defendants that he had the right to license vinyl format copies of the album.
On 12 January 2017 Plastic Head withdrew from sale the CD copies of the album supplied by Boogie Up following receipt of a letter before action to LTEV from FBT. The defendants ceased to advertise and market the album.
FBT elected an inquiry into damages and claimed on three bases:
- the loss of an opportunity to license a third party to exploit the album (and various tracks therein) to celebrate its 20th anniversary;
- the losses from the licence that FBT would have offered LTEV for the exploitation of the album; and
- a reasonable royalty for the actual sales made by LTEV based on the notion of a willing licensee and licensor negotiation.
FBT's main claim was under the first head. It said that its loss was the loss of a chance to trade generally, rather than the loss of a particular chance. It did not rely on a particular third party to buy its goods but rather on the opportunity to market copies of singles and subsequently an album, generally, using a third party as the conduit for those sales.
Ian Karet (sitting as a deputy High Court judge) found that, on the facts, LTEV's infringing activities had not led to a loss of opportunity for FBT. FBT claimed that when it had discovered the LTEV copy of the album in August 2016, it had abandoned its plans for the 20th anniversary release. However, Karet said that plans for an issue of vinyl had in fact continued and, on the facts, FBT's actions had been inconsistent with those of a party that was not proceeding.
Further, applying the test set out in SDL Hair Ltd v Next Row Ltd ([2014] EWHC 2084 (IPEC)), Karet said that FBT had not shown that the tort was a cause of any loss. Therefore, the claim for damages under this head failed.
Karet also rejected FBT's second head of loss as the evidence before him was that FBT would not have offered a licence to LTEV because it had not been an attractive potential licensee.
As for the third head of loss, Karet found that damages should be calculated for a licence to make 2,981 copies of the album. He said that the notional licensor would know that the licensee had experience in the UK market of re-issues of significant artists. Further, he found that the licence would probably have been for a unit price per record. If it had been a percentage of the price to dealer, that would have been assumed so as to give a similar royalty. Given the nature and reputation of the licensor (with valid rights) and that this was a special anniversary disc, which might attract higher pricing, Karet found that the notional licensee would have been prepared to pay more than the £1.50 that had been agreed with Boogie Up and been able to set a higher price to dealer to maintain profits. The licensor would have had in mind a likely retail price for the album of about $24.
Taking all of this into account, Karet found that the hypothetical fee would be £2.50 per disc, which was equivalent to a rate of just over 32% on the price to dealer of £7.75 that LTEV had charged Plastic Head.
Karet therefore assessed damages on the basis of a £2.50 notional licence fee to make 2,981 infringing copies, which came to £7,452.50 plus interest.
Endnotes
(1) FBT Products LLC v Let Them Eat Vinyl Distribution Ltd ([2021] EWHC 932 (IPEC) (20 April 2021)).
