MGN Ltd & Ors v Grisbrook [2010] EWCA Civ 1399

[2010] EWCA Civ 1399Case No A3/2009/2755IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CHANCERY DIVISION
Lord Justice Patten
CH 1999-03659
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 9 December 2010
Before
THE CHANCELLOR OF THE HIGH COURTLORD JUSTICE LEVESONLORD JUSTICE ETHERTON
Between
MGN LIMITED & ORSAppellantsALAN GRISBROOKRespondent
MR P GIROLAMI QC & MR G BANNER (instructed by Kerman & Co LLP) for AppellantsMR A WILSON QC (instructed by Edwin Coe Solicitors) for RespondentHearing Hearing dates : 23 & 24 November 2010
Judgment

The Chancellor:

[1]The appellant, MGN Ltd (“MGN”), is and at all material times has been the publisher of, amongst other well known newspapers, the Daily Mirror. The respondent, Mr Alan Grisbrook (“Mr Grisbrook”), is and has since 1974 been a well known freelance photographer. Between 1981 and 1997 Mr Grisbrook, like many other freelance photographers, supplied MGN with a large number of photographs for publication in the Daily Mirror and the other daily newspapers published by them. The basis on which he and the others did so was well established and included the following features:(1) the decision whether or not to use the photograph then or thereafter was for MGN alone;(2) it was for the photographer to ascertain whether his photograph had been used and, if it had, to claim payment;(3) the amount to be paid was agreed between the photographer and MGN in accordance with the then going rate known to both of them;(4) such payment covered use in the edition in which it was published, however many copies were printed, but subsequent use in a paper produced for a different day generated a further, albeit lower, fee;(5) photographs used or retained for possible future use were retained in the MGN Picture Library. There was no written agreement between MGN and Mr Grisbrook recording these features or any of them but it is common ground that copyright in each photograph was retained by Mr Grisbrook, MGN was entitled to publish it in one or more of its daily publications and Mr Grisbrook was entitled to be paid for each such publication. By a letter dated 13th October 1997 Mr Grisbrook terminated any licence to MGN to use his photographs.[2]In or about 1993 MGN’s hard copy picture library was moved to Watford. At the same time MGN established a digital picture library called FastFoto so that its editorial staff in Canary Wharf might have electronic access to its picture library. In 1998 MGN established the website <mirrorpix.com> as a means of marketing its picture library online. In addition to its picture library that website also held digital copies of various front pages of MGN newspapers.[3]In 1998 Mr Grisbrook commenced proceedings against MGN claiming £161,238 as licence fees in respect of the use of his photographs between 1982 and October 1997. In 1999 he commenced a second action against MGN in respect of alleged infringement of copyright by offering for sale on <mirrorpix.com> some of Mr Grisbrook’s photographs. The actions were subsequently consolidated and compromised by means of a Tomlin Order made on 9th December 2002. That order contained an undertaking by MGN that:
“...they will not infringe the Claimant’s copyright in photographs taken by the Claimant (whether by their servants or agents or any of them or otherwise howsoever), including without prejudice to the generality thereof: a) the photographs set out in the Schedules attached to the Statement of Claim herein; b) the photographs referred to in the Defendants’ Remittance Advices issued to the Claimant for the period 1982 to 1998; and c) the copies of photographs provided by the Claimant to the Defendant following the completion of his searches of the photographs in the Defendants’ possession referred to in paragraph 4 to Schedule 1 hereto; save that any Defendants shall not be in breach of this undertaking if they establish that they have taken all reasonable steps and used their best endeavours not to infringe the said copyright.”
The schedule contained terms as to payment, delivery up of all Mr Grisbrook’s prints, negatives and transparencies including duplicates of the same (defined as “the Claimant’s Material”) in the possession of MGN, deletion from FastFoto or any other electronic storage system and permission for Mr Grisbrook to attend the offices of MGN in Watford to identify his material in the possession of MGN. It was agreed that MGN did not have permission to use any of ‘the Claimant’s material’ and would deliver up any further such material as Mr Grisbrook found.[4]Between the date of the Tomlin Order and July 2004 Mr Grisbrook made frequent visits to the offices of MGN in Watford where he retrieved some 6,000 photographs and 2,000 electronically stored images. Copies of the Tomlin Order, penally indorsed, were served on MGN in July 2004 and on its director, Mr Paul Vickers, on 8th June 2005. Between February 2006 and April 2007 MGN established three further websites <architext.com>, <mydailymirror.com> and <mirrorarchive.co.uk>. I shall refer to their respective content, as required, later.[5]By an application notice issued in the consolidated action in April 2008 Mr Grisbrook sought the sequestration of the assets of MGN for its contempt constituted by the breach of its undertaking to the court contained in the Tomlin Order. The breach originally relied on was the infringement of Mr Grisbrook’s copyright by the sale or offering for sale of his photographs via its websites <architext.com>, <mydailymirror.com> and <mirrorarchive.co.uk>. This was amended on 17th July 2008 so as to aver that MGN had:
“(a) reproduced the Claimant’s photographs in a database known as “MirrorPix” and further communicated them to the public contrary to section 20 of the Copyright Designs and Patents Act 1988 by making the said database available to the public by electronic transmission in such a way that members of the public may access it from a place and a time individually chosen by them, by means of the Defendant’s website mirrorpix.com. (b) reproduced the Claimant’s photographs without the Claimant’s consent in the form of a database or databases comprising reproductions of back numbers of the Defendants’ newspapers. (c) communicated the Claimant’s photographs to the public contrary to section 20 of the Copyright Designs and Patents Act 1988 by making the said database available to the public by electronic transmission in such a way that members of the public may access it from a place and at a time individually chosen by them, by means of the Defendant’s websites mydailymirror.com, mirrorarchive.co.uk and arcitext.com. (d) sold and/or offered for sale from the said database photographs taken by the Claimant, the subject of his copyright, via its said websites mydailymirror.com, mirrorarchive.co.uk, and arcitext.com.”
[6]The application was heard by Patten LJ over two days in November 2008 and three in July 2009. Evidence was given on affidavit, as the claim was in respect of an alleged contempt of court, by Mr Grisbrook and his solicitor and by six witnesses for MGN, of whom Mr Grisbrook and Mr Collier White for MGN were cross-examined. For the reasons given in his judgment handed down on 16th October 2009, to which I shall refer later, Patten LJ made no order on the application for the committal of MGN, its directors or officers. Instead his order contained a recital of concessions made by Mr Grisbrook and made two declarations. The concessions were:
“that MGN is entitled (1) for archival purposes to copy, retain, and store copies of the photographs in which he owns the copyright as incorporated in previously published editions of the Defendants’ publications (“the photographs as published by MGN”) in electronic form or in any other form used from time to time in the publishing industry and (2) to use the same for its internal purposes and (3) to make the same available to third parties as part of the MGN archive but only non-commercially, and as permitted by law.”
The declarations are “1. That the making available to the public through the websites “mydailymirror.com” “arcitext.com” and “mirrorarchive.com” of photographs the copyright in which was vested in the Claimant constituted an infringement of the copyright in such photographs. 2. That such copyright was infringed by the acts referred to in declaration 1 irrespective of whether the photographs were incorporated alone or when forming part of a reproduction of a printed page of a published newspaper.”[7]MGN now appeals with the permission of Etherton LJ. Before Patten LJ there were four principal issues. They were(1) whether on the construction of the Tomlin Order the undertaking extended to the acts complained of,(2) whether the licence to MGN from Mr Grisbrook authorised those acts so as to preclude any infringement of Mr Grisbrook’s copyright and, consequently, of MGN’s undertaking,(3) whether the copyright of Mr Grisbrook in his own photographs was subsumed into the copyright of MGN in the newspaper in which Mr Grisbrook had consented to their publication and(4) whether MGN was entitled to defend the allegation of contempt by relying on the public interest defence preserved by s.173(3) Copyright, Designs and Patents Act 1988. Patten LJ answered the first in the affirmative and the other three in the negative. Before this court the argument was effectively limited to the second issue, namely whether the licence Mr Grisbrook granted to MGN when he handed over the original photograph extended to making them available to the public through <mydailymirror.com> <arcitext.com> and <mirrorarchive.com> either individually or as part of the newspaper as a whole. I will deal with that issue later, but first it is necessary to (1) refer to the relevant provisions of the Copyright Act 1956 (“the 1956 Act”) and the Copyright, Designs and Patents Act 1988 (“the 1988 Act”) as originally enacted and as subsequently amended, (2) describe the relevant websites and their contents in more detail, and (3) summarise the relevant parts of the judgment of Patten LJ.

The relevant statutory provisions

[8]As summarised above, the period during which Mr Grisbrook supplied photographs to MGN extended from 1981 until October 1997. It is common ground that the submission and use of each individual photograph gave rise to a separate contract. Accordingly until the provisions of Chapter II of Part 1 of the 1988 Act came into force on 1st July 1989 the acts protected by the copyright in the photograph were those prescribed in relation to artistic works by s.3(5) of the 1956 Act namely reproducing it in any material form or publishing it. From 1988 to 1997 those acts were augmented by s.16(1) of the 1988 Act so as to include issuing copies, communicating the work, showing or renting or lending it to the public.[9]The provision now relied on was added to the 1988 Act as s.20 by the Copyright and Related Rights Regulations 2003/2498 with effect from 31st October 2003. It follows from a consideration of the relevant dates that none of the individual contracts under which Mr Grisbrook supplied photographs to MGN nor the Tomlin Order was made at a time when s.20 of the 1988 Act in the form now relied on was in operation. That section provides:
“20 (1) The communication to the public of the work is an act restricted by the copyright in – (a) a literary, dramatic, musical or artistic work, (b) a sound recording or film, or (c) a broadcast. (2) References in this Part to communication to the public are to communication to the public by electronic transmission, and in relation to a work include – (a) the broadcasting of the work; (b) the making available to the public of the work by electronic transmission in such a way that members of the public may access it from a place and at a time individually chosen by them.” (a) a literary, dramatic, musical or artistic work, (b) a sound recording or film, or (c) a broadcast. (b) the making available to the public of the work by electronic transmission in such a way that members of the public may access it from a place and at a time individually chosen by them.”
[10]It is also necessary to consider the position of MGN in relation to each edition of the Daily Mirror as published. It is not disputed that it constituted a compilation the copyright in which, as a literary work, vested in MGN pursuant to ss.2 and 48(1) of the 1956 Act and s.3(1)(a) of the 1988 Act. It follows that in relation to its newspaper MGN was entitled to prevent the protected acts relating to a literary work for which the 1956 Act and the 1988 Act provided.[11]Before Patten LJ it had been submitted for MGN that the inclusion of Mr Grisbrook’s photographs, with his consent, in the published edition of the Daily Mirror precluded him from asserting his own copyright in any way which was inconsistent with the exploitation by MGN of its separate copyright in its literary work. Counsel for MGN had relied on the decision of the Supreme Court of Canada in Robertson v The Thomson Corporation [2006] SCC 43. This submission was rejected by Patten LJ. In paragraph 67 of his judgment he concluded:
“The concept of a “collective work” (as opposed to a compilation) is not a feature of the 1988 Act and there may be provisions in the Canadian Act which give such works a measure of special protection. But the decision is, I think, inconsistent with English law which, so far as I am aware, has never treated copyright in a compilation as providing a defence to a claim for infringement brought by someone whose own copyright material has been included without his consent. The rights of copyright owners are governed by the 1988 Act and there is nothing in the Act which limits the rights under s.16 of someone in the position of Mr Grisbrook in the event that his work is included in a newspaper or other compilation. He retains the exclusive right to copy the work save to the extent that he licenses the publishers to do so. MGN are not therefore assisted by the Canadian decision.”
MGN does not appeal from that conclusion. It follows that Mr Grisbrook is entitled to assert his copyright in the photograph so as to inhibit the exploitation of its copyright in the newspaper by MGN unless he is to be treated as having consented to it. The contents of the websites <mirrorpix.com>

The contents of the websites

[12]The first website, <mirrorpix.com>, was set up by MGN in 1998 as a means of marketing its FastFoto picture library online. Originally it held only pictures in which MGN owned the copyright. By 1998 it held about 350,000 images. Though intended only to hold images of which MGN owned the copyright at the time the Tomlin Order was made it included full copies of various front pages which contained photographs supplied by Mr Grisbrook in which he held the copyright. The website was redesigned in 2005 in consequence of which only a few of such front pages remained. Since April 2006 none has been added. By April 2008, after repeated and varied complaints from Mr Grisbrook, all the images of which he complained had been removed from this website. But his original complaint, formulated in paragraph (a) of the Application Notice, of infringement in breach of the undertaking contained in the Tomlin Order by inclusion of Mr Grisbrook’s photographs remained. It did not feature in the order of Patten LJ and therefore is not part of the subject matter of this appeal.

