Twentieth Century Fox v. Cyclone Events Limited and Stiwt Arts Trust Limited
Defending a local theatre and events company against a global entertainment giant
Twentieth Century Fox v. Cyclone Events Limited and Stiwt Arts Trust Limited: Short Summary
Defending local theatre against Fox copyright claim
The problem: Our clients, a small events company and community theatre, faced a High Court copyright claim from Twentieth Century Fox for an unauthorised performance of "The Greatest Showman." Fox claimed disproportionately high damages (initially suggesting £500k+) despite modest ticket sales (£40k), risking financial ruin for our clients.
Our action & the result: Liability was admitted early. Our strategy focused on mitigation. We successfully applied to transfer the case from the High Court to the cost-capped Intellectual Property Enterprise Court (IPEC), despite Fox's appeal (dismissed as "wholly without merit"). This limited costs exposure. Facing a more realistic IPEC valuation, Fox reduced their claim to ~£72k. We negotiated a settlement for just £15k damages + £10k costs contribution, saving our clients from potentially crippling costs and damages far exceeding the infringement's actual scale.
Twentieth Century Fox v. Cyclone Events Limited and Stiwt Arts Trust Limited: In detail
When creative passion meets corporate intellectual property, the results can be daunting. Cyclone Events, a family-run company, and the Stiwt Arts Trust, a community theatre in North Wales, staged their own version of the popular film "The Greatest Showman." What followed was not applause, but High Court proceedings initiated by entertainment behemoth Twentieth Century Fox Film Corporation ("Fox").
Fox alleged copyright infringement, bringing the full weight of their legal resources against the small local organisations and their directors. With liability admitted early due to naivety, the defendants faced potentially ruinous damages claims and legal costs, initially estimated by Fox to be in the hundreds of thousands of pounds.
Cyclone and Stiwt engaged Virtuoso Legal to navigate this high-stakes situation and mitigate the potential financial fallout.
Our action and the result
Our primary focus was strategic litigation management to protect our clients from disproportionate consequences. Recognising the massive disparity between Fox's inflated damages claims (at points exceeding £500,000) and the actual ticket sales (£40,000), we took decisive action.
We successfully applied to transfer the case from the High Court to the more cost-effective Intellectual Property Enterprise Court (IPEC), arguing that the realistic value of the claim fell well within IPEC's limits. Fox fiercely resisted this transfer, incurring significant costs, but their appeal was ultimately dismissed by Mr Justice Birss as "wholly without merit."
This crucial procedural victory capped the potential costs exposure for our clients and forced a more realistic assessment of damages. Fox eventually reduced their formal claim to around £72,000. With the matter now on a more reasonable footing, we facilitated settlement discussions.
The case concluded with an agreed payment of £15,000 in damages and a £10,000 contribution to Fox's costs – less than 3% of the figures initially suggested by Fox. Our clients avoided financial ruin, and the community theatre was protected, despite Fox incurring estimated costs well over £100,000 through their aggressive approach.
The takeaway for innovators and creatives
Passion projects and community events can sometimes inadvertently cross copyright lines. While acknowledging mistakes is important, facing down disproportionate claims from large rights holders requires a robust strategic defence. Understanding court procedures, particularly cost implications and the appropriate forum (like IPEC), can be critical in levelling the playing field and achieving a fair outcome.
Facing a copyright dispute or aggressive claim? Book a confidential consultation with our specialist IP team.
The legal deep dive: forum battles and managing disproportionate claims
For legal professionals, Fox v Cyclone serves as a stark reminder of the importance of choosing the correct forum and the potential consequences of pursuing disproportionately valued claims.
- Strategic importance of the IPEC transfer: With liability admitted, the key battleground became the appropriate court. Fox issued in the High Court, likely anticipating higher cost recovery and potentially aiming to intimidate the defendants.
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- