Lynn Chadwick, one of the leading British sculptors of post-war Britain, has recently been the subject of a High Court dispute over the ownership and copyright of his work. This case is a practical illustration of the issues concerning ownership of artwork and copyright where an artist creates a company to own the physical works and the copyright but where there is no written agreement transferring the title of either.
In 1972, Mr Chadwick was advised to incorporate a company, Lypiatt Studio Limited (previously Lypiatt Foundry Limited), for tax efficiency purposes.
In his will, Mr Chadwick left two of his shares in the company to his wife, Eva, giving her a controlling interest in the company. Whilst his possessions were divided amongst his family, the will was silent as to any reference to his artworks or the copyright in them. One of Mr Chadwicks’s daughters disputed whether the company held the legal and equitable title to Mr Chadwick’s artwork and copyright.
Mr Chadwick’s executors sought:
(1) a declaration as to the ownership of the legal or equitable title to the artworks created by Mr Chadwick and the copyright therein; and
(2) an order for the executors to vest or assign any legal rights from Mr Chadwick’s estate to the company according to the Court’s findings.
The judge held that, on the evidence provided by Mr Chadwick’s accountant at the time and his wife Eva, it was clear that Mr Chadwick had intended to transfer all his artworks to the company he was forming and accordingly it was the company which owned both the legal and equitable title to the physical works of art as there was no requirement for any formal transfer of personal property. This was further supported by the company’s accounts and its actual dealing with the artworks, thereby confirming that the company had effectively taken possession of the physical artworks. Accordingly, all Mr Chadwick’s artworks created prior to the time the company started trading, belonged to the company.
However, there was no written assignment to the company of the copyright in these works. There is a requirement under the Copyright Act 1956 (and indeed also the Copyright Act 1988) that any legal assignment of copyright must be in writing. The legal title to the copyright in the works of art was therefore held by the executors of Mr Chadwick’s estate. The question to be decided was therefore who owned the equitable title? There is no requirement for the creation of a beneficial interest in copyright to be in writing. An agreement to assign copyright could therefore be via an express oral agreement or implied by conduct. In this case, the company’s Board Minutes dealt with the casting of works, and licences to reproduce images of works was given by the company and not by Mr Chadwick. It was therefore held that there was sufficient evidence supported by subsequent conduct of an intention to assign the copyright which created an equitable assignment of it. Once established that the company held the beneficial interest in the copyright, it was then entitled to require that the executors assign the legal title to it.
Once the company began trading, the central issue to consider was whether Mr Chadwick was an employee of the company or not. Any works (and the copyright therein) created in the course of employment are legally and beneficially owned by the company and not the employee unless there is an agreement to the contrary. National insurance contributions, board meetings referencing Mr Chadwick’s employment, and pension schemes were used as evidence to support the employer-employee relationship and it was therefore held that, as Mr Chadwick was its employee, the company was therefore the first owner of the works and the copyright in them after the company commenced trading.
Even without a written or express assignment of copyright, the court was prepared to find an equitable assignment due to the volume of evidence suggesting a clear intention to transfer ownership. This case provides an insight into the types of supporting documents that may be used as evidence in a dispute of this kind. If you are an artist, writer or creative considering the benefits of a corporate structure, please get in touch with one of our team to ensure proper transfer of title.