Warner Music UK Limited & Anor v Tunein Inc

This is my judgment arising out of disputes as to disclosure at the second CMC in these proceedings. The proceedings are an inquiry as to damages in a copyright infringement claim in which liability has been determined in favour of the Claimants.

These disputes raise certain points of principle on issues of case management with respect to the disclosure of comparable licences which may be relevant to damages inquiries in copyright infringement cases.

The Claimants are major record companies who brought their claims for themselves and as representatives of 137 other members of their corporate groups. They are the owners or exclusive licensees of the UK copyright in many hundreds of thousands of sound recordings (the “Claimants’ Works”) with an alleged combined market share of UK radio broadcasting revenues of approximately 43%.

The Defendant (“TuneIn”) owns and operates the TuneIn internet radio service (the “Service”). Certain aspects of the Service’s functionality in the UK have been amended or removed since the beginning of the period relevant to the Claimants’ damages claim, but for present purposes the operation and functionality of the Service can be summarised as follows:

By way of context, traditional radio stations (which broadcast using different types of modulation (e.g. FM, AM)) which wish to play recorded music to the public require a licence from the Claimants in relation to the copyright in that recorded music, assuming those rights are within the Claimants’ repertoire. In addition to direct licences from the Claimants, a further source of such licences in the UK is the collecting society Phonographic Performance Limited (“PPL”) which administer a vast number of rights owned by rights holders.

Internet radio stations are now commonplace and include what are known as “simulcasts” and “webcasts” in which an internet signal is received as a stream by the listener. A simulcaster is a traditional radio station which simultaneously transmits its signal to recipients over the internet. A webcaster only transmits its signal over the internet and does not also broadcast by radio waves.

On 1 November 2017, the Claimants issued proceedings against TuneIn for copyright infringement. The Court ordered that there be a split trial as to liability and quantum. In view of the vast number of stations made available by TuneIn, the liability trial was determined by reference to a sample of stations. On 1 November 2019, Birss J (as he then was) handed down his judgment in the liability trial in which it was held that:

Following the liability trial an inquiry as to damages resulting from TuneIn’s infringements of the Claimants’ copyrights was ordered (the “Inquiry”).

TuneIn appealed and, on 26 March 2021, the Court of Appeal ([2021] EWCA Civ 441) upheld the judgment and order consequent upon judgment, save in relation to one aspect of TuneIn’s liability for communication to the public in relation to Licensed Stations by virtue of providing TuneIn Radio Pro to UK users with record function enabled. TuneIn applied for permission to appeal and on 4 April 2022, TuneIn’s application for permission to appeal to the Supreme Court was refused.

At the first CMC, I set down a procedural timetable to take the Inquiry through to trial. Since the first CMC, the Claimants have served a Reply, and the parties have provided Initial Disclosure. The parties have also exchanged competing versions of the Disclosure Review Document (“DRD”) which I discuss further below.

This second CMC was part heard and will resume on 27 November 2023. It has been listed together with an application made by TuneIn for third party disclosure against PPL directly in respect of what are said to be related issues and documents to those considered at this second CMC. The parties agreed at the conclusion of the part-heard hearing that it would be advantageous to receive my judgment on certain disputes raised at the hearing prior to their consideration of the further issues in this case.

In essence, the rival approaches to the damages assessment in the Inquiry are as follows:

The Claimants contend that the appropriate approach to quantum is by reference to the published PPL rates for webcasters, which, they say, reflect their loss and damage based on the user principle as an amount they would have received and/or could have reasonably demanded by way of a licence fee for TuneIn’s infringing conduct. They say these rates would fall to be multiplied by the number of Unlicensed Stations and further multiplied by a percentage to produce a discount which reflects the proportion of the PPL repertoire which consists of the Claimants’ Works (namely 43%).

TuneIn’s case is that a notional willing licensor and licensee would instead negotiate hypothetical licence terms which would be based on either: (i) a percentage of TuneIn’s gross UK advertising and subscription revenue from each Unlicensed Station; or (ii) alternatively, a per-stream rate (or equivalent), resulting in a single licence being agreed in respect of all Unlicensed Stations.

In relation to the making of copies of the Claimants’ Works by UK users of TuneIn Radio Pro, the Claimants contend that the damages should be assessed on a per-copy basis, or alternatively as a percentage of gross revenue from sales of the TuneIn Radio Pro app. TuneIn says that it should be a flat fee or a percentage of UK revenue from purchases of TuneIn Radio Pro.

The parties have variously referred to the concept of comparable licences, both directly and indirectly.

In this regard, TuneIn’s Points of Defence state as follows in support of its primary case (i.e. “share of revenue” as the appropriate basis for assessment):

The Claimants’ Points of Reply plead as follows at paragraph 12:

“As to paragraph 10.3, the Claimants have given disclosure (in advance of the trial on liability and by way of Initial Disclosure in the Inquiry) of the PPL webcast licences, these being the only licences which are relevant to the Inquiry. It is admitted that the Claimants have not otherwise given disclosure of licences of the kind described in paragraph 10.3 (which appear effectively to embrace the entirety of the Claimants’ digital and online licensing activities). There is no obligation on the Claimants to provide such disclosure. There is no allegation in the Points of Claim or the Points of Defence that there is any service comparable to that provided by the Defendant (other than those licensed under the terms of the PPL webcast licences) whose licensing terms are or might be relevant to the assessment of the damages claimed. In particular, the Claimants have not entered into any licence with the operator of an aggregator service such as, or similar to, that operated by the Defendant.”

The parties’ rival positions on the approach to disclosure are supported by the following evidence:

At the hearing before me, TuneIn sought to rely upon the first expert report of Mr. Wynn dated 29 June 2023 to support their submissions on the DRD. The Claimants objected to the report being adduced on the grounds that TuneIn needed permission and no permission had been given. TuneIn sought permission by way of application notice and in a brief ex tempore judgment dated 4 July 2023, I dismissed TuneIn’s application.

The modern principles governing extended disclosure in Practice Direction 57AD are well known and have been helpfully clarified by judgments of Sir Geoffrey Vos in UTB LLC v Sheffield United Limited [2019] EWHC 914 (Ch) at [75] - [79] and McParland & Partners Limited v Whitehead [2020] EWHC 298 (Ch) at [3] - [4], [44] - [54] and [58].

The overarching principles were largely common ground between the parties and for the sake of concision, I do not propose to set out the detail of the Practice Direction, or the judgments to which I refer above.

I would however emphasise certain principles as apposite in this case:

The following issues emerged from the parties' written and oral submissions at this Second CMC, which I shall determine in turn.

A discrete preliminary issue arose at the hearing as to whether it is appropriate for the Court to order the Claimants to disclose documents that are “PPL documents”. The overarching question being that where Model C requests made by TuneIn refer to PPL documents, whether the Claimants’ obligation to search for and disclose those documents should extend to the Claimants obtaining such documents from the third party, PPL.

TuneIn submits that the Court should look at this question in relation to each category of documents in issue and that the correct approach is to make orders for extended disclosure now, as is appropriate, and insofar as the documents are within the Claimants’ control, that disclosure should be given.

I was taken to a number of authorities by Counsel for TuneIn as to the meaning of control and what is said to be the practical application of the test in Lonrho Ltd v Shell Petroleum Co Ltd (No 2) [1982] AC 173, however it would appear that the crux of TuneIn’s submissions (whilst seeking to persuade the Court that the Claimants do indeed have control over PPL) was that the Court should not make any decision now as to what amounts to the Claimants’ having “control” over PPL documents.

Counsel for the Claimants resisted TuneIn’s submissions on the basis it would be wrong to order disclosure of documents which, on the evidence, are not the Claimants’ documents and where there is no evidence that they have control. It was further submitted that the relevant test propounded by Males J (as he then was) in Ardila Investments NV v ENRC NV [2015] EWHC 3761 (Comm) at [10] (that an existing arrangement or understanding, the effect of which is that the party to the litigation from whom disclosure is sought has in practice free access to the documents of the third party) is simply not made out on the evidence.

In my judgment, in line with the preliminary view I expressed at the hearing, it is entirely premature for the Court to make determinations now as to the extent of any “control” one party may or may not exercise as a matter of generality.

In my view, to make a determination now, prior to the parties conducting their searches and providing Disclosure Certificates would amount to prejudging the issue.

It is therefore inappropriate and unnecessary in the circumstances for me to make any determination now as to the extent of control or lack thereof exercised by the Claimants over PPL at this time.

I will deal with the reasonableness and proportionality of the specific requests for disclosure in turn, below.

