FRAND trial necessary to decide damages

In Koninklijke Philips NV v Asustek Computer Inorporation [sic] & Ors [2020] EWHC 29 (Ch) (17 January 2020), Marcus Smith J dismissed the defendant 's application in which it sought to get out of a trial (due later this year, listed for five days) to determine the terms of a FRAND licence. Asus had earlier been held to have infringed the Philips patent, which had been declared essential to a telecommunications standard. Asus had decided to consent to a permanent injunction and did not want a FRAND licence, so one can understand why they would rather like to save the trouble and expense of five days in court.

Asus proposed that the correct measure of damages would be the royalty rate in the FRAND licence (when that was settled) times the number of devices that infringed. Simple!

The judge did not see it that way, though. That could under-compensate Philips, which was probably why it appealed to Asus.

On the other hand, he didn't like Philips's argument either. They said that damages should take into account that the FRAND licence would be worldwide, covering all their relevant patents and all the companies in the Asus group. That, to the judge's mind, risked usurping the jurisdiction of other courts, and over-compensating Philips. Working out the damages was something that could only be done at the FRAND trial, so Asus's application failed.

Damages for unauthorised use of photographs

The Patents County Court nowadays has to have a clear idea about the amount of damages at stake in actions before it, so in Sheldon v Daybrook House Promotions Ltd [2013] EWPCC 26 (8 May 2013) it had to take an initial view about the value of a claim for a photograph of a couple of popular musicians together.  This would determine whether the case should remain on the small claims track or whether it should be allocated to the multi track.  The amount that the Court thought might be at stake would also have a significant bearing on the prospect of settlement.

The Claimant was a professional photographer, and in that capacity he had exclusive access to the tour bus on which the musicians were travelling.  The Defendant ran a nightclub and without permission it used the photograph on printed material, online advertisements and its Facebook page.  It said it would have expected to pay no more than a few hundred pounds for that but the Judge was unimpressed.  He took the view that it was irrelevant what the claimant would have paid, and what mattered was the Claimant’s evidence about the rates that he would normally charge for such a photograph.  On that basis he decided that if the Claimant succeeded the damages that would be awarded would amount to £5,682 – plus VAT, of course.

Music royalties claim lives on

Wadsworth v Granada International Media Ltd and Granada Ventures Ltd [2011] EWPCC 20 is a judgment handed down on 9 June by HHJ Birss QC in the Patents County Court, involving the music from Space 1999, a TV series from the seventies, produced by Gerry and Sylvia Anderson in which nuclear waste stored on the far side of the moon explodes (on 13 September 1999) and sends the satellite hurtling off into space. What a ridiculous storyline ... Its transmission dates coincide pretty closely with my days as a full-time student, which explain why I never saw it, never even was aware of it until now as far as I can recall. Derek Wadsworth was a jazz musician and composer who wrote the music for some of the second series of Space 1999. He died in 2008 and his children were the claimants in this action.

Copyright in the music for the series was assigned to ATV Music, now part of the Sony empire. Mr Wadsworth was entitled to half the royalties earned by the publisher, which (with DVD releases and so on) should have been a substantial amount, but he felt he was receiving less than he should have had - perhaps a common condition among composers, as it is among authors, but not necessarily one that is without a remedy. He asked the publisher about it and they said they were handing over half of what they received, which meant that perhaps they were not being paid what was due to them. So a claim was issued against the company responsible for exploiting the programmes. The defendants applied to strike it out on the grounds that there was no privity of contract between Mr Wadsworth and them - his contract was with the publisher, which would therefore have been the party to pursue the payments.

In October 2008 the matter came before HH Judge Fysh QC, who made an order for disclosure of the licences entered into by the defendants, and Mr Wadsworth's solicitors raised a number of questions on the basis of this information by letter of 1 December that year. Two days later Mr Wadsworth died, and it was a couple of years before the court substituted his children as claimants. A case that has barely got started after four years is of course anathema to the Patents County Court, and the judge agreed with counsel for the claimants that the court had to grasp the nettle.

Regarding the strike out application, the judge considered there were two possibilities: either Granada had obtained clearance from the publisher before licensing the exploitation of the programmes, in which case there would be a pile of contracts somewhere, or it had failed to do so. The claimants contended that the defendants owed them a duty - referring to their having a beneficial interest in the copyright, which was clearly not the case, although they could be said to have an interest under the copyright - the right to half the royalties. The case was therefore firstly pleaded as a breach of a duty of care - in other words, it was a claim in negligence.

The second claim alleged a fiduciary duty, and the third that under the Contracts (Rights of Third Parties) Act 1999 the claimants could enforce contractual rights against the defendants.


On the basis of the judgment of the House of Lords in White v. Jones [1995] 2 AC 207 the judge rejected the argument that there was a duty of care, absent a special relationship between the parties. As for the contract point, it was not inconceivable that one or more of the pile of contracts (ones entered into since the 1999 Act came into force) could give the claimants the opportunity to take action against Granada, and accordingly the judge made a disclosure order - a Norwich Pharmacal order, designed to require the defendants to assist the claimants (Norwich Pharmacal Company & Ors v Customs And Excise [1973] UKHL 6 (26 June 1973)) - requiring those contracts to be produced. The fiduciary claim he also regarded as pretty unlikely, but not hopeless. So he left in two of the three claims, ordered disclosure, set a date for a case management conference, and urged (gently) the claimants to get their pleadings sorted out with a view to applying at the CMC to add Sony as a party, which he identified as the key to the claim.

There are some interesting points here about how to deal with a failure to pay the right royalties. I wonder why Sony were not added to the proceedings in the first place? Well, it seems they will be - although a lot of costs have presumably been thrown away getting to the present position.

Reading the judgment, I realise how impressed I have been with all the judgments rendered by Judge Birss since his appointment. They are extremely clearly expressed, thoughtful, helpful to the parties (where the parties deserve help) and, well, humane. Not that other judges don't achieve this too, but these PCC judgments really see to me to be exemplary.