The Sex Pistols are no strangers to being headline news but after a ruling in August they have been brought back into the limelight\u2026 this time not for their outrageous antics, but over licencing rights to their music.<\/p>\n
A new TV drama is set to hit our screens next year which will detail the life and music of The Sex Pistols. But it is this TV Drama that has caused the former band members to take their argument to the High Court.<\/p>\n
John Lydon, formerly known as Johnny Rotten, has sought to prevent former band members Paul Cook and Steve Jones from allowing the band\u2019s music to be used in the upcoming TV drama.<\/p>\n
Lydon\u2019s main argument was based on the Band Members Agreement which was entered into by the band in the late 90s. Lydon believed that the obligations set out in this agreement relating to the use of intellectual property was not binding as it had not been relied on in the past.<\/p>\n
However, Cook and Jones argued that as Lydon had voluntarily entered into and signed the agreement, the obligations and the majority decision overruling the minority, a crucial part of the agreement, was enforceable.<\/p>\n
The reason the Band Members Agreement is so vital in this case is that it gave important and specific protection to the band members. It \u2013 presumably, although no copy of the document appears to have been provided to the public – provided a limitation on the rights of any one band member in connection to the Intellectual Property rights it covered. As result, the decision of the majority \u2013 to permit the use of the music \u2013 was binding.<\/p>\n
It is an implied term of the Band Members Agreement that the parties were obliged to consent and execute all licences necessary to give effect to the decisions made by the majority over the minority. As Sir Anthony Mann stated, Lydon was advised by a registered UK solicitor, a US attorney and a manager when signing this agreement and therefore would have been advised what the specific clause meant. Even thought Lydon was the bands songwriter, the music and intellectual property was owned by the band, and so meant that Lydon alone could not determine when or how the intellectual property was used.<\/p>\n
The case shows the importance of taking \u2013 and listening to \u2013 professional advice when entering into business agreements. If it was important to Lydon that he retained control over commercial use of the music, then he should have insisted that this be a reserved matter, requiring unanimous consent. In a more typical partnership agreement, you might want to insist on a right of veto for loans, or for spending above a certain amount.<\/p>\n