The agreed formulation of the first issue for disclosure in section 1A of the DRD is as follows:

The parties agreed the proposed model for disclosure should be Model C for both parties. This issue for disclosure is clearly necessary, reasonable and proportionate in that its purpose is to ascertain the number of Unlicensed Stations at issue which will plainly be relevant to the Inquiry. The dispute on this issue arises in relation to the scope of the searches to be conducted on both sides.

The Claimants request:

The Claimants say that in order to identify the Licensed Stations, TuneIn must first identify and provide disclosure of all indexed stations on the Service since 1 November 2011 in the manner outlined.

TuneIn seeks to limit the extent of its search under this issue to certain internal databases; a restriction it says represents an appropriate constraint to ensure that any search is kept within proportionate bounds.

In particular, TuneIn proposes to restrict the scope of its searches as follows:

Counsel for TuneIn relies on Mr. Sherrell’s evidence which describes that the way in which TuneIn’s internal Redshift analytics database operates is that unless and until a station has been listened to by anyone in the UK, TuneIn will not hold information as to whether that station was indexed and available on the Service in the UK (my emphasis).

In reply, Counsel for the Claimants submit that the proposed limitations are inappropriate because:

More generally, the Claimants say that a problem with the constraints suggested by TuneIn is that in order to ascertain when a station was first indexed, one will get a better guide to that from looking at listening activity anywhere in the world, because even if the relevant station was not listened to in the UK, if it is listened to somewhere else on the platform, at an earlier date, then it can be determined that the station was indexed on an earlier date.

In that sense, it is said that any search of listening activity must be conducted not by reference to the UK but listening anywhere, because that way information as to the first index date can be ascertained.

The principal difficulty which arises in the rival contentions outlined above is as a result of the imperfection in the availability or existence of evidence in any single, identifiable source which would indicate the date upon which Unlicensed Stations were made available in the UK.

As mentioned above, it is TuneIn’s position (as evidenced in Mr. Sherrell’s witness statement) that it “does not hold any data recording the date on which a station was first indexed.”

In light of that evidence, the Court is engaged with the task of determining which undisclosed documents in the hands of TuneIn are likely to be relevant and important for the fair resolution of the claim.

In my judgment, neither of the approaches suggested by the parties are likely to represent a reasonable and proportionate approach to disclosure, or indeed one that is fair.

Searches focussed on databases which only indicate when there has been listening activity in the UK do not accord with the findings in the liability trial that TuneIn infringed copyright by communicating the Claimants’ Works to the public in the UK, which does not of course, require those works to have been listened to in the UK, but rather, that the Unlicensed Stations playing the Claimants’ Works were made available in the UK via the Service in such a way that persons may access them, whether or not those persons actually access the works.

However, imposing upon TuneIn an open, unfocussed search for all data and documents, including emails over an extensive period of time (back to 2011) is not reasonable or proportionate in the circumstances and is unlikely to have probative value, particularly in light of specific evidence as to how data is structured, available and accessible to TuneIn.

At this stage of the proceedings and on the basis of present information, I would therefore endorse TuneIn’s proposed constraints to the searches to be conducted under Issue 1 (i.e. data extracted from TuneIn’s MySQL database and Redshift analytics database). Those limitations should properly be moved to section 2 of the DRD.

However, I also accept the Claimants’ submissions that searches of those databases should not be limited merely to listening activity triggered by users in the UK. If and to the extent there is data or documents which indicate the date upon which stations were first listened to in other jurisdictions, that may be useful to the Court (and would be fair to order), particularly if such data is contained within other identifiable databases (or non-UK specific versions of Redshift and MySQL), meaning such a search is unlikely to be disproportionate, unreasonable or indeed, overly costly.

TuneIn has made five numbered requests under this issue, which are as follows:

The first of TuneIn’s requests was agreed by the Claimants on the proviso that TuneIn first supplies the Claimants with a complete list of stations that were indexed on the Service and that the scope of licences to be searched by the Claimants be narrowed to cover licences permitting the simulcasting, webcasting, broadcasting and/or communication to the public (excluding the making available right) of the Claimants’ Works in the UK (my emphasis).

Counsel for TuneIn made the following submissions as to why these requests are appropriate (in summary):

In short, Counsel for the Claimants submits that all (apart from request 1) are wholly disproportionate and that this Issue for Disclosure simply requires knowledge of when and what stations were licensed and the identification of those that are licensed for the UK.