<arcitext.com>

[13]This website was launched in February 2006 as an online research source. It is operated by Digitorial Ltd but owned by MGN. It holds the archives of the Daily Mirror from 1903 to the present. It was described by Patten LJ as follows: ”36…The articles are presented in pdf format which therefore reproduces the relevant part of the newspaper in the same format in which it was printed. 37…To use the website it is necessary to register with it. The target market is said to be academic and library users belonging to an institution which is a subscriber to the service. It is, however, possible for individuals to become subscribers and registered users. Once registered a user can download a pdf file of a page of the Daily Mirror to their personal computer and to print it, although the quality is variable. No greater rights of reproduction are, however, granted to users by virtue of their registration. Non-subscribers who access the site are unable to view anything other than thumbnail images of an entire page.”[14]The use of this website to carry copies of Mr Grisbrook’s photographs as a part of the published newspaper was part of the complaint of infringement made in both the original and the amended application notices. In addition it features in the first declaration made by Patten LJ, notwithstanding the terms of the first concession made by Mr Grisbrook and recorded in the first recital to his order. Presumably this is on the basis that the use of this website is not solely internal and non-commercial. It is not the subject of any separate ground of appeal.

<mydailymirror.com>

[15]This website was launched in June 2006. Its content and use were described by Patten LJ in paragraph 32 of his judgment in these terms:
“It enabled users to access the front pages of editions of the Daily Mirror from 1903 to the present day. The only search facility was by date of publication. A user could select the front page for a particular day and then purchase a reproduction of it either in poster form or with it printed on T-shirts or greetings cards. Most of the front pages pre-date on-line publication and were therefore scanned into the database from microfiche or from hard copies of the papers. There is therefore some loss of quality in the images but they are sufficient for the purposes of the reproductions available.”
[16]Following complaints from Mr Grisbrook on and after 12th October 2006 all the front pages carrying photographs supplied by him were removed from the website, according to MGN, to appease Mr Grisbrook. It featured in both the original and amended complaint made in the application notice and was included in the first declaration made by Patten LJ.

<mirrorarchive.co.uk>

[17]This website was established in April 2007. It was described by Patten LJ in paragraph 38 of his judgment in these terms:
“mirrorarchive.co.uk is owned by MGN and was set up as a beta test site in April 2007. It is not fully operational and has been open only to a small number of selected users in order to test its functionality. When fully operational it is intended to be the commercial equivalent of arcitext.com. Subscribers will be able to access and download the whole or selected pages of all Daily Mirror newspapers published since 1903. The database therefore stores electronically in pdf format complete copies of all such papers. It is not limited to front pages. There is a dispute as to how profitable the site will be but that is largely irrelevant to this application. It is intended to be a commercial operation.”
It follows that such website will include, as part of the published newspaper, such photographs of Mr Grisbrook as were originally reproduced in it.[18]This website was part of the original and amended complaint contained in the Application Notice. It is also comprised in the first declaration made by Patten LJ. Of all the websites this one raises most clearly the issue which concerns MGN. If each contributor, like Mr Grisbrook, is entitled to complain of the inclusion on the website of his copyright work as part of the published newspaper, then, in the absence of more formal and clearer licences, MGN will be practically unable to exploit its copyright in the newspapers as a whole online by means of their inclusion in a website.

