Anna Caddick argues that if their Lordships allow OK!’s appeal, the law of commercial confidence will be stretched beyond recognition
Douglas v Hello! and the status of ‘exclusives’
should English law protect image rights?
Almost six years to the day since the wedding of Catherine Zeta-Jones and Michael Douglas, the case of Douglas v Hello! took centre stage again on 20 November 2006 in the House of Lords. The Douglases are not involved in the
appeal, brought solely by OK! against an unanimous Court of Appeal in favour of Hello!, Douglas v Hello! Ltd [2005] EWCA Civ 595, [2005] 4 All ER 128. It is the ultimate battle of two highly successful publishing houses over whether ‘exclusives’ are really exclusive; and which party bears the costs of six years’ legal warfare.
Background
Zeta-Jones and Douglas were married in the New York Plaza Hotel on 18 November 2000. Their marriage generated a considerable amount of interest among press and public alike. The couple contracted with OK! for £1m to grant the exclusive right to publish an article and a wide selection of official photographs—such photographs to be selected by the couple themselves from the full portfolio. The wedding was shrouded in heavy security and guests were not permitted to take photographs or ‘make extended comments’ to the media. A paparazzo unconnected with Hello! managed to evade the security to take a few bad quality photographs. How the paparazzo actually achieved this has never come to light. The photographs showed nothing more than the official photographs, but the couple felt some of them to be unattractive: for instance one captured the bride scandalously eating wedding cake. They were offered to Hello!, which bought the right to publish six of them for £125,000.
When the Douglases and OK! discovered what had happened, they sought and were granted an immediate prohibitory injunction against Hello!: this was overturned by the Court of Appeal in Douglas v Hello! Ltd [2001] QB 967, [2001] 2 All ER 289.
Trial—February 2003
Mr Justice Lindsay found that the Douglases were entitled to a perpetual injunction against Hello! and damages of £3,750 each for the distress and damage suffered as a result of the infiltration of their private reception, and in addition £7,000 for their wasted costs. OK! was awarded in excess of £1m damages against Hello! for breach of a trade secret type confidence.
Court of Appeal—December 2004
The Court of Appeal (Lord Phillips MR, Lord Justice Clarke and Lord Justice Neuberger) while upholding the Douglases relief, overturned OK!’s judgment.
The Court of Appeal concluded that the contract between the Douglases and OK! did not give OK! a remedy for the publication of unauthorised photographs as opposed to authorised ones. The unauthorised photos were part of the private domain that the Douglases retained. OK!’s claim was thus at odds with the Douglases rights.
House of Lords—November 2006
In the House of Lords, OK! submitted that the Court of Appeal adopted an inappropriate proprietary analysis. OK! argued that it shared with the Douglases a commercial confidence in all visual elements of the wedding. The Douglases were obliged under the contract to use their best endeavours to preserve the confidentiality of the event and that shared confidence was necessary for OK! to extract the full commercial value of its scoop.
Following the lifting of the injunction, the relevant editions of Hello! and OK! were published on the same day. Under well
established principles, commercial confidence is lost once it enters the public domain: relief is thereafter unavailable—unless it can be shown that a person gained an illegitimate short-term advantage by virtue of the breach, a ‘springboard’ situation (see Bullivant (Roger) Ltd v Ellis [1987] FSR 172, [1987] IRLR 491). The Court of Appeal in Douglas v Hello! accepted that the public domain rule might not apply to photographs and that the protection of the law of confidence might continue until there was no commercial value left in them. This proposition subverts the law of confidence as it was hitherto understood. For instance, in Shelley Films Ltd v Rex Features Ltd [1994] EMLR 134 photographs were taken of parts of a film set in breach of confidence—the injunction granted could not have been
continued until the film ended its run.
In the context of privacy, the Court of Appeal in Douglas v Hello! said that each “fresh publication” of a photograph is a “fresh intrusion into privacy” and can be injuncted despite being in the public domain. This is because photographs can have a peculiar impact on a person’s privacy. However, to allow this reasoning to apply to commercial confidences is a result of the confusion caused by ‘shoe-horning’ privacy interests into the law of commercial confidence. Counsel for Hello! submitted that their Lordships should finally establish that the two are separate causes of action; and it is hoped that this opportunity is taken.
To counter the public domain problem in the House of Lords, OK! argued that albeit that the information revealed by the authorised photos became public on publication by OK!, the precise information revealed by Hello!’s photographs remained confidential and hence they were published in breach of confidence.
Did OK! share a confidence in the wedding?
In the contract, the Douglases carved out a small amount of the private sphere of their wedding for use by OK!. OK!’s scoop was the exclusive licence for nine months to publish selected, authorised photographs of the wedding. But OK!’s rights did not go beyond the terms of this licence, and clause 10 of the contract provided that any rights not specifically granted to OK! were reserved to the Douglases. OK! could not take photographs itself, it was not entitled to see all of the photographs taken, nor did it have any say in which photographs it could print.
