HELLO! has challenged why it had been ordered to pay more than £1m in damages to a rival celebrity magazine for publishing paparazzi pictures of the wedding of Catherine Zeta-Jones and Michael Douglas.
Hello! admitted the snatched pictures were published as a "spoiler" to lessen the impact of OK! magazine's exclusive £1m contract with the Douglases to cover the New York ceremony.
James Price QC, representing Hello!, told three judges at the Court of Appeal yesterday that "spoilers" were a well-known tactic in the newspaper and magazine industry and his clients had been victims in the past.
He said, "This was something previously not considered unlawful.
"We are in the position that if you are going to compete in this industry you have to publish spoilers. But what happened to Hello! was that it was caught by a law which said 'stop it' retrospectively."
The ruling against Hello! came after a six-week High Court hearing last year at which the Swansea-born 35-year-old actress told how she felt "devastated, shocked and appalled" when she realised unauthorised photographers had gatecrashed her wedding at the Plaza Hotel in November 2000.
The mother-of-two said she and her 59-year-old husband had signed the deal with OK! after turning down a higher offer from Hello!
Mr Justice Lindsay ruled that Hello! had breached the couple's rights of confidence but they had no claim in law for invasion of privacy.
He awarded the couple a total of just £14,600 but OK! got £1,033,156 for what the judge said was commercial damage to its expected exclusive coverage.
Mr Price said the word "spoiler" was a misnomer judging from the evidence given at the High Court hearing.
"One can get a promotional boost from very obviously inferior pictures of an event in a competing publication," he said.
He said that when two daily newspapers ran spoilers on OK! magazine's exclusive coverage of David Beckham's wedding it was found that the unofficial pictures actually boosted sales for OK! by encouraging interest in the story.
Mr Price told Lord Phillips, Master of the Rolls, and Lords Justices Clark and Neuberger that Mr Justice Lindsay found that the Hello! Douglas wedding edition caused OK! to lose 1,400,000 sales.
But the High Court judge had also accepted that a spoilercould have the effect of increasing the sales of a magazine with an exclusive contract, said Mr Price.
Unless the judge had taken into account the impact of unauthorised pictures of the Douglas wedding published in two daily newspapers, then the judge's finding was "manifestly unsustainable", he said.
Mr Price said Hello! was challenging the finding of liability and the amount of the damages award to OK!
If he was successful in his appeal that the High Court was wrong to find there had been a breach of commercial confidence, then the damages award to the Hollywood couple would also fall away.
OK! is challenging an order that it was entitled to only 75% of its legal costs against Hello!
Lawyers have estimated that the total costs of the case so far could amount to £4m.
The hearing, scheduled to last up to five days, continues.