IL-2023-000007 - [2025] EWHC 2863 (Ch)

THE LICENSING ISSUE

A key issue in connection with the Secondary Infringement of Copyright Claim is whether the licensed Copyright Works relied on by Getty Images in these proceedings are subject to an exclusive licence within the meaning of section 92 CDPA in relation to which the First Claimant (or Second or Fifth Claimant) is the licensee. If those Copyright Works are subject to an exclusive licence, then Getty Images has concurrent rights with the copyright owners and is jointly entitled to a remedy for copyright infringement pursuant to sections 101 and 102 CDPA. If the licences are not exclusive, Getty Images lacks standing to bring a claim for copyright infringement in relation to those works. Issues 5 and 6 of the Agreed List of Issues address the outstanding matters for determination by the court.

I have already addressed the procedural orders that were made with a view to facilitating the determination of the Licensing Issues. Fourteen Sample Licences have been identified with a view to determining the issues arising in respect of the licences identified in Annex 3A to the Particulars of Claim. Fortunately, the arguments on these licences may be distilled to a relatively small number of points, each based on identical or similar wording from licence to licence. A number of the Annex 3A licences are also relied upon to give Getty Images standing to bring claims in relation to SOCI Works A14, A15 and A16. By the time of closing submissions I understood it to be common ground that a finding on the Annex 3A licences can be read across to these SOCI Works.

I have already explained earlier in this judgment that Content is acquired by Getty Images in different ways, one of which involves Getty Images entering into licence agreements with third party photographers and copyright owners or “contributors”. Ms Cameron’s evidence, which I accept, is that this often involves photographers, as prospective contributors, submitting a sample of content via the Getty Images Websites and, following a review by the Getty Images’ Inspection Team, being offered either an iStock Artists Supply Agreement (“iStock ASA”) or a Unified Contributor Agreement (which I have already referred to as a Contributor Agreement). These are template agreements which have been updated and varied over time and which govern the terms on which the Content is licensed to Getty Images.

It is common ground that the terms of the Contributor Agreement and the iStock ASA are retrospective and cover all content previously submitted. Therefore, where a Contributor enters into a new version of either agreement, that version will supersede and cancel any previous agreement.

There is nothing between the parties as to the legal principles relevant in English law to the identification of an exclusive licence.

Section 92 of the CDPA defines an “exclusive licence” as follows:

“Exclusive licences.

(1)

In this Part an “exclusive licence” means a licence in writing signed by or on behalf of the copyright owner authorising the licensee to the exclusion of all other persons, including the person granting the licence, to exercise a right which would otherwise be exercisable exclusively by the copyright owner.

(2)

The licensee under an exclusive licence has the same rights against a successor in title who is bound by the licence as he has against the person granting the licence.”

Section 101 of the CDPA provides as follows:

“Rights and remedies of exclusive licensee.

(1)

An exclusive licensee has, except against the copyright owner, the same rights and remedies in respect of matters occurring after the grant of the licence as if the licence had been an assignment.

(2)

His rights and remedies are concurrent with those of the copyright owner; and references in the relevant provisions of this Part to the copyright owner shall be construed accordingly.

(3)

In an action brought by an exclusive licensee by virtue of this section a defendant may avail himself of any defence which would have been available to him if the action had been brought by the copyright owner.”

The essential requirements under s 92(1) are twofold: the licence is to be written and signed by the copyright owner and/or by someone on their behalf; and the licence is “to the exclusion of all other persons” including the copyright owner. The effect of sections 92(1) and 101 of the CDPA is that the exclusive licensee has all the rights of a copyright owner (i.e. as if there had been an assignment) and the copyright owner is left only with the right to sue other persons for infringement.

