Far Out Productions v Unilever UK & CN Holdings and others (High Court of Justice — 16 December 2009)
The claimant, Far Out Productions, made an application to be relieved from the usual costs consequences of discontinuing its action against Water Music Productions.
The claimant brought proceedings against Water Music and alleged that it deliberately infringed its copyright and deliberately concealed the infringement. Water Music is a music production company instructed by BMP DDB, an advertising company working for Unilever UK & SN Holdings and Unilever Bestfoods UK.
The claimant is a corporation that owned the rights to a sound recording used in an advert for Unilever UK and Unilever Bestfoods' product. It was common ground that no license to use the original sound recording was sought. In May 2004, both Unilever companies and BMP conceded innocent copyright infringement and suggested negotiations, although Water Music denied liability throughout. It was a small family company with an excellent reputation, which was inevitably subjected to great pressure by litigation involving detailed investigations into a routine piece of business conducted more than 10 years earlier.
The claimant was responsible for considerable delays, which resulted in proceedings extending over a period of more than four years before the claimant decided to discontinue them. The allegations against Water Music were always highly unlikely to succeed because there was no significant evidence to support them, and because it would have made no sense at all for Water Music to have deliberately infringed the claimant's copyright.
The court found that the claimant started proceedings that were very unlikely to succeed; there was no sensible reason to bring them; the proceedings were unduly protracted; and the claimant had made grossly excessive demands and unreasonably refused to negotiate. The claimant's application was dismissed and the claimant was ordered to pay Water Music's costs on the indemnity basis.
The decision highlights the importance of claimants taking a pragmatic approach to issuing proceedings. If a defendant was pursued unreasonably and the claim discontinued, indemnity costs would be awarded.
Victoria Cargill, BLM Manchester
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