Judgment of Patten LJ

[19]In paragraphs 1 to 28 Patten LJ set out the facts in appropriate detail given that there were issues of fact on which there had been cross-examination of deponents. In paragraphs 28 to 39 he described the specific complaints of Mr Grisbrook by reference to each of the four websites. In paragraphs 40 to 44 he summarised and explained the four issues I have mentioned. In paragraphs 45 to 50 he disposed on the issue of construction of the Tomlin Order. That was one ground of appeal. It was not pursued in oral argument before us, though it was suggested that on one view of the infringement issue it might re-emerge in that context. It did not. In paragraphs 50 to 65 the Patten LJ dealt with the issue of infringement which is at the heart of this appeal. I will return to those paragraphs later. In paragraphs 66 to 67 and in paragraphs 68 to 71 Patten LJ considered and rejected the contentions I summarised in paragraph 7(iii) and (iv) above.[20]In paragraphs 72 to 77 Patten LJ considered the issues of contempt. He indicated (paragraph 72) that in the case of <mirrorpix.com> there had been at most a technical breach of the Tomlin Order which had been remedied once the problem which had caused it had been identified. Accordingly he would have taken no further action in that respect anyway. In respect of the other three he held that the contempt, which he had found, involved an important but by no means straightforward point of law. He held (paragraph 74) that disputes of that nature should not be resolved on committal applications and concluded in paragraph 77:
“Although my decision is that the operation of the back numbers websites does infringe Mr Grisbrook’s copyright in his photographs, those rights can be adequately protected by a declaration to that effect. This is not a case where there has been any deliberate or conscious non-compliance with the consent order and I do not therefore propose to take any further action in respect of the breach of the undertaking which it contains.”
Accordingly the crucial passages in the judgment of Patten LJ are in paragraphs 51 to 65 where, in the result, he explains the reasons for making the declarations of which MGN now complain.[21]In paragraph 53 Patten LJ recognised that the central issue was:
“whether the licence which Mr Grisbrook undoubtedly gave to MGN to use his photographs in their newspapers extended to the storage of and access to his work provided by arcitext.com and mirrorarchive.co.uk websites.”
[22]He noted that:
“54…MGN has for many years stored archived hard copies of its newspapers and microfiched copies of complete editions for each day of publication since 1903. This material has always been available to journalists with MGN and access is also granted to professional researchers for a fee. 55. Print overruns are delivered to a commercial organisation (Historic Newspapers) and are available for purchase by the general public. MGN also deposits copies of its publications with the British Library under the Legal Deposit Libraries Act 2003. The British Library archive is stored at Colindale and public access is free.”
[23]After referring to the evidence of Mr Grisbrook he found that (paragraph 57):
“Mr Grisbrook and other freelance photographers were obviously aware that MGN, like any other newspaper publisher, would retain an archive of published editions. At the time he supplied his photographs this was done in the form of hard copies and microfiche. No photographer could have intended to retain a veto on the newspaper’s ability to store back editions in a safe and effective way and this licence would, in my judgment, have extended to any forms of new technology available from time to time for that purpose. It would therefore have been an implied term of the dealings with the paper that storage, whether on microfiche or in electronic form, was permitted. The only real issue as I see it is whether the licence also extended to making the back numbers database more widely available to members of the public.”
[24]Patten LJ noted in paragraph 58 that there were very few express terms of the oral contracts between Mr Grisbrook and MGN so that:
“The terms of the licence have therefore to be determined as a process of implication from the course of dealing between the parties. From that it is clear that he gave MGN a licence to publish any of his photographs submitted to them on payment of a fee. A further fee was payable in the event of any further publication of the photograph in a later edition. In the meantime, MGN had his consent to retain and store the photographs in their picture library which, in time, came to include a digital library.”
He recorded that the licence to use the photographs in future publications was clearly terminable and had been determined.[25]Patten LJ then referred at some length to the judgment of Lightman J in Robin Ray v Classic FM plc [1998] FSR 622. He concluded in paragraph 65:
“It seems to me that the approach of Lightman J is consistent with the fact that any licence represents a derogation from or relaxation of the copyright owner’s statutory rights. It must therefore be for the defendant to justify (absent express agreement) the basis for extending the licence to cover what would otherwise be separate acts of infringement. Although that test is, in my judgment, satisfied in respect of the compilation of the database and its use for archive purposes, its exploitation through the back numbers websites seems to me to be a different kind of operation which was not contemplated at the time when the licence was granted and cannot be said to have been necessary to regulate the rights of the parties at that time. For these reasons, I take the view that Mr Grisbrook’s copyright in his photographs has been or would be infringed by the operation of the back number websites.”
It is clear from this passage that the principle applied by Patten LJ is that the extent of the licence granted by Mr Grisbrook to MGN for each photograph is to be that contemplated at the time the licence was granted and what is necessary to regulate the rights of the parties at that time. The issues on this appeal are (1) whether Patten LJ deduced the correct principle by which to ascertain the ambit of the licence granted by Mr Grisbrook to MGN and, if so, (2) whether he applied it correctly to the facts as found by him.

