Four Tet – when taking a break from making mesmerising electronic music – had to recently ask the question: “What are the costs involved in IP litigation?”
He was involved in a dispute with his former record label, Domino Recordings, concerning royalties owed for music downloaded or streamed online, which has now settled.
Four Tet (aka Kieran Hebden) had signed an exclusive recording agreement with Domino in 2001, which was before the online streaming revolution. He was entitled to a royalty payment of 50% where his music was licensed (i.e. for use in television) and 13.5% where it was sold (i.e. to customers on CD).
The central question in the dispute was whether the download or streaming of Four Tet’s music was a “sale” or a “licence” under the contract (along with other issues such as alleged copyright infringement), and so the royalties due to him for those downloads / streams.
Mr Hebden chose to litigate in the Intellectual Property and Enterprise Court (the “IPEC”), a specialist court in England and Wales that deals with intellectual property disputes of any kind (including IP disputes arising from, for example, a contractual claim).
There is a financial limit on both the damages that can be awarded to the winning party (£500,000) and the costs payable by the losing party to the other side (usually £50,000) when conducting intellectual property litigation in IPEC.
This was important because Domino, as a leading independent record label, had considerably greater financial resources than Mr Hebden to fight the IP litigation.
The cap on damages and costs in IPEC provided relative certainty to Mr Hebden on his potential financial exposure to the other side’s costs and the affordability of the dispute. In litigation outside of IPEC, it is possible that Domino could have used its ever-increasing costs, a large percentage of which Mr Hebden could have been liable for if he lost the litigation, as a tactical tool to dissuade Mr Hebden from further pursuing the litigation or to accept a less favourable settlement.
Four Tet acknowledged after the settlement was finalised, that he “was able to stand [his] ground” because “luckily the case took place in IPEC where legal costs are capped”.
Now we hope Four Tet can go back to that mesmerising music making.
Waterfront Law are specialist intellectual property litigation lawyers with a depth of experience conducting intellectual property litigation in IPEC and are able to provide cost effective representation to both individuals and businesses. Get in contact here.
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