Last week, the UK High Court ruled against lead singer John Lydon (aka Johnny Rotten) in his battle against fellow Sex Pistols.

The dispute arose from Johnny Rotten’s refusal to allow Sex Pistols’ songs to be used in Disney’s upcoming TV series about the band which is based on guitarist Steve Jones’s memoir “Lonely Boy: Tales from a Sex Pistol“. The six-part TV series about the Sex Pistols is being directed by Danny Boyle, who also brought us Slumdog Millionaire and Trainspotting, and is scheduled to hit our television screens next year.

The Pistols’ rights to their music is governed by an agreement signed by the members in 1998 – the Band Members Agreement (“the BMA”). The key question in the case was whether the other band members’ permission for Sex Pistols’ music to be used for the show under a synchronisation licence could trump Lydon’s refusal.

Estoppel

The BMA permitted the band’s music to be licensed with “approval by a majority” (i.e. unanimous consent was not needed). However, Lydon’s main argument was that the Pistols were estopped from relying on this clause in the agreement.

Estoppel arises when a party makes a particular representation to another or shares a belief with them, and the representation or belief turns out to be incorrect. In such a case, that party can nonetheless be legally bound by that representation or shared belief. The underlying rationale is that the party is responsible for the false representation or belief, such as through saying something or going along with it, and it would be unfair from them to later go back on it.

There are different types of estoppel. Rather than particularising which type he was claiming, Lydon relied on “all conceivable kinds of estoppel”, including “a combination or amalgam of all or some”. The judge noted that a “combination or amalgam” of estoppels is not “known to law” so deemed it necessary to “have the law of all of them in mind”.

Luckily, the parties did not dispute the underlying principles of estoppel. However, the judge prefaced his decision with some helpful clarifications on particular types:

1. Estoppel by convention – this arises where parties share an inaccurate common understanding or assumption or one party acquiesces in the other’s misunderstanding or erroneous assumption. The judge emphasised that the parties must expressly share the assumption for it to be unjust for one party to go back on it.

2. Estoppel by representation – this arises where a party represents a certain fact, which is inaccurate, in order to induce or influence the other. The judge reiterated that although a representation can be made by either words or conduct, the evidence must clearly demonstrate that the representation was made. It is insufficient that a party’s conduct simply coincides with the representation– they must actually make the representation, even if implicitly.

3. Promissory estoppel – this arises where there is a clear and unequivocal promise or assurance to influence another’s actions and that promise is later not kept. The judge reminded that silence, saying nothing, or standing back is ambiguous and would not normally qualify as a clear and unequivocal promise or assurance.

(Proprietary estoppel was also pleaded but the judge considered it “impossible” to succeed, and did not consider it.)

The events

Lydon gave over twenty examples of events concerning Sex Pistols’ rights and various licensing deals that he claimed gave rise to shared assumptions, acquiescence, and representations by the other Pistols that the parties never relied on the BMA to allow a majority to override a single vote and, instead, they shared or acquiesced in the assumption that unanimity was always required.

The events raised by Lydon started with a merchandising agreement with Silver Kingdom in 2005 relating to Sex Pistols songs being played at the opening ceremony of the 2012 London Olympics, and ended with an unsuccessful deal for the Pistols’ music to feature on Netflix’s The Crown. The judgment gives some interesting colour to the band’s dynamics. The Crown deal, for example, was rejected because Lydon’s manager did not approve of the show’s re-writing of history “for political ends or for dramatic effect”, despite its huge success after two seasons by the time the Pistols were approached.

After going through the “long catalogue of incidents said to demonstrate assumptions and representations”, the judge found that none of them could give rise to estoppel. Sir Mann found that Lydon’s allegations “lack credibility” as they presupposed that the majority of Pistols could and would override Lydon in every transaction which they favoured, ignoring his views and regardless of damage to the brand. This was not the case. Practical, commercial reasoning and “a desire to be as consensual as possible about matters” often informed the band’s approach to licensing deals, but this did not mean that the Pistols acquiesced or represented that the majority rule did not apply.

Remedy

The result of the judgment is that the BMA is deemed to include an implied term obliging Lydon to give his consent and sign any licence that is necessary to give effect to the band majority’s decisions. For Disney, this means that a synchronisation licence can be granted to them for their upcoming series, and the show’s production may continue.

Comment

Sir Mann noted in his judgment that the relationships between the band members have always been “strained” and Lydon “feels he has been treated with disrespect”. This week, following the judgment, Lydon commented in a press statement on his website that the decision is “dumbfounding” to him since he is “the lead singer and songwriter, front man, image, the lot…” of the band.

The case serves as a helpful reminder to artists, managers, and those involved in music and IP licensing that, ultimately, the text of a contract is of upmost importance. Although maintaining cohesion and good relations is always encouraged, this may not always be mirrored in parties’ legal rights and obligations.

The six-part TV series about the Sex Pistols is being directed by Danny Boyle, who also brought us Slumdog Millionaire and Trainspotting, and is scheduled to hit our television screens next year.