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Mr. Fred Einbinder international Business Law AUP Spring 2003 Lesion/Artistic Property Ted Bates SA. v. James Sugar COURT OF APPEALS OF VERSAILLES (First Chamber, Chiet Judge M, Remy] (June 9, 1986) The Court Sitting on appeal tram the iudgment of the Commercial Court at Nanterre rendered the 27'h of November 1984. Appellant-Ted Bates S.A. Facts and Procedure: Ted Bates S.A., an advertising firm, under contract from one at its client to conceive and show a spot announce, obtained trorn the Black Star company, acting as Mr. Sugar's agent and whose French correspondent is the Socit Rapho, the assignment of the reproduction rights for a photograph taken by Mr. Sugar for a fixed sum of $1,000. Believing himself to have suffered a loss as a result at this assignment of more than 7/12ths amounting to either a lesion or an inadequate forecast of the gains to be realized From his work, Mr, Sugar having based his case on the provisions at Articie 37 at the Law at March 11, 1957 on intellectual and artistic property brought an action against the Ted Bates company before the Commercial Court of Nanterre tor the sum at 67,980 trancs plus interest; By a iudgment rendered the 27'h at November 1984, the commercial court: - reiected the motion to dismiss the claim on the ground that no legal relation between the litigants existed; - ordered the said company to pay Mr. Sugar the sum of 67,980 francs, exclusive of taxes, with legal interest as at 16 April 1984 The Court also awarded costs of 5,000 francs pursuant to Article 700 at the New Code of Civil Procedure. The Ted Bates company, appellant, requests the Court to reverse the lower court's decision and to declare Mr. Sugar's claim invalid and to order him to pay the sum at 50,000 trancs as damages tor abuse of process and to award cost in the sum of 10,000 trancs pursuant to Article 700 at the New Code of Civil Procedure. Mr, Sugar requests the Court: - to declare and judge that independent of the legal relationship created between the Ted Bates company and Mr, Sugar by the intermediary ot the firms, agents of Mr. Sugar, he has the right, pursuant to articie 37 of the Law at 11 March 1957 to request the assignee at the reproduction rights, that is to say, the user at the protected work, in the present case, the Ted Bates company, the modication of the agreed upon Fixed sum tor the assignment at the reproduction rights with a View to using the protected works; - to declare and iudge that pursuant to article 37 of the law at 11 March 1957, Mr. Sugar having established that he suffered a loss at more than 7/12ths, has a right to require the modification at the contractual prices; - to declare and iudge that in accordance with the rates generally used, the sum owed to Mr. Sugar is 67,980 francs (exclusive at taxes),- Therefore: - to ordEr the Ted Bates company to pay him the principal sum of 67,980 francs, exclusive of taxes, plus legal interest from the 16'\" at April 1984, the date at the service of process in the lower court action; - to order the Ted Bates company to pay him the sum of 7,000 francs pursuant to article 700 New Code of Civil Procedure in addition to the sum of 5,000 francs awarded to him by the lower court judgment; ~ to order the Ted Bates company to pay all costs. Discussion Considering that the Ted Bates company wrongly contends that James Sugar cannot bring an action in contract against it because it never dealt with him, but only with the Black Star and Rapho companies. Considering that in reality, as correctly underlined by the lower court, these two companies only acted as agents at James Sugar; that under these conditions, by these intermediaries, a legal relationship was created between Ted Bates and the appellant and the action was theretare properly brought; Considering, on the merits, that by a letter at 4 October 1983, the Black Star company accepted on behalt at James Sugar to assign to the Ted Bates company the reproduction rights to a photograph taken from an airplane for the price at $1,000 "tor the use at a photo (in double page and three photos to use in an advertisement"); that agreement existed on the obiect and price; that James Sugar does not contest this point since he limits himself to bringing an action requesting rescission on the grounds at lsian. Considering that as concerns literary and artistic property, the law of March 11, 1957 provides that whenever the remuneration provided for is in the form of a fixed sum as in the present case, \"in the case of the assignment of a right to exploit a work whenever the author suffers a loss of over 7/121hs as a result of a "lesion" or an inadequate forecast of the profits to be made from the work, he may demand the modification of the contractual price"; that the argument of the Ted Bates company that rescission is not possible in the advertising field because "the profits from the work cannot be determined because the work is incorporated into the advertising campaign from which it cannot be dissociated; that such an increase would only be relevant within the framework of an action based on an inadequate forecast of the gains to be made from the work whereas in the present case James Sugar's sole request is for rescission due to lesion; that the above cited article 37 does not require the courts to refer to the profits of the work in the latter hypothesis that on the contrary article 37 draws a clear distinction between the two possibilities for modifying the price, the loss of more than 7/12ths may result from a \"lesion\" or an inadequate forecast of the profits to be made from the work\