Review Of The House Of Lords’ Decision In OK! v Hello!

The long-running saga of the Douglas & Zeta-Jones wedding and the two rival magazines is now finally over: the UK’s highest court has ruled on the matter1 and there can be no further appeal.

OK! had paid Douglas & Zeta-Jones one million pounds for the exclusive rights to publish any photographs of the wedding. The couple were to use one official photographer. No other photographers were permitted. No other photographers were permitted and all guests were requested not to bring cameras. Notwithstanding this, some unofficial photographs were taken and sold to Hello!.

OK! had no ground for pleading breach of copyright in these unofficial photographs and instead relied on a pleading of breach of confidence and interference with its business by unlawful means.

Breach Of Confidence

There was some disagreement in reaching a verdict: one view was that only the official photographs published by OK! could be said to be confidential and that this confidentiality was not breached by the unofficial photographs published by Hello!2.

Another view was that any confidentiality lasted only until OK! published the authorised photographs: “once the approved pictures were published, albeit simultaneously, publication of the unapproved pictures was not a breach of confidence3.”

The majority verdict held 3-2 that there was a breach of confidence. Lord Hoffmann stated:

“The point of which one should never lose sight is that OK! had paid £1m for the benefit of the obligation of confidence imposed upon all those present at the wedding in respect of any photographs of the wedding. That was quite clear. Unless there is some conceptual or policy reason why they should not have the benefit of that obligation, I cannot see why they were not entitled to enforce it.4

He went on to say:

“The essential purpose of the security arrangements and the prohibition of unauthorised photography were to impose an obligation of confidence in respect of any pictures of the wedding5… Whether there is still a point in enforcing the obligation of confidence depends on the facts. In this case, the point of the transaction was that each picture would be treated as a separate piece of information which OK! would have the exclusive right to publish6.”

This opinion was echoed by Lord Brown:

“Having paid £1m for an exclusive right it seems to me that OK! ought to be in a position to protect that right and to look to the law for redress were a third party intentionally to destroy it7…. The secret consists no less of each and every visual image of the wedding than of the wedding as a whole. Assume, for example, that OK! had chosen to publish photographs of the bride and groom in one issue, the guests in the next, and the presents later still. The confidence would, I think, continue throughout8.”

Unlawful interference with business

Having found for OK! on the grounds of confidentiality, Lord Hoffmann’s comments on interference were strictly obiter, dealing as they do with findings of fact rather than findings of law. Nevertheless, his comments are instructive:

“such a claim should not have failed for the reasons given by the judge and the Court of Appeal, namely that Hello! did not intend to cause loss to OK!9… the position of Senor Sanchez Junco [controlling shareholder of Hello!'s holding company] was that he wished to defend his publication against the damage it might suffer on account of having lost the exclusive. But that, it seems to me, is precisely the position of every competitor who steps over the line and uses unlawful means. The injury which he inflicted on OK! in order to achieve the end of keeping up his sales was simply the other side of the same coin. The injury to OK! was the means of attaining Senor Sanchez Junor’s desired end and not merely a foreseeable consequence of having done so.10… I would therefore have held that Hello! had the necessary intention to cause loss but not that they interfered by unlawful means with the actions of the Douglases11.”

Comment

There seems to have been a clear feeling that Hello! had undeniably done something wrong, even among those Lords who eventually ruled against OK!:

Lord Walker, for example, stated that “my initial inclination was to conclude that Hello! was liable to pay damages to OK! under the “unlawful means” tort.12.”

However, in approving the verdict, some may feel unease at the reasoning by which it was reached: all three Lords in favour of allowing OK!’s appeal ruled that there had been an obligation of confidentiality in view of the great deal of money paid by OK! to obtain the right.

This is a distinction over all other intangible property rights, where a degree of effort is required for their creation, be it skill, labour & judgement (copyright); creativity and originality (trade marks and designs); or inventive activity (patents). In their absence, the relevant right will not be held to exist.

It is a substantial step from this to rule that an intangible property can be created purely by the expenditure of a large sum of money. Such a ruling also begs the question of how large the sum need be.

There is no denying the authority of Lord Hoffmann in the field of intellectual property law. Nevertheless, it was not hitherto apparent that his power extended to creation ex nihilo.

Fiat lex!

For further information please contact Jon Broughton at HLBBshaw in Epping, Essex, UK

E-mail: jon.broughton@hlbbshaw.com. Visit the website at www.hlbbshaw.com.

The information provided in this document is, of course, of a general nature and should not be considered as legal advice; if you have any specific questions, please contact us as set out above. © HLBBshaw Ltd May 2007.

1Douglas and another and others v. Hello! Limited and others [2007] UKHL 21

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The information contained in this alert is provided for informational purposes only and does not represent legal advice. Neither the APLF nor the author intends to create an attorney client relationship by providing this information to you through this message.

 

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