The relevant legal principles relating to exclusive licences were summarised in Oxford Nanopore Technologies Ltd v Pacific Biosciences of California Inc [2017] EWHC 3190 (Pat), [2018] Bus LR 353 by Mr David Stone sitting as a deputy High Court Judge at [44]. This was a patents case concerning the similarly worded definition of exclusive licence in the Patents Act 1977 sections 67 and 130(1). The parties are agreed that Mr Stone’s findings in [44] (set out below with reference to other authorities removed and with the wording tweaked to apply to a copyright case) are applicable to copyright law:

“(i)

Whether or not a licence is an exclusive licence [under the relevant statute] is a matter for English law…;

(ii)

A licence which purports to be an exclusive licence may not necessarily be so. Identifying an exclusive licence depends on a proper construction of the document or documents...An exclusive licence will be expressly so: circumstances in which an exclusive licence will be implied will be rare, if they exist at all;

(iii)

It is for the party asserting that it is an exclusive licensee to demonstrate that it is...;

(iv)

The assessment of whether or not a licence is exclusive is not a “once and for all assessment”…An exclusive licence may confer a power to convert the licence into a non-exclusive licence…;

(v)

The “essential element” of an exclusive licence is that it is a licence to the exclusion of all other persons, including [the copyright owner]…;

(vi)

It is possible to have a plurality of exclusive licences in respect of any one [copyright]...;

(vii)

But each exclusive licence may only be granted to one person – a licence will not be exclusive if granted to a number of entities, even if they are under the same control…;

(viii)

An exclusive licensee may grant sub-licences to “persons authorised by him”…;

(ix)

There is a distinction to be drawn between a licence and an equitable right to call for a licence…;

(x)

Where an equitable right to call for a licence is conditional… the otherwise exclusive licence will remain exclusive unless and until the contractual conditions are fulfilled that enable the grant of the licence…”.

Stability highlights point (v) which reflects a decision in Dendron GmbH v University of California (No. 3) [2004] EWHC 1163 (Ch) [2004] FSR 43 (“Dendron”), per Pumfrey J at [11]. Dendron was applied by Henry Carr J in Illumina Inc v Premaitha Health Plc [2017] EWHC 2930 (Pat). In the latter case the relevant licence purported to grant exclusive licence rights to a group of companies (as opposed to a single company). The learned Judge held (at [254]) that accordingly it was not an exclusive licence as “it is a licence granted by the proprietor to a number of persons, even though one of them is in de facto control of the others”.

Both parties emphasised that there may be a plurality of exclusive licences whose effect is to sub-divide the intellectual property right into separate exclusive domains, each relating to different rights, including different means of exploitation (see Spring Form Inc v Toy Brokers Ltd [2002] FSR 17 per Pumfrey J at [20] and Copinger at [4-247(2)] and [4-105]: “The divisions which a copyright owner may desire to make will be into different modes of exploitation, different periods of time and different territories.”

Where a licence agreement is governed by foreign law, the interpretation and construction of that agreement will be subject to its governing law. However, as is common ground, once any disputed issues of interpretation are resolved, the question of whether the licence is an “exclusive licence” is a question of English law applying sections 92 and 101(1) CDPA to the terms of the licence as the court has construed them. As Pumfrey J observed in Dendron at [9]:

“identifying an exclusive licence depends entirely upon a proper construction of the document or documents by which [the exclusive licensee] claims to be exclusive licensee”.

Two of the sample licences (both iStock ASAs, namely #33 and #36) are governed by the laws of Alberta, Canada. Getty Images’ pleaded case (with which Stability agrees) is that the law of Alberta should be presumed to be the same as English law. The remaining sample licences (#2, #3, #8, #10, #11, #13, #17, #19 #30, #32, #37 and #38) are governed by the laws of the State of New York. I shall return to the principles to be applied to these latter agreements in a moment.

