Summary

Provided that the Copyright Tribunal discharged its statutory duty under the Copyright, Designs and Patents Act 1988 s.126 to determine the terms of a licence that were reasonable in the circumstances by having regard to comparable schemes and licences as well as all other relevant considerations, then the precise way in which it carried out its analysis and the order in which it addressed the material issues in its decision could not undermine the validity of its conclusions.

Facts

The appellant broadcaster (C) appealed against a decision ((2010) EWHC 2094 (Ch)) setting aside part of an interim decision of the Copyright Tribunal determining the royalty rate payable by C to the respondent licensor (V), for use of its music video repertoire. C, which operated television channels, had applied to the tribunal under the Copyright, Designs and Patents Act 1988 s.126 for a determination of the terms of a licence that were reasonable as between it and V in respect of its use of V's music repertoire. C's position was that the appropriate royalty rate should be eight per cent of its gross revenue, pro-rated for usage; whilst V's position was that it should be 20 per cent (also pro-rated). The tribunal diminished the window of royalty rate to a figure that fell between 10 to 15 per cent. It then went on to consider a comparable music licence which had been agreed between V and BSkyB as well as C's past, present and projected financial position. The tribunal concluded that a reasonable royalty rate should be 12.5 per cent. On appeal, the judge concluded that the tribunal had arrived at the reduced window rate without reference to the matters which it had discussed later in its decision, namely the comparable licence and C's available profits, and that it was wrong in principle for the tribunal to have relegated its consideration of the comparable licence to a question of "fine tuning" a royalty rate that had already been decided to lie in a range considerably below the rate appearing in that licence. C submitted that the judge had failed to attribute to the tribunal awareness, in fixing the reduced window, of its subsequent discussion of comparables; and failed to appreciate that the tribunal's treatment of the relevance and weight of those comparables was coloured by its earlier discussion of the law and music video market. V contended that the tribunal's process of reasoning in arriving at the reduced window was fundamentally wrong and its decision irrational.

Held

(1) The judge's criticisms of the tribunal's arrival at the reduced window royalty rate took an unrealistic and unjustified view of the tribunal's reasoning and adopted too prescriptive a view of the way such cases fell to be decided. Before arriving at those figures, the tribunal had surveyed the music video market and effectively rejected V's case that it had secured a freely negotiated voluntary acceptance of an alleged standard licensing approach of a headline 20 per cent royalty. It also made findings of fact directly relevant to its assessment of any comparables. It was unrealistic to subject the tribunal's reasoning to a rigorous analysis which supposed, in fixing the reduced window that the tribunal overlooked the factual conclusions that it had expressly stated in subsequent parts of its decision. Moreover, it would be an unusual case to conclude that a specialist tribunal, in a lengthy, conscientious and detailed judgment, had ignored its own clear and proper statement of the correct legal approach. The tribunal's findings of fact were capable of supporting a perfectly proper conclusion about the reduced window. The law was not so prescriptive as to impose on the tribunal a particular analytical structure and methodology. Provided that a tribunal discharged its statutory duty under s.126 then the precise way in which it carried out its analysis and the order in which it addressed the material issues in its decision could not undermine the validity of its conclusions (see paras 62, 64-69, 72, 74 of judgment). (2) V's criticisms of the tribunal's approach to the reduced window royalty rate did not disclose an error of law which undermined the validity of its decision, (paras 76-77, 79, 81-83, 85-87). (3) (Obiter) There was no reason why the procedure for inviting a trial judge or tribunal to provide clarification and further reasons should not be adapted to appeals from the tribunal under s.152(1), English v Emery Reimbold & Strick Ltd (2002) EWCA Civ 605, (2002) 1 WLR 2409, Burns v Royal Mail Group Plc (formerly Consignia Plc) (2004) ICR 1103 EAT, Barke v Seetec Business Technology Centre Ltd (2005) EWCA Civ 578, (2005) ICR 1373 and Korashi v Abertawe Bro Morgannwg University Local Health Board (2011) EWCA Civ 187 considered (para.90).

Appeal allowed