Litigation Recent Decisions 16/6/98

Comedy team wins dispute over licensing agreements

Python (Monty) Pictures Ltd v Paragon Entertainment Corporation & Anor (1998)

Ch.D (Rattee J) 21/5/98

Action in respect of rights to the film "The Life of Brian". The members of the Monty Python comedy team who wrote the film assigned their copyright to Python, a company owned by the team. Python made a production agreement with Handmade Films Ltd ("Handmade') and a distribution agreement with Handmade and a Panamanian company ("EuroAtlantic'). The distribution agreement included a covenant that all Python's rights under the production agreement would be incorporated in all distribution and other agreements made for the exploitation of the film by EuroAtlantic. There was particular reference in both agreements to a provision restricting cutting of the film. At the same time a "principal side letter' was signed on behalf of all three parties, which provided inter alia, in cl.3, for the termination of distribution rights if restrictions on cutting and editing were not included in agreements for the exploitation of the film. In June 1979 EuroAtlantic sold the benefit of its rights under the distribution agreement to an associated company ("Ganga'). In August 1994 Python consented to the assignment of rights under the production and distribution agreements to the first defendant, Paragon, subject to Paragon's assumption of all obligations previously imposed on Handmade, EuroAtlantic and Ganga. Nobody at Paragon knew of the terms of the principal side letter. A number of licences to show the film were granted, including one in 1984 to the second defendant, Channel 4 (C4), and one in August 1994 by Paragon to a Russian company,("Premier'). In 1995, by a further licence, C4 was granted rights in respect of the television broadcast of the film. None of these licences included the restriction on cutting. When Python's representatives learnt in late July 1996 about a proposed screening of the film on 1 August 1996 they started to uncover details of the 1995 licence and objected to its terms. Having discovered the faults in the earlier licences, Python issued a writ in this action on 28 October 1996. Their primary claim was for a declaration that all Paragon's rights under the production and distribution agreements terminated on 29 August 1994 by virtue of the grant of the licence to Premier. They also claimed for breach of contract and damages or an account of profits in respect of breach of copyright on the basis that Paragon had dealt with the film since its rights under the production and distribution agreements had terminated. Python also claimed a declaration that C4 knowingly induced a breach of the production agreement with Paragon or alternatively a declaration that the 1996 C4 licence was ineffective. They also claimed damages or an account of profits in respect of breach of copyright by C4.