Chadwick v Lypiatt: written assignments of IP rights

The requirement under UK law that most assignments of ownership should be in writing often means that which is intended by the author of the unregistered intellectual property is not reflected at law. The position is sometimes further confused by whether he/she is an employee.

In Chadwick & Ors v Lypiatt Studio Ltd & Anor [2018] EWHC 1986, the English High Court has revisited the principles which apply in such circumstances.

Mr Chadwick was a leading British sculptor. In 1973 he established a company, Lypiatt Studio, to manage his artwork. There was no formal assignment of the copyright in his artwork or an employment contract. Mr Chadwick died in 2003, with the majority shareholding in Lypiatt Studio Ltd going to his wife.

One of Mr Chadwick’s children, Sophie Chadwick, subsequently contested whether Lypiatt Studio owned the legal and beneficial title to the copyright in Mr Chadwick’s works. The issue fell to be determined by the English High Court.

Richard Spearman QC, sitting as Deputy Judge, held as follows:

• Lypiatt Studio owned the equitable (but not legal) title of the copyright in the works created by Mr Chadwick up to the date Lypiatt Studio started trading. As such Lypiatt Studio was entitled to call on Mr Chadwick’s successors in title to assign the legal title; and
• Lypiatt Studio owned the legal and equitable title of the copyright in the works created by Mr Chadwick after the date Lypiatt Studio started trading as he was considered to be an employee (and, therefore, ownership of the copyright automatically accrued with Lypiatt Studio).

With regard to the former, the judge reasoned that the legal title to the copyright in the artworks vested with Mr Chadwick’s successors in title because there was no written copyright assignment from Mr Chadwick to the Lypiatt Studio.

However, he held that the evidence showed that there was an agreement to assign the legal title in the copyright. In doing so, the judge relied on: witness statements; minutes of Lypiatt Studio’s board meetings which decided on the casting of the works; the absence of a licence and royalty payments; and the fact that Lypiatt Studio consented to the reproduction or use of images, not Mr Chadwick.

It is established law that there is no requirement for an assignment of the beneficial interest in copyright to be in writing (see, for example, Lakeview Computers plc v Steadman). Therefore the agreement to assign was sufficient to assign the beneficial interest. As the successors in title held the legal title on trust for Lypiatt Studio, the latter could call for the assignment of the legal title.

With regard to the works created after Lypiatt Studio started trading, the judge found that, despite the absence of an employment contract, Mr Chadwick was, in fact, an employee. In doing so, he relied on, among other things: the fact that Mr Chadwick's equipment was provided by Lypiatt Studio; the payments of tax and national insurance were consistent with an employment relationship; Lypiatt Studio’s pension scheme referred to Mr Chadwick as an employee; and, on occasion, the board minutes referred to Mr Chadwick as an employee.

While ultimately the court gave effect to Mr Chadwick and Lypiatt Studio’s intentions regarding the ownership of the copyright, the case serves as a reminder to those transferring intellectual property that a written assignment, which is cost effective to produce, can save considerable confusion and, in some instances, the time and cost of having recourse to the courts.