Bulletins Story: JUDGE REFUSES TO BOW TO PEER PRESSURE: PEER V EDITORA MUSICAL DE CUBA

Date: 19 December 2006

JUDGE REFUSES TO BOW TO PEER PRESSURE:  PEER v EDITORA MUSICAL DE CUBA

One of the world's leading independent music publishers, Peer Music ("Peer"), has tried and failed to persuade the English court to declare that it is the owner of the entire UK copyrights in thirteen songs composed by six Cuban composers, all of whom are dead.

Peer claimed its rights under original agreements entered into in the 1930s and 1940s with the composers and then under subsequent agreements entered into principally in the late 1990s and early 2000s with their heirs. All of these songs were subject to reversion under the 1911 Copyright Act which provided that rights for the final 25 years of copyright protection reverted to a "composer's legal personal representatives". These representatives were then in a position to assign or deal with those rights. Peer sought a declaration that the recent agreements it had entered into with the heirs of the composers constituted an effective assignment of those final twenty-five years of copyright protection under English law. 

The case was immensely complex and expensive. It involved a number of QCs and junior counsel addressing the court on issues of UK copyright and succession upon death. The issues, though ostensibly concerned just with UK copyright, also involved investigation of Spanish law (on which Cuban law was based) and New York legal principles. This is because the original agreements entered into in the 1930s and 1940s applied Cuban, New York or Mexican law. The English judge was accordingly assisted by eminent Cuban and Spanish jurists. 

The hearing took thirty days spanning a period of eighteen months of which three days were spent by Mr Justice Lindsay hearing evidence in Cuba. Peer had initiated these proceedings in 2000 and preliminary issues of law had been resolved by decisions of other High Court judges and a Court of Appeal determination in 2003. 

The declaration sought by Peer was opposed by Editora Musical De Cuba ("EMC") which the court described as an emanation of the Cuban State.

The meat of the judgment involved a consideration of the law on restraint of trade (and its nearest Spanish equivalent, the law on "Dolus" which involves "insidious machinations" in the words of the Spanish Civil Code 1888) and the law relating to UK succession involving the distinction between beneficiaries and administrators of an estate. 

The judge concluded that there were just too many barriers in the way of Peer's claim for him to grant a declaration in very broad terms. These impediments included, in no particular order, the following:

1. EMC and its predecessors (ie other emanations of the Cuban state) had entered into agreements with the composers or their heirs before the assignments of the reversionary rights to Peer and this intervention gave rise to "substantial difficulties in the way of Peer" establishing that it had acquired the reversionary rights.
   
2. The heirs who had signed the agreements in the late 1990s and early 2000s were not the appropriate legal personal representatives referred to in the reversion provisions of the Copyright Act 1911 and therefore could not clearly grant the reversionary rights to Peer. 
   
3. Peer had no right to be appointed as an administrator of the relevant estates. 
   
4. In the case of one of the songs, the rights were vested in a company that did not appear to be within the Peer Group.
   
5. In a number of agreements there is no clear obligation on Peer to print sheet music or to promote and exploit the work concerned and there were relatively unfettered rights of assignment. These agreements were all drafted long before the decision in Schroeder v Macaulay which altered the shape of publishing agreements. The absence of these provisions in Peer's contracts rendered them vulnerable to attack though limitation laws would provide a shield under New York and English law but not under Spanish law.
   
6. What also snookered Peer was the fact that it sought such a broad declaration of its rights when there were clearly a number of issues and arguments that at best entitled Peer to very tailored and specific declarations. The judge considered that a broad declaration could have a misleading effect.

The judgment did vindicate certain arguments and positions adopted by Peer. These included:

1. EMC had no legal standing to establish that the original agreements were void or could be set aside on the grounds of restraint of trade or the Spanish variant on this, Dolus.
   
2. There were limitation protections for Peer under English and New York law but not under Cuban/Spanish law. 
   
3. Assignments of future copyrights are permissible under Cuban, Mexican, New York or English law.
   
4. No notice had been given by the composers to Peer that Peer was in breach of its original agreements entitling the composers (or their heirs) to terminate them. 
   
5. Laws passed by the Cuban post-Revolutionary government did not invalidate Peer's original agreements with the composers. This position had been upheld by the Court of Appeal in an earlier stage of the proceedings on the basis that any attempted expropriation without compensation would not take effect so far as UK copyright was concerned. 
   
6. There was no deception by Peer or its local lawyer in Cuba in securing signature by the heirs of the original composers to the reversionary related documents.
   
7. The judge would have been receptive to granting rather limited and circumscribed declarations but he had not been invited to do so in an appropriate manner.
   
8. MCPS may still be in a position to pay out certain monies to Peer in relation to these compositions that still have more than 25 years' copyright protection but only until the reversion provisions under the 1911 Act kick in. 
   
9. It would now be too late to terminate the original agreements on the basis of breach because Peer didn't pay royalties or contact the composers before, by its own admission, a period of thirty-eight years following the Revolution.
   
10. The judge found that a number of the witnesses provided by EMC were unreliable and inconsistent in their testimony. He found no evidence of a conscious attempt to deceive by Peer's Cuban lawyer and exonerated her and therefore Peer from such an allegation.

The case has generated political exchanges not often voiced in copyright matters. Ralph Peer  (the founder of Peer) has been painted by his legal representatives as a "connoisseur of Cuban music" whilst EMC's representatives have characterised him as a quasi monopolist "who drove impecunious composers to accept ... terms, sometimes misleading but always ... unconscionably ferocious in Peer's favour ... presented to them on a take it or leave it basis". 

Although the outcome was that the declaration sought by Peer was not granted, the judge did not find Ralph Peer or Peer to have acted in a 'quasi monopolistic' or 'unconscionably ferocious' or 'misleading' way. In some press reports such a spin seems to have been maintained without support from the densely packed and, in parts, highly technical 45 page judgment.

So why all the fuss? One's first assumption might be that these thirteen songs must comprise most of the songs on the Buena Vista Social Club album that sold many millions. However, that is not the case: none of the composers credited on that album composed any of the 13 songs which were the subject of the action. Indeed, it is interesting to note that no publisher is credited on a recently acquired copy of that album.

In fact these 13 songs only generated a modest level of royalties withheld by MCPS in relation to their UK exploitation. Why then would a commercial organisation like Peer throw so much energy and resources at seeking the declaration? The opposition of EMC is perhaps easier to understand in view of the anti-imperialist rhetoric employed by Castro's Cuba after the Americans were thrown out following the Revolution in 1959. Soon after, Peer had to close down its operation in Havana and then, under very strict US legislation, US individuals and corporations were forbidden from paying royalties or having commercial relationships with Cuban nationals based in Cuba. 

The key to why this declaration was sought probably lies in the fact that Peer claims rights in over 600 songs written by Cuban nationals. The judge took the view that any declaration under English law might be used by Peer both as a shield and possibly a sword in relation to claims in any other jurisdictions in which Peer's rights were threatened. If a broad declaration were granted, Peer would be able to point to the neutrality of the English courts and possibly use the declaration internationally. The judge was at pains to emphasise that any declaration given by the English courts would have very limited application and would only cover copyright within the UK.

So if Peer's aim was to secure a broad declaration of its rights which it could then wield in support of its 600 or so copyrights of Cuban origin, the judgment will have been a major disappointment. But, the judge did not castigate Peer in the terms that have been reported in some quarters and that provides at least some small crumbs of comfort.

Julian Turton and Stuart Barry

Music

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