Panayiotou v Sony Music Entertainment (UK) Ltd.
Panayiotou and others v Sony Music Entertainment (UK) Ltd. ([1994] ChD 142) was a contract and entertainment law case before the High Court of Justice's Chancery Division. The plaintiff, entertainer George Michael, argued that his recording contract constituted an unreasonable restraint of trade. Michael alleged that the defendant had failed to promote his album Listen Without Prejudice Vol. 1 with due vigour as punishment when the artist decided to downplay his status as a sex symbol. Michael described his situation as "professional slavery" because his contract required that he produce music and cede the copyright to Sony for many years, leaving him no control over how the music would be marketed nor placing a reciprocal requirement that the label invest in promotion. Had the case succeeded, it might have curtailed the practice of signing artists to multi-album contracts. The court wholly rejected the claims.
Background
Georgios Panayiotou, known professionally as George Michael, signed with
It was common practice in the recording industry to sign many emerging artists like Wham!, banking that long-term profits from the few commercial successes would cover the losses from promoting the remainder. A decision holding Michael's contract unenforceable could have dramatically reduced the expected return on investment for signing and promoting an emerging artist, leading to fears that the practice would end. Michael argued that the structure of the industry concentrated power in too few hands, and that these companies competed by selling music, but not in the terms offered to new artists. This led to an imbalance of power, where the artist was contractually obligated to produce a set number of albums of acceptable quality and cede copyright to the label, but the label did not bear a reciprocal obligation to market and promote the product, in accordance with the artist's wishes or otherwise.[1][2][5]
Michael was advanced a sum of £1 million in February 1992 under the terms of the 1990 contract. This amount was returned to Sony in August of the same year in preparation for filing suit in October.[1][6]
Decision
Michael filed suit before the
- the case was indeed such that the doctrine of restraint of trade would be applicable;
- the 1984 agreement was a compromise in good faith and the conditions obtained there would pertain to all subsequent renegotiations: there is a legitimate public interest in upholding such a compromise, and the suit fails at the initial hurdle;
- leaving aside the origin of the 1988 agreement, its provisions were justifiable: the label has a legitimate and enforceable recoupment interest in an exclusive contract of some duration;
- restraint of trade under Article 85 of the Treaty of Rome establishing the European Community concerns trade between member states, and was held not to apply; Article 222 governing property ownership, including intellectual property, would have superseded in any case;
- by activating its terms in requesting an advance in 1992, Michael affirmed the 1988 agreement.[1][6]
In July 1995, Sony sold the contract to rival record companies Virgin Records and DreamWorks Records. Virgin granted worldwide rights when DreamWorks granted rights in the U.S. and Canada. All releases for these labels were co-labeled with Aegean Records, a record company owned by George Michael. He, eventually, returned to Sony Music in 2004, on which he released his final studio album, Patience. Additionally, in 2011, all his catalogue for Virgin and DreamWorks were reissued on Sony.
References
- ^ .
- ^ a b Ipsen, Erik (19 October 1993). "Sony Suit Plays High Court". New York Times. Retrieved 28 January 2012.
- ^ a b c Smith, Giles (22 June 1994). "'Pop slave' George Michael to fight on". The Independent. Archived from the original on 24 May 2022. Retrieved 28 January 2012.
- ^ a b Stevenson, Richard W. (22 June 1994). "George Michael Loses Lawsuit Against Sony". New York Times. Retrieved 28 January 2012.
- ^ a b Lister, David (19 October 1993). "George Michael and Sony face the music: Rock star's High Court contract case could shake the recording industry to its foundations". The Independent. Archived from the original on 24 May 2022. Retrieved 28 January 2012.
- ^ a b Tan, Ying Hui (24 June 1994). "Law Report: Recording agreement enforceable: Panayiotou and others v Sony Music Entertainment (UK) Ltd – Chancery Division (Mr Justice Jonathan Parker), 1 June 1994". The Independent. Archived from the original on 24 May 2022. Retrieved 28 January 2012.
- Nordenfelt v Maxim, Nordenfelt Guns and Ammunition Co Ltd and in contrast to ZTT v Holly Johnson.