The United Kingdom Supreme Court (“UKSC”) yesterday delivered its much anticipated judgment in Lucasfilm v Ainsworth. The ruling confirms that the English Courts have jurisdiction to determine whether foreign copyright has been infringed. This paves the way for foreign claimants to bring proceedings in the UK against British nationals for acts of infringement committed outside the European Union in breach of the copyright law of that country.
Mr Ainsworth had been hired by Lucasfilm to produce the now famous stormtroopers helmets for the first Star Wars films. He retained the moulds and later sold copies of the helmets from his website. Some of the helmets were sold in the United States, and in 2006 a US Court held that Mr Ainsworth was liable for infringement of Lucasfilm’s copyright and awarded Lucasfilm damages of $20m. Lucasfilm then attempted to enforce that decision against Ainsworth in England, whilst also claiming that Mr Ainsworth had infringed copyright under English law. The High Court dismissed the latter claim on the ground that the helmets did not constitute artistic works under English law and were therefore not protected by copyright at all. The Judge did, however, rule that the English courts do have jurisdiction to enforce foreign copyright in respect of infringement which took place in another country.
The Court of Appeal subsequently affirmed that the helmets were not artistic works under English law, but overturned the Judge’s decision that non-EU copyright might be enforceable. The Court of Appeal considered copyright to be a largely national issue, and that if one country’s court tried to enforce another country’s copyright law this could result in a policy clash. Finally, the Court affirmed that the US judgment could not be enforced against Mr Ainsworth because his website was not sufficient to establish his presence in the United States.
The UKSC’s Ruling
The UKSC agreed with the Court of Appeal that the helmets were not artistic works as their purpose was primarily utilitarian, namely as props for the film. However, the UKSC held that an action based on US copyright can be considered by the English Courts thereby overturning the Court of Appeal’s decision on this issue. The judgment is grounded both in policy and in law. From a policy perspective, the judgment refers to the Brussels I and Rome II Regulations as evidence of an absence of any “substantial policy reason” why an English court could not enforce foreign intellectual property rights.
As regards English law, the UKSC acknowledged the rule in British South Africa Co v Companhia de Mocambique and Potter v Broken Hill Pty Co Ltd that an English court does not have jurisdiction to determine issues as to the title or right to foreign property. However, the UKSC said this rule should not be extended to the issue of infringement of those property rights where the subsistence of the rights has already been established. As a result, provided personal jurisdiction can be established over the defendant, a claim for the infringement of a foreign copyright is justiciable by the English courts even in the absence of any act of infringement in the UK or under UK law.
Implications of the Judgment
The UKSC judgment means that owners of foreign copyright will be able to sue individuals based in the United Kingdom if their national copyright is infringed. The decision is highly significant given the global reach of the internet, which gives UK users access to material from all over the world. The media industry has perhaps the most reason to be happy with the decision as it could lead to more actions in the English Court for online piracy. Another implication of the decision could be increased litigation in the English courts by IP owners in states with weaker IP enforcement. However, this is likely to be tempered by the high cost of litigating in the UK courts. The UKSC’s decision indicates a clear intention to move away from the traditional ‘localised’ perception of IP rights. It remains to be seen whether this will lead to greater forum-shopping and IP policy clashes as was feared by the Court of Appeal. It also leaves open the question of how the UK courts will determine what relief is appropriate for infringement of foreign IP rights, particularly in light of the original $20m damages award made by the US court in this case.