High Court finds that Eminem’s first record company owned the copyright in the sound recordings on his first album, but the distribution company defendants were not liable for secondary infringement

Marshall Bruce Mathers III, better known as Eminem, became very famous after the release of his second album in 1999. This case concerned his lesser known and less successful first album entitled “Infinite”, recorded in 1996.

The claimant, FBT Productions Ltd, is a record company based in Detroit. It claimed ownership of the copyright in the sound recordings on Infinite and alleged that the copyright had been infringed by the defendants, Let Them Eat Vinyl Distribution Ltd (LTEV) and Plastic Head Music Distribution Ltd, which were related companies, the first being a record company, and the second being a distribution company.

It was not in dispute that LTEV had made vinyl copies of Infinite and supplied them to Plastic Head, who then sold them from a source in Massachusetts.

The issues were whether FBT owned the copyright and whether, if there was no licence granted by FBT to the defendants, whether Plastic Head knew or had reason to believe that the vinyl copies of Infinite which it sold, and the CD copies which it imported and sold, were infringing copies of the sound recording of Infinite.

Since 1980 the brothers Mark and Jeff Bass had run a recording studio in Detroit known as FBT (Funky Bass Team), trading as FBT Productions. FBT signed a recording contract with Eminem in 1995 and released Infinite in 1996.

In 1998, Eminem and the Bass Brothers signed an agreement with Aftermath Entertainment, a division of Universal Music, pursuant to which Eminem recorded for Aftermath instead of the Bass Brothers.

In 2000 FBT was incorporated. FBT said that under a written agreement dated 19 April 2000, the Bass Brothers assigned all their rights, including the copyright in the sound recording of Infinite, to FBT.

By 2013 a CD version of Infinite was circulating in Europe, distributed by a German company called Intergroove Tonträger-Vertriebs. Intergroove had obtained the CDs from Boogie Up Productions in Massachusetts.

Intergroove ceased trading in 2013 and Boogie Up approached Plastic Head suggesting that it could take up where Intergroove had left off. In August 2013, Plastic Head signed a distribution agreement with Boogie Up to distribute CDs throughout the world, excluding North and South America and Russia. A CD version of Infinite was among the Boogie Up CDs distributed by Plastic Head.

In October 2014 the defendants were advised that Boogie Up had acquired the right to license the making of vinyl format copies of certain recordings, including Infinite. The defendants approached the Mechanical Copyright Protection Society for a licence. MCPS said that it had no mandate in relation to Infinite and that therefore it was not possible to grant a licence. Notwithstanding this, MCPS approved the manufacture of a maximum of 2,931 vinyl copies. 2,891 copies were made by LTEV, all of which were supplied to and distributed by Plastic Head. Distribution of the vinyl copies continued until 9 October 2016.

FBT issued proceedings for copyright infringement.

Copyright ownership

The evidence was that in 1995 the Bass Brothers were a partnership, rather than a company, trading as FBT Productions. His Honour Judge Hacon found, therefore, that the recording contract signed in 1995 was between Eminem and the Bass Brothers partnership.

The 1998 agreement between FBT and Aftermath stated: “FBT hereby irrevocably sells, transfers and assigns to Aftermath all right, title and interest in and to the Master Recordings listed in Schedule 1 … featuring [Eminem’s] performances which were recorded prior to the [date of the agreement]”. Schedule 1 was blank.

HHJ Hacon rejected the defendants’ argument that the reason Schedule 1 was blank was because there had been an incomplete disclosure of documents by FBT and that other documents would reveal that Infinite either was, or should have been, listed in Schedule 1 and thus assigned to Aftermath. The agreement also stated clearly that FBT was providing to Aftermath “the exclusive recording services of … ‘Eminem’ …”.

Therefore, HHJ Hacon said, the purpose of the agreement was to transfer the recording services of Eminem from the Bass Brothers partnership to Aftermath. It was not to assign copyright in sound recordings. The 1998 Agreement did no more than allow for the possibility of an assignment of copyright in earlier recordings. If this was to be done, they would have been listed in Schedule 1. In HHJ Hacon’s view, Schedule 1 was blank because there was no agreement to assign copyright in earlier recordings.

Therefore, FBT was the owner of the copyright in question.

Secondary infringement

It was not in dispute that if FBT owned the copyright in question, LTEV was liable for primary infringement by making vinyl copies of Infinite. However, distribution of the vinyl and the Infinite CDs by Plastic Head could only be secondary infringements if contrary to s 23 of the Copyright, Designs and Patents Act 1988.

The issue was whether Plastic Head (more specifically whether Stephen Beatty, who owned LTEV and was a shareholder in Plastic Head) knew or had reason to believe that the vinyl and CD copies of Infinite sold by Plastic Head were infringing articles.

The defendants argued that before any of the vinyl copies of the album were made, Mr Beatty had approached MCPS for a licence. This was the act of a man who wanted to ensure that his companies had obtained the necessary rights.

They also said that the sleeve of the vinyl album provided LTEV’s full name, address, telephone number and website address. It also stated that it was manufactured and distributed by Plastic Head and said that it had been made under licence from Boogie Up Productions. This was not the behaviour of a man who believed he was dealing in unlicensed “bootleg” albums.

In addition, they said that the CDs of the album had been sold for some time by Intergroove, apparently without complaint, and both vinyl and CD versions were advertised openly by Plastic Head. Further, Mr Beatty had a substantial business in lawfully selling albums and would not risk his reputation by selling bootlegs.

Finally, Mr Beatty’s response to FTB’s complaint was the rapid and appropriate response of a man who honestly believed that he was selling licensed albums. Sales were promptly withdrawn.

HHJ Hacon broadly agreed and found these arguments more compelling than FTB’s responses. Accordingly, he found that Mr Beatty neither knew nor had reason to believe that the vinyl and CD copies of Infinite sold by Plastic Head were infringing copies of another party’s copyright work.

In conclusion, HHJ Hacon held that LTEV had infringed the copyright by creating vinyl copies of the Infinite album. However, neither of the defendants was liable for any of the secondary acts of infringement pleaded, namely importing, offering for sale and selling copies of the Infinite album. (FBT Productions LLC v Let Them Eat Vinyl Distribution Ltd [2019] EWHC 829 (IPEC) (2 April 2019) — to read the judgment in full, click here).