Jason Sheldon v Daybrook House Promotions Ltd  EWPCC 26, Patents County Court, England and Wales, 8 May 2013
Journal of Intellectual Property Law & Practice (2013) doi: 10.1093/jiplp/jpt155, first published online: September 19, 2013
His Honour Judge Birss QC has held that a fair licence fee for the use of a photograph of pop celebrities Ke$ha and LMFAO was worth substantially more than the few hundred pounds suggested by the defendant due to the subjects' celebrity status and the exclusive nature of the photograph in question.
The Enterprise and Regulatory Reform Act 2013, which includes provisions for the use of ‘orphan works’, has, of late, caused photographers to be concerned about the commercial use of photographs by third parties who might come across them on the internet with no indication as to who the author (or rather, the photographer) is. The 2013 Act provides that ‘orphan works’ can only be used if a ‘diligent search’ for the author has been made, and a fair licence fee is paid. While it remains unknown what will constitute a ‘diligent search’, this case sheds some light on the considerations which are relevant in determining a fair licence fee for unauthorized commercial use of a photograph.
The defendant, Daybrook House Promotions Ltd, ran a dance venue in Nottingham called Rock City. In March 2012, Mr Sheldon found that Daybrook was using the photograph taken in Birmingham in connection with a poster advertising campaign for its ‘Floor Fillers’ events.
As far as Mr Sheldon was concerned, the use of the photograph was unlicensed. Accordingly, he sent Daybrook an invoice for the use, totalling £1,351. This sum was based on Mr Sheldon's then understanding of the extent of the use of the photograph at that time.
Daybrook's position was that it accepted that the photograph had been used, but that it did not appreciate that it was an image which it was not entitled to use since the photograph was freely available on the tumblr social networking website. It said that, had it known that the claimant did not intend the photograph to be made so available it would not have used it. In any event, however, Daybrook argued that the claim was low and that the proper fee to be paid should be measured in the range of a few hundred pounds. In response to Mr Sheldon's invoice, Daybrook offered £150.
Mr Sheldon issued proceedings for copyright infringement for the money that he felt was owed—the root of the difficulty in this case was the very different view the parties took as to what a fair licence fee would have been for the acts complained of. This involved two issues: the extent of the use of the photograph by Daybrook and, more significantly given how far apart the parties were, what a reasonable licence fee would be for the use.
Judge Birss QC decided that the best way forward was to decide the question of quantum as soon as practicable so that the case could be allocated to the correct track, either the small claims track or the multi-track, in the Patents County Court. The question was, therefore, what damages would be awarded to Mr Sheldon, assuming, which was not admitted, that the acts committed by Daybrook were indeed acts of infringement of copyright owned by Mr Sheldon.
Judge Birss QC decided that, assuming infringement had taken place, the correct measure of damages would be a reasonable royalty, ie the licence fee which would have been agreed between a willing licensor and a willing licensee, having regard to the nature of the right and all the circumstances.
Daybrook contended that the reasonable royalty would be a few hundred pounds. It relied on a quotation of £366 from a photographer, David Baird, for a single image for a club night poster with a print run of ten (6 × 4 inches) and a run of 10,000 postcards. The price was based on the photo being used on a promotional poster for a weekly club night at Rock City with a small print run and displayed on the interior and exterior of the club, and postcard-sized flyers distributed around Nottingham. The cost was calculated using professional software called fotoQuote which was built into Mr Baird's website.
Mr Sheldon argued that the artists featured in the photograph were award-winning and internationally renowned. He said that he had had exclusive access to their tour bus, and that it was not commonplace for photographers to have such access, as contended by Daybrook. He argued that the famous subject matter and the exclusive access were relevant to the sums a photographer in his position would charge to license such a photograph and increase the price. Mr Sheldon also contended that the photograph had been used quite extensively by Daybrook and for an extended period.
Mr Sheldon also provided the court with estimates for the value of the use of the photograph. He prepared various estimates on two bases. The first was produced using his own fotoQuote software to give a figure for national or regional advertising. This resulted in a fee of £12,222.54, which he believed would be increased by about 20 per cent to £14,667.05 given the specific subject matter and characteristics of the image.
The second basis was a bespoke quotation, again using fotoQuote, based on the extent of the use of the image that he had established. Mr Sheldon provided a range of quotations from other online photographic licence agencies. The lowest figure was £4,030 from Retna and the highest was £6,160 from Getty Images. Mr Sheldon arrived at a figure of £4,735.31, which with the 20 per cent uplift resulted in a figure of £5,682.37.
Judge Birss QC found that the point that Daybrook would not have expected to pay more than a few hundred pounds for a photograph was, whilst not entirely irrelevant, not the critical issue. The question was focused on the actual photograph Daybrook used, and a reasonable royalty was that which would be associated with the use of the particular copyright work concerned. In other words, what would the copyright owner have earned for the reproduction of this photographic work by someone wishing to reproduce it?
Further, Judge Birss QC said, while there was no doubt there were pop stars who are more famous than Ke$ha and LMFAO, both were plainly very well-known and current acts. This increased the value of the photograph ‘to some degree’, he said. A factor of even more importance was the exclusivity of access. One of the things which made the photograph interesting was its back-stage party atmosphere, which in turn derived from the exclusivity granted to Mr Sheldon. That was also a factor which would enhance its value.
As for the extent of use of the photograph, Judge Birss QC accepted Mr Sheldon's evidence. The judge also preferred Mr Sheldon's evidence about the general level of fees that he would have been able to charge for the photograph for two main reasons. First, Mr Sheldon's evidence was more detailed and contained convincing corroborative material from other sources such as Getty Images and Retna. Secondly, Judge Birss QC doubted that it would be worthwhile for a photographer, going to the trouble of gaining exclusive access to a location, just to license the resulting photographs for a few hundred pounds.
However, Judge Birss QC rejected Mr Sheldon's first estimate as to value, as it was not based on the actual usage: the measure of damages should be based on the actual reproduction that had taken place. That meant that the most relevant elements of Mr Sheldon's evidence were the bespoke quotations. These produced a range of numbers from about £4,000 to £6,000 with Mr Sheldon's own figure coming to £5,682.37 (which included the mark-up as a result of the subject matter of the image, a point that Judge Birss QC had already accepted).
Accordingly, Judge Birss QC determined that the correct measure of damages was £5,682.37, exclusive of VAT and interest.
This case suggests that the courts are willing to take a pragmatic approach to determining fair licence fees for photographs based on the commercial realities of the world of professional photography. Whether infringement had actually occurred remains to be found (unless the parties settle) but the main point is that, taking all the factual circumstances into account, the court decided that the value of the photograph, had it been properly licensed for use, depended on the celebrity status of the subjects. The exclusivity of access of the photographer was also an important point, enhanced by that status.