The submissions for the parties and my conclusion

[26]Counsel for MGN submits that the judge did not adequately consider the context in which the issues arose. They complain that he failed to recognise that MGN was entitled to the copyright in each of the newspapers which were reproduced on each website. They pointed out that no contributor or combination of contributors to each edition, each of whom would be entitled to copyright in his own contribution, was entitled to control the exploitation of the copyright by MGN in the newspaper as a whole. Accordingly, Patten LJ took too narrow a view of the facts from which the appropriate inferences were to be drawn. Second, they suggest that his reliance on the judgment of Lightman J in Robin Ray v Classic FM plc was misplaced because in that case, accepting that Classic FM had copyright in its database, there were no overlapping copyrights, as in this case, which have to be considered in determining what inference to draw. Third, they observe that the judge never explained why, if the licences were properly terminated so as to preclude any further use by publication of Mr Grisbrook’s photographs in their individual newspapers, MGN might nevertheless continue to exploit them on its websites as part of its previously published editions.[27]In particular, inclusion on the website of Mr Grisbrook’s photographs as part of the previously published newspapers involved at least three acts of infringement namely internal reproduction, external exhibition to the public and enabling members of the public to download and reproduce copies of Mr Grisbrook’s photographs at will. They submit that the websites were, in the judge’s words “a different kind of operation”, only in a technical and irrelevant sense.[28]Counsel for Mr Grisbrook submitted that the judge was right for essentially the reasons he gave. In effect the exploitation of the photographs of Mr Grisbrook by inclusion in a website, from which copies may be downloaded and printed at will, is a new method of exploitation which, by reference to the conditions prevailing in the period from 1981 to 1997, is wholly outside anything the parties could have had in contemplation at the time the photographs were first submitted to MGN or published in the Daily Mirror. He submitted that the judge was right to apply the test formulated by Lightman J in Robin Ray v Classic FM Ltd and that the distinction relied on by counsel for MGN was non-existent or without difference.[29]As I have already recorded, it is common ground that there was a separate contract between Mr Grisbrook and MGN in relation to the reproduction of each photograph produced by the former and submitted to the latter for publication in its newspapers. The contract was formed by conduct, no terms were reduced to writing nor is there any evidence that there was any express oral agreement in relation to any of them. It follows that the broad principle to be applied is that stated by Jacobs J in Beck v Montana Constructions Pty [1964-5] NSWR 229, 235, cited with approval by Widgery LJ in Blair v Osborne & Tomkins [1971] 2 QB 78, 87 and applied by Lightman J in Robin Ray v Classic FM plc [1998] FSR 622, namely:
“...the engagement for reward of a person to produce material of a nature which is capable of being the subject of copyright implies a permission or consent or licence in the person giving the engagement to use the material in the manner and for the purpose in which and for which it was contemplated between the parties that it would be used at the time of the engagement.”
[30]It follows, and was not disputed, that the application of this principle gave rise to a licence to reproduce the photograph in the Daily Mirror and to add the photograph, both separately and as part of the published newspaper, to the MGN archive and picture store. A second or subsequent use might be made of the photograph but on terms that MGN paid Mr Grisbrook a further fee. (I see no need to consider separately the position in relation to the so-called ‘rag-out’.) It is accepted by the concession recorded in the order under appeal that the licence extended to reproducing the photograph and newspaper in a microfiche and, later, in an electronic form as part of the MGN archive. It is not suggested that Mr Grisbrook was not entitled to revoke the licences by his letter of 13th October 1997. All his photographs have now been removed from MGN’s archive. But such revocation extended only to future use. It could not retrospectively constitute the previous publications of Mr Grisbrook’s photographs in the Daily Mirror as infringements. All those publications remain in the MGN archive and copyright in them is vested in MGN.