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 *  News Hello! success as Zeta-Jones ruling overturned

19/05/2005

The Court of Appeals yesterday overturned an award of £1 million granted to OK! magazine after its rival Hello! published unauthorised wedding photographs of Hollywood glamour couple Michael Douglas and Catherine Zeta-Jones.

OK! Magazine had won in 2003 on grounds that Hello! breached rights of commercial confidence when it published the photos. But according to yesterday's ruling, OK! did not actually have a right of commercial confidence in the approved pictures.

This right of commercial confidence remained with the Douglases and had not been transferred to OK! magazine, said the Court.

Background

The celebrity wedding took place in November 2000. The couple sold the exclusive photo rights to the event to OK! magazine for £1 million. But a paparazzo intruder disrupted their plans when he surreptitiously took some rather poor shots of the couple. These were bought for publication in OK!’s rival magazine, Hello!

In April 2003 the High Court ruled that Hello! had breached rights of commercial confidence by publishing the photos, and seven months later awarded £1,033,156 to OK! in respect of the magazine’s commercial losses. The High Court then made only a small award to Zeta-Jones and Michael Douglas.

This amounted to £3,750 each for their distress at the publication of the unauthorised photos, £7,000 for additional costs in having to help OK! bring forward the publication of the authorised pictures, and £50 each under the Data Protection Act.

OK! appealed the ruling, and yesterday a three judge panel at the Court of Appeal upheld it in part, finding that Zeta-Jones and Douglas had a right of confidentiality in respect of the authorised photos, but that OK! did not. The Court also rejected a request by the Douglases to increase their award.

The ruling

The Court was first concerned to stress that the law in this area is undergoing rapid change, egged on by the European Convention on Human Rights. This, and recent European cases, have made it clear that the UK now has an obligation to protect “one individual from an unjustified invasion of private life by another individual” – and that it is down to the UK courts to make this happen.

In the context of private information, such as wedding photographs, the courts have turned to the law of confidentiality for assistance, although as the Master of the Rolls, Lord Phillips, said, when giving the opinion of the Court yesterday:

“We cannot pretend that we find it satisfactory to be required to shoe-horn within the cause of action of breach of confidence claims for publication of unauthorised photographs of a private occasion.”

Nevertheless, the Court found that the unauthorised photographs of the wedding clearly showed aspects of the Douglases’ private life and as such could be subject to the law of confidentiality.

The fact that the Douglases had reached an agreement with OK! to take authorised photos could not be used as a defence by Hello!, as it did not prevent the Douglases from arguing that their wedding was a private affair, said the Court. It might, however, affect the level of damages awarded.

The Court then considered whether the law of confidence could cover the Douglases’ right of commercial interest in information about their wedding.

The answer was yes:

“We can see no reason in principle why equity should not protect the opportunity to profit from confidential information about oneself in the same circumstances that it protects the opportunity to profit from confidential information in the nature of a trade secret.

“Where an individual ('the owner') has at his disposal information which he has created or which was private or personal and to which he can properly deny access to third parties, and he reasonably intends to profit commercially by using or publishing that information, then a third party who is or ought to be aware of these matters and who has knowingly obtained the information without authority will be in breach of duty if he uses or publishes the information to the detriment of the owner”.

However, the Court said that rights in confidential or private information, such as photos of a wedding, which are capable of commercial exploitation but are protected only by the laws of privacy and confidence, are not actually transferable. Nor do they amount to intellectual property rights.

OK! magazine, which had a licence only to publish the authorised photographs – copyright in which was retained by the Douglases – did not have a right to sue Hello! and the £1 million award was therefore withdrawn.

The Court also suggested that a previous ruling, allowing an injunction against the publication of the photos by Hello! to be lifted, had been wrong.

Reactions to the ruling

“The judgment is a resounding win for Hello!" the magazine’s solicitor, Chris Hutchings, told the Independent newspaper. He said that, as a result, Richard Desmond, whose company Northern and Shell is the owner of OK!, "will now have to write a cheque to Hello! for a very large amount of money indeed." It has been suggested that total costs exceed £3 million.

Northern and Shell said that it welcomed the vindication of the Douglases’ case, but warned that the ruling was likely to result in an increase in the number of “spoilers” run by rival publications, seeking to reduce the impact of an exclusive story. It vowed to appeal the judgment to the House of Lords.

See: The ruling (70-page PDF)

See also:

Nominal award for Douglas and Zeta-Jones, OUT-LAW News, 08/11/2003

Zeta-Jones result: Will courts create a privacy law?, OUT-LAW News, 14/04/2003

© Pinsent Masons 2000 - 2005

 
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