Counsel for the Claimants also refers to the scope of the injunction made at the liability trial, which operates through the provision of a mere list of licensed stations and that this approach is therefore appropriate. It is said that this list includes all of the PPL licensed stations including a list of stations licensed for the UK by CMOs in other territories. The Claimants therefore propose providing a similar historic list (to the extent such information is available).

The order at the liability trial included a direction in the following terms (in material part):

“The parties shall each write to Phonographic Performance Limited (‘PPL’) by 30 January 2020 to request that PPL supply to the parties a list of all Stations that are licensed from time to time by PPL to webcast or simulcast that Claimants’ Works for reception in the UK”

In my judgment, TuneIn has not shown that it is reasonable and proportionate for the Claimants to provide Model C disclosure of documents to the extent and in the manner requested. To accede to TuneIn’s request would result in the search and disclosure of a vast quantity of documents which are insufficiently focussed on the Issue for Disclosure.

That approach does not accord with the Court’s duty to deal with cases expeditiously and at proportionate cost.

I accept the Claimants’ submission that the provision of a list of stations licensed pursuant to requests (1), (2) and (3) represents an appropriate approach to this Model C request which is sufficiently focused in scope, concise and clear.

That approach is consistent with the nature and operation of the injunction which has been in effect for some time. I would therefore direct that requests (1) to (3) are modified to limit the Claimants’ disclosure to the provision of a list of stations licensed by or on behalf of the Claimants for reception in the UK. For the avoidance of doubt, this disclosure is to follow sequentially after TuneIn has given disclosure under Issue 1.

I direct that the Claimants’ suggested limitation on request (1) (i.e. that a list of licences provided should exclude permissions granted with respect to the making available right) be removed.

In my judgment, no cogent reasons have been advanced by the Claimants which justify that restriction and it seems plainly appropriate to make a wider order for extended disclosure which includes reference to this right which is consistent with that which has been infringed by TuneIn.

Requests (4) and (5) do not represent proportionate searches for the Claimants to undertake; they are quite clearly insufficiently focussed on the Issue for Disclosure.

The agreed formulation of Issue 2 of the DRD is as follows:

“What were the PPL rates for webcasters and simulcasters for each calendar year from 1 November 2011 onwards under the Small Webcaster Licence and/or the Band 1 Linear Webcast Licence (as applicable)?”

Both parties rely on PPL rates. As mentioned at [13] above, the Claimants rely on them as the going rate for the licensing of webcasters in the UK. TuneIn relies on them in its Points of Defence (e.g. paragraph 13.2 of the Points of Defence), in which TuneIn relies on an alleged PPL unit rate-per-performance of £0.00058, and other PPL per play rates.

The Claimants (rightly, in my view) submit that any documentation relied upon by TuneIn in support of these alleged rates should have been provided by way of Initial Disclosure and the parties’ correspondence reveals that TuneIn would only agree to the inclusion of this issue in the DRD on the proviso that Issues 2A and 2B are accepted by the Claimants.

The Court will not countenance this approach to the Issues for Disclosure; the parties are expected to cooperate with each other such that the scope of disclosure can be agreed or determined by the Court in the most efficient way possible.

In my judgment, it is clear that this Issue for Disclosure is necessary, reasonable and proportionate and Model B is appropriate for both the Claimants and TuneIn. Tactical horse-trading of this nature will not be tolerated by the Court.

In broad terms, by the inclusion of these proposed Issues for Disclosure, TuneIn seeks the disclosure of comparable licences from the Claimants to inform its position in the Inquiry.

Counsel for TuneIn submits that there are two conceptual bases supporting the inclusion of these issues:

The formulation of the Issues for Disclosure sought by TuneIn are as follows (disclosure is sought from the Claimants only, on a Model C basis):

“Issue 2A: What potentially comparable licences exist in relation to streaming and broadcasting of Cs’ Works which have been entered into by or on behalf of Cs and are those licencees’ services comparable?”

“Issue 2B: “At what rates and on what terms have Cs, their represented group members or agents granted licences of the Cs’ Works permitting acts of communication to the public or reproduction on the Internet?”

In support of the propositions set out above, Counsel for TuneIn advanced the following submissions (in material part):

Counsel for the Claimants resists the inclusion of Issues 2A and 2B in their entirety on the basis that they are not proper issues for disclosure. It is submitted that having regard to the statements of case, these issues are not capable of serving as Issues for Disclosure at all. In short, it is said that if comparables are to be relied upon they must be identified and pleaded.

