Appeal denies OK! exclusive rights to Douglases' wedding

Wedding photographs. Happy memories of that special day, captured forever on film, to share with family and friends - and, if you happen to be a celebrity, the rest of the world.

When Hollywood film star Michael Douglas announced he was to marry Welsh beauty Catherine Zeta-Jones, OK! Magazine paid the couple £1m for 'exclusive' official photographs of the wedding.

But another photographer sneaked into the high-security party at the Plaza hotel in New York, caught 15 snaps of the newlyweds, and sold them to OK!'s rival Hello! for £125,000.

Last week, in the latest stage of long-running litigation arising from OK!'s and the Douglases' claims for breach of confidence and privacy, the Court of Appeal unanimously overturned a High Court decision - to the delight of Hello! and its legal team - while upholding the Douglases' privacy claim and their £14,500 damages.

"To spend over £4m to recover a total of £14,000 is grand folly indeed," says Hello! lawyer Matthew Higdon of media boutique M Law.

But the ruling will have wider implications for media lawyers, who are now pondering what the panel of the Master of the Rolls, Lord Phillips of Worth Matravers, Lord Justice Clarke and Lord Justice Neuberger said in their 70-page decision.

First, in overturning High Court judge Mr Justice Lindsay's findings against Hello!, the court held that OK! did not have a property right over the photographs it had purchased, or over the details of the wedding. All it had was a nine-month exclusive licence agreement.

The judgment stated: "The grant to OK! of the right to use the approved photographs was no more than a licence, albeit an exclusive licence, to exploit commercially those photographs for a nine-month period. This licence did not carry with it any right to claim, through assignment or otherwise, the benefit of any other confidential information vested in the Douglases."

Furthermore, it found that Hello! had not intended injury to OK! in publishing its unauthorised snaps - essentially upholding the practice of 'spoilers' in the media industry.

"If the spoiler has no intent to injure, there's no problem," Higdon explains. "The whole issue is a red herring."

But OK!'s lawyers, partner Martin Kramer and consultant Katherine Rimell of Addleshaw Goddard, take a rather different view of matters. "At the moment," says Rimell, "people are asking themselves what is the nature of an exclusive."

Given that OK! is rumoured to have recently paid £1.75m for exclusive pictures from the impending nuptials of model Jordan and her popstar fiancé Peter Andre, the ongoing importance of the issue is not likely to disappear.

The second issue is that of privacy. In November 2000, the Court of Appeal lifted an injunction originally granted banning Hello! from publishing its photographs. In an unusual move, the Court of Appeal last week said that this should not have happened, saying: "The Douglases appeared to have a virtually unanswerable case for contending that publication of the unauthorised photographs would infringe their privacy." As Rimell points out, the court said that an injunction is the only true remedy for a celebrity whose privacy has been breached, given that the average damages award is very small.

Media litigator Caroline Kean of Wiggin & Co says this aspect of last week's judgment could lead to many more injunctions being granted, adding: "Had that ruling been issued two or three weeks ago, I'm fairly certain the Beckhams would have got their injunction." Footballer David Beckham and his wife Victoria recently failed to prevent the News of the World from publishing an interview with their former nanny.

The issues at play in the Douglases' case are unlikely to disappear. OK! is applying for permission to appeal to the House of Lords, further dragging out this long-running case.

Already, legal costs are estimated at £4m, with Higdon and partner Chris Hutchings acting for Hello! on a conditional fee arrangement. The pair brought the case with them from previous firm Charles Russell when they founded M Law a year and a half ago, and have instructed 5 Raymond Buildings' James Price QC throughout.

Meanwhile, Kramer and Rimell have been forced to change counsel three times. They lost first lead Martin Tugendhat QC to the bench; chose Hogarth Chambers' Alastair Wilson QC for the quantum debate; and switched back to 5 Raymond Buildings media specialist Desmond Browne QC for the appeal.

The cult of celebrity will ensure there will be more such cases in the future, as those in the public eye seek to protect their images at all costs.