[31]There are many reported cases in which the issue arose as to whether a written licence extended to subsequent forms of technology. That has depended on the form of words used and has not, for the most part, been limited to the technology which the parties contemplated at the time they entered into the relevant licence. Such cases include Hospital forSick Children v Walt Disney Productions [1968] 1 Ch.52 and Serra v Famous-Lasky Film Service Ltd (1922) 127 LT 109. In those cases the modern jurisprudence on the interpretation of written agreements culminating, for the moment, in A-G of Belize v Belize Telecom Ltd [2009] 1 WLR 1988 may need to be re-examined. But this appeal does not concern a written contract. The implication is not to be made into a written contract from the words used in their context but into a contract by conduct “from the manner and for the purpose in which and for which it was contemplated between the parties that it would be used at the time” the contract was made.[32]Counsel for MGN submits that in the case of implication into contracts by conduct the restrictions and limitations to which Lightman J referred in Robin Ray v Classic FM plc are inapplicable. They refer to the decision of the Court of Appeal in Blair v Osborne & Tomkins [1971] 2 QB 78 and the decision of Park J in Brighton v Jones [2005] FSR 288. In the former an architect had prepared plans for the construction of two houses on a plot owned by his clients for which planning permission was required. Permission was duly obtained but the plot was sold to builders who built the house with the use of the architect’s plans. The architect sued the builders for infringing his copyright. The Court of Appeal applied the principle established by Beck v Montana Constructions Pty and concluded that the benefit of the licence was available to the purchaser of the plot. There was no discussion of necessity. Similarly in Brighton v Jones the claimant had sent a draft opening script to a playwright who had been commissioned to write a play for production in Ireland for a nine month period. The play was so produced and performed but the playwright then rewrote parts and exploited the copyright more extensively and thereby achieved considerable commercial and critical success. Park J refused to limit the extent of the licence implied in favour of the playwright to the original purpose. He held that the licence was gratuitous and, at the time, unrevoked and unlimited. His conclusion was not based on considerations of necessity either.[33]Robin Ray v Classic FM plc [1998] FSR 622 concerned copyright in five documents by which the claimant acting under a consultancy agreement with the defendant categorised tracks embodying sound recordings for the purpose of incorporation into a database being assembled by the defendant. In paragraphs (1) to (6) on pages 641/2 Lightman J considered whether the court should imply ownership of the copyright in the commissioner or a licence from the person commissioned to produce the work. In application of those principles he held that the claimant was entitled to the copyright in those documents and the defendant was a licensee not a joint author. Lightman J then considered in paragraphs (8) to (9) the extent of that licence. He said:
“(8) if necessity requires only the grant of a licence, the ambit of the licence must be the minimum which is required to secure to the Client the entitlement which the parties to contract must have intended to confer upon him…. (9) the licence accordingly is to be limited to what is in the joint contemplation of the parties at the date of the contract, and does not extend to enable the Client to take advantage of a new unexpected profitable opportunity.”
[34]It is clear that in its context the necessity referred to in the opening words of (8) is in relation to the issue of copyright ownership or licence. It is also clear that in the rest of (8) and the whole of (9) Lightman J is considering the extent of the licence and adopting the test enunciated in Beck v Montana Constructions Pty and adopted by the Court of Appeal in Blair v Osborne & Tomkins [1971] 2 QB 78. Indeed the formulation of Lightman J was specifically approved by the Court of Appeal in Griggs v Evans [2005] EWCA Civ 11, albeit in the context of the ownership of the copyright.[35]What this consideration of the authorities shows is that the test to be applied is that formulatedin Beck v Montana Constructions Pty [1964-5] NSWR 229, 235, cited with approval by Widgery LJ in Blair v Osborne & Tomkins [1971] 2 QB 78, 87, applied by Lightman J in Robin Ray v Classic FM plc [1998] FSR 622 and approved by the Court of Appeal in Griggs v Evans [2005] EWCA Civ 11. It follows that the principle identified by Patten LJ in paragraph 65 of his judgment by which to ascertain the ambit of the licence granted by Mr Grisbrook to MGN was the correct one.[36]In relation to the application of that principle the area of disagreement is limited. In paragraph 65 of his judgment Patten LJ recognised that the application the correct principle gave rise to a licence to copy Mr Grisbrook’s photographs and any other infringing act in relation to the compilation of the MGN database and its use for archive purposes. The dispute relates to the commercial exploitation of that database by means of the three websites to which I have referred.