The principles of construction under English law are well known and I did not detect any disagreement between the parties as to the correct approach. Getty Images drew my attention to the court’s summary of the relevant principles in EE Ltd v Virgin Mobile Telecoms Ltd [2023] EWHC 1989 (TCC) at [25]-[26]:

“25.

i) The court construes the relevant words of a contract in their documentary, factual and commercial context, assessed in the light of (i) the natural and ordinary meaning of the provision being construed, (ii) any other relevant provisions of the contract being construed, (iii) the overall purpose of the provision being construed and the contract or order in which it is contained, (iv) the facts and circumstances known or assumed by the parties at the time that the document was executed, and (v) commercial common sense, but (vi) disregarding subjective evidence of any party’s intentions – see Arnold v Britton [2015] UKSC 36, [2016] 1 All ER 1, [2015] AC 1619 per Lord Neuberger PSC at paragraph 15 and the earlier cases he refers to in that paragraph;

ii)

A court can only consider facts or circumstances known or reasonably available to both parties that existed at the time that the contract or order was made – see Arnold v. Britton (ibid.) per Lord Neuberger PSC at paragraph 20;

iii)

In arriving at the true meaning and effect of a contract or order, the departure point in most cases will be the language used by the parties because (a) the parties have control over the language they use in a contract or consent order and (b) the parties must have been specifically focussing on the issue covered by the disputed clause or clauses when agreeing the wording of that provision – see Arnold v. Britton (ibid.) per Lord Neuberger PSC at paragraph 17;

iv)

Where the parties have used unambiguous language, the court must apply it – see Rainy Sky SA v Kookmin Bank [2011] UKSC 50, [2012] 1 All ER (Comm) 1, [2012] 1 Lloyd’s Rep 34 per Lord Clarke JSC at paragraph 23;

v)

Where the language used by the parties is unclear the court can properly depart from its natural meaning where the context suggests that an alternative meaning more accurately reflects what a reasonable person with the parties’ actual and presumed knowledge would conclude the parties had meant by the language they used but that does not justify the court searching for drafting infelicities in order to facilitate a departure from the natural meaning of the language used – see Arnold v. Britton (ibid.) per Lord Neuberger PSC at paragraph 18;

vi)

If there are two possible constructions, the court is entitled to prefer the construction which is consistent with business common sense and to reject the other – see Rainy Sky SA v. Kookmin Bank (ibid.) per Lord Clarke JSC at paragraph 2 – but commercial common sense is relevant only to the extent of how matters would have been perceived by reasonable people in the position of the parties, as at the date that the contract was made – see Arnold v. Britton (ibid.) per Lord Neuberger PSC at paragraph 19;

vii)

In striking a balance between the indications given by the language and those arising contextually, the court must consider the quality of drafting of the clause and the agreement in which it appears – see Wood v Capita Insurance Services Ltd [2017] UKSC 24, [2018] 1 All ER (Comm) 51, [2017] AC 1173 per Lord Hodge JSC at paragraph 11. Sophisticated, complex agreements drafted by skilled professionals are likely to be interpreted principally by textual analysis unless a provision lacks clarity or is apparently illogical or incoherent– see Wood v Capita Insurance Services Ltd (ibid.) per Lord Hodge JSC at paragraph 13; and

viii)

A court should not reject the natural meaning of a provision as correct simply because it appears to be a very imprudent term for one of the parties to have agreed, even ignoring the benefit of wisdom of hindsight, because it is not the function of a court when interpreting an agreement to relieve a party from a bad bargain – see Arnold v. Britton (ibid.) per Lord Neuberger PSC at paragraph 20 and Wood v. Capita Insurance Services Limited (ibid.) per Lord Hodge JSC at paragraph 11”.

26.

At [23] Sir Geoffrey Vos repeated the words of Lord Hodge in Wood v Capita Insurance Services Ltd [2017] UKSC 24 (at [12]), to the effect that the process of interpretation required is “a unitary exercise” (an observation also adopted by Lord Hamblen in Sara & Hossein Holdings at [29]), observing that:

“it starts with the words and the relevant context, and moves to an iterative process checking each suggested interpretation against the provisions of the contract and its commercial consequences. The court must consider the contract as a whole and give more or less weight to elements of the wider context in reaching its view as to its objective meaning”.”

I am extremely grateful to the parties for cooperating over the preparation of the Agreed Propositions of New York Law. I set these out below at paragraphs 666-675.