May 2003
Jimi Hendrix gets an account of profits
In 1965 Jimi Hendrix signed a contract with the First Defendant (PPX Enterprises) tying him to produce, play and sing exclusively for PPX for a period of three years. Some disagreement followed and PPX issued proceedings against Hendrix in 1967 based on breach of this contract. Unfortunately Hendrix died in 1970, nevertheless in 1973 the case was settled.
The Claimant was successor to Hendrix's estate and owned most of the rights in his music thereby giving it the right to pursue this claim.
The settlement agreement from the original dispute listed various master copies of music that PPX would continue to be permitted to licence, however further licences or renewals of the original licences would incur royalties to be paid to the Claimant. PPX were also meant to hand over any items that they possessed which weren't listed in the settlement schedule. This did not happen.
Some time later the Claimant decided that it was unhappy with the situation and applied for an injunction preventing them from using the unlicensed materials and also forcing them to hand over materials in their possession. PPX defended on the grounds that by permitting the situation to continue for so long the Claimant had accepted a variation of settlement terms by conduct. The judge disagreed and the injunction was granted.
The Claimant appealed on the basis that they also wanted damages to cover the lost royalties from the years during which PPX had infringed their rights to be decided through an account of PPX's profits.
The judge decided that it would be wrong for PPX to avoid making any payment for the missing royalties, however, it would also be inappropriate for a full account of profits to be ordered (this would also have been time consuming and expensive as it would have involved the close analysis of several years worth of accounts). A "reasonable sum" was to be agreed on.
BRIFFA Comment:
An account of profits enables the winning party in a dispute to establish how much money was gained through whatever it is that the defendant has done wrong to be sued for. Creative accounting can be implemented by the defendant however this remedy sometimes obtains higher damages than a simple damage award.