Under California law which governed the contract, OK!, as the exclusive licensee of the Douglases publicity right, would have been in a position to sue a third party who intercepted and tried to print the
actual authorised photographs during the nine-month period. Under English law, the same position might have been achieved by virtue of the Copyright Designs and Patents Act 1988, s 101(1) and, depending on the circumstances, it is likely that an action for breach of confidence would have been available. However, under the contract as interpreted in accordance with California law, OK! could not sue a third party who printed unauthorised photographs. The contract did not envisage the possibility of unauthorised photographs being taken at all. If OK! had printed unauthorised photographs, it would have done so in breach of contract.
In such circumstances, it is difficult to see how the “sharing” arose when it was the Douglases residual area of privacy, which OK! did not have access to, which was invaded. A useful analogy is as follows. X writes a book. Y sees it in confidence and agrees to publish it. In the meantime, Z gets hold of and publishes X’s research notes, in full knowledge of X’s contract with Y. Y, who has never seen these notes before, cannot sue Z for breach of the confidence, although it is likely it could have done so had Z published extracts from the actual book in advance of the launch date.
Can confidentiality survive publication?
It was held as a fact at trial that the photographs printed by Hello! did not show any features, such as the wedding dress and cake, which were not equally comprehensively portrayed by the official photographs. What the unauthorised photographs did show were unposed shots, such as Zeta-Jones playfully holding the cake knife up to her husband and another with Douglas feeding her wedding cake. These are all features which may impact on a person’s privacy and it has now been determined definitively under English law—Hello! was not given leave to appeal on this—that a person’s right to protection of their private sphere may survive partial commercialisation. However, the relevance of such differences to the law of commercial confidence must be questioned. These additional elements are trivialities, albeit ones that the media will pay a lot of money for, and the law of confidence traditionally sets its face against the protection of trivial matters. It comes to this: if we recognise each smile and pose of a celebrity as a separate (and potentially) commercially confidential item, have we not created an image right?
Should English law protect image rights?
“In this country we do not recognise a right to one’s own image…” (see Campbell v MGN Ltd [2004] UKHL 22, [2004] 2 All ER 995, per Baroness Hale). However, the Court of Appeal in Douglas v Hello! said:
“We can see no reason in principle why equity should not protect the opportunity to profit from confidential information about oneself…Recognition of the right of a
celebrity to make money out of publicising private information about himself, including his photographs on a private occasion, breaks new ground.”
This author argues against this approach and agrees with Professor Cornish who has talked disparagingly of the “American
devotion to the cause of conferring property rights upon value-generating activity, whatever its form” (see Intellectual Property—Patents, Copyright, Trade Marks and Allied Rights, 5th edition, paras 8–60,
William Cornish and David Llewelyn).
The protection of private information is centered around human autonomy and dignitary interests. Article 8 and the ensuing European Convention on Human Rights jurisprudence do not impose any obligation to protect commercial interests that may result. What we are in danger of doing in English law is welcoming in an image right of sorts without properly debating its social value or considering its limits.
Economic torts in Lords
Douglas v Hello! was listed with two other appeals (see OBG Ltd v Allan [2005] EWCA Civ 106, [2005] 2 All ER 602 and Mainstream Properties Ltd v Young [2005] EWCA Civ 861, [2005] All ER (D) 148 (Jul)) which were heard on consecutive weeks before the same panel (Lords Nicholls, Walker, Brown, Hoffmann and Baroness Hale). The common issue in all three cases is the exact nature of the mental element in economic torts—a notoriously complicated area devoid of much clear judicial analysis. OK!’s alternative cause of action is the tort of unlawful interference with business interests. OK! argues that it is sufficient if Hello!’s conduct was aimed at OK! and Hello! knew that OK! might suffer economic harm as a necessary consequence of that conduct. At trial it was held that the requisite intention was not present, because there was no intention to injure at all. Lindsay J found that Eduardo Sanchez Junco, the editor of Hello!, had acted out of self-interest to preserve Hello!’s readership and did not believe that a so-called “spoiler” of this type would necessarily cause damage to OK!—it might in fact whet the public’s appetite.
Counsel for Hello! further submitted to their Lordships that a breach of privacy interests was an inappropriate “unlawful means”: the economic tort would otherwise effectively subvert the personal nature of
privacy interests.
Impact of the case
The case impacts on whether celebrities enjoy a commercial commodity in their private information which can be the subject of contract. The media looks on with interest; so too the British public—this will affect how celebrities can manipulate the image they present to the world. The hypocrisy of OK!’s claim does not go unnoticed. Hello! demonstrated in evidence at trial that the proverbial shoe had often been on the other foot when it came to exclusives. Indeed counsel for Hello! showed their Lordships that OK! that week had published a ‘fake’ exclusive of the Tom Cruise/Katie Holmes wedding.
Anna Caddick is a qualified solicitor specialising in intellectual property and media law and currently a pupil-barrister at Hogarth Chambers: ACaddick@hogarthchambers.com
The judgment is expected in late February