In developing that submission, Counsel for the Claimants refers to the following authorities as supporting the Claimants’ approach in requiring “comparables” to be specifically articulated on the basis of a pleaded case before disclosure can be properly ordered:

The Claimants take the position that this is not a case in which the Court can consider comparables given the current state of the pleaded cases. It is said that the Court cannot start considering disclosure on this issue because there is no pleaded basis upon which sufficient comparability can be determined.

The Claimants suggest that the correct approach is for TuneIn to plead what it regards as sufficiently comparable services (taken from, for example, the public domain, such as Spotify, amongst others) and that disclosure should then flow from that point.

In my judgment, on the issue of whether Issues 2A and 2B should properly exist as Issues for Disclosure, it is plain that they are indeed “key issues in the dispute” (PD57AD, para 7.3) in the sense that the issues will need to be determined with reference to contemporaneous documents in order for there to be a fair resolution as to the appropriate basis for damages to be assessed in the Inquiry.

Whilst I accept that there is no specific point pleaded in the Points of Claim or the Points of Defence of reliance on a particular service or specific licence(s) (other than the PPL webcaster licences) which are comparable to the acts committed by TuneIn, it is nevertheless appropriate to include these issues as Issues for Disclosure for the following reasons:

I am satisfied that a focused and limited extent of disclosure in relation to Issues 2A and 2B is therefore important for the fair resolution of the inquiry and in my judgment, (subject to what I say below), Extended Disclosure on these issues is necessary, reasonable and proportionate. I agree with TuneIn’s submission that Model C is also appropriate, in light of the large number of documents which could be encompassed within these issues, of which only a small proportion may be relevant or indeed utilised.

However, Model C requests are subject to the requirement that the parties request “particular documents or narrow classes of documents”.

The phrase “potentially comparable licences” in Issue 2A contains inherent uncertainty as to what the responding party is to properly regard as “potentially”, “comparable” when undertaking its searches. Issue 2B refers to “rates and terms” upon which the Claimants have granted licences and is also potentially very wide and/or unclear absent additional clarity.

It is therefore of particular importance in the context of these Issues for Disclosure that the formulation of the Model C requests are focussed in scope and concise.

TuneIn’s requests under Issues 2A and 2B are as follows:

In my judgment, the nature of the requests made by TuneIn under Issues 2A and 2B are far too wide and are inappropriate for a Model C request. The requests are not limited in number, focused in scope or concise. In particular, there has been insufficient focus in constraining the effect of the words “potentially comparable licences” contained within the Issue for Disclosure. The overall effect of the requests is tantamount to a Model D or Model E exercise pursuant to which the Claimants would need to conduct entirely disproportionate searches.

For example, it is not immediately clear why many of these requests for documents would be particularly informative – the requests include within their scope, online music streaming services, online apps or music stores, online platforms, search engines, or social media services “insofar as relates to music” (a term which itself appears open to interpretation and therefore not clear), online music directories or aggregation services.

It is important to have regard to the context of the disclosure exercise and what the Judge in the inquiry will be required to do. As provided in para 2.1 of CPR PD 57AD, disclosure is important in achieving the fair resolution of civil proceedings and the Court will be concerned to ensure that disclosure is directed to the issues in the proceedings and that the scope of disclosure is not wider than is reasonable and proportionate in order to fairly resolve those issues, and specifically the Issues for Disclosure (para 2.4 CPR PD 57AD).

If and to the extent that an analysis of comparable licences is entertained at the Inquiry, there are a number of factors which may be relevant to the assessment of damages:

In light of the above, it would clearly be disproportionate to order that “all” of the Claimants’ licences for the Claimants’ Works be searched and disclosed for the purposes of the Inquiry.

Whilst, as I have found at [78] above, TuneIn does not, at this stage of the proceedings, have to plead specific particulars as to its case on comparable licences in order to obtain extended disclosure, it does however need to properly engage with the requirements of CPR PD 57AD in order to focus the scope of its requests such that they represent clear and narrow classes of documents which are reasonable and proportionate.

At this time, I do not have the necessary information to determine the appropriate scope of requests under Issues 2A and 2B. I therefore direct that the parties liaise on the nature of specific requests that are appropriate under Issues 2A and 2B. If the parties are unable to agree specific requests they shall provide a concise composite document (similar to Section 1B of the DRD) with their respective positions together with short explanations on their points of difference and I will determine the issue accordingly.