[37]It is not suggested that such exploitation was within the contemplation of the parties at the various times between 1981 and 1997 when the relevant photographs were submitted by Mr Grisbrook to MGN. Nor is it suggested, with the possible exception of a ‘rag-out’, that any second publication of one of Mr Grisbrook’s photographs would not generate a liability to Mr Grisbrook for a further fee. What is suggested is that the website is an alternative means of delivery of the original newspaper. Because there was no limit on the numbers which might have been published originally the operation of the website should be regarded as only further delivery of the original, licensed, paper.[38]For my part I would agree that the operation of the website can be regarded as further delivery of the original, but not that it can only be so regarded. A website operates over a global area, its coverage is greatly in excess of anything MGN could have reached with hard copy newspapers. It enables a member of the public to read it before deciding whether he wants a hard copy and the production of hard copies by the public far in excess of anything MGN could have produced. The extent of the market and the costs incurred in reaching it are quite different to those of the hard copy newspapers of the past. There is no need to emphasise the differences further. The suggestion that an intention may be imputed to Mr Grisbrook and MGN from their conduct in relation to Mr Grisbrook’s photographs in the period 1981 to 1997 that MGN should be entitled without further charge to exploit the copyright of Mr Grisbrook in his photographs by inclusion on their websites is, to my mind, unacceptable. Newspapers are essentially ephemeral and, save for the enthusiastic collector, retain no long lasting status: the parties will have intended that they would be treated as daily papers are generally treated, that is to say, read and replaced with the following day’s edition. To incorporate the pictures into the website is to provide a permanent and marketable record easily available world-wide which could well reduce the value of the further use by Mr Grisbrook of the photographs over which it is common ground he possesses the copyright. That is why, to my mind, this is not just a question of degree but of kind.[39]Counsel for MGN contend that the judge failed to take account of the fact that MGN owned the copyright in the newspaper as a whole. It cannot be suggested that he was unaware of the existence and ownership of MGN of copyright in its newspaper for that was the subject matter of paragraphs 66 and 67. In the passage from paragraph 67 I have quoted in paragraph 11 above Patten LJ made it clear that copyright in the compilation does not affect the rights of the owner of copyright in its parts unless he licenses its further publication. The existence of such overlapping copyrights demonstrates the need for the compiler to obtain sufficient licences from his contributors.[40]Then it is suggested that the decision of Lightman J in Robin Ray v Classic FM plc is distinguishable on the ground that in that case there were no overlapping copyrights such as there are in this. In my view there are at least two answers to that objection. First, there were two overlapping copyrights in that case, one in Robin Ray in the five documents the other in Classic FM in the database. But, second, the principle applied was that derived from the other cases I have referred to and is of general application irrespective of the number of copyrights involved.[41]It was also objected that that the judge failed to explain why, if the licences implied from Mr Grisbrook to MGN had been revoked but MGN was still entitled to continue to exploit its hard copy back numbers it was not entitled to exploit them by means of its websites. The short answer to that submission is that s.20 of the 1988 Act recognises that exploitation by electronic means is different in kind from exploitation of existing hard copies and can constitute an infringement in the case of the former even if it is not in the case of the latter.[42]For all these reasons I would dismiss this appeal. I would add a few words about the procedural context in which these issues have arisen. The proceedings were by way of application in the consolidated action in which the Tomlin Order was made. The only issue in that application was whether the undertaking by MGN contained in that order had been infringed. That depended on, and only on, whether the acts alleged in paragraphs (a) to (d) of the amended application infringed Mr Grisbrook’s copyright in photographs taken by him. There were no pleadings and no discovery. The evidence was not directly related to the terms of the licence to be implied. Such a process is ill-suited to the determination of the issues covered by the declarations made by Patten LJ. I have sought to deal with the issues argued before us so as to determine this appeal on its merits, but I am left with the uncomfortable feeling that it would have been better if Patten LJ had merely dismissed the contempt application leaving the issues as to implication of licence terms to an action in which they are directly raised.

Lord Justice Leveson:

[43]I agree.

Lord Justice Etherton:

[44]I also agree.

Cited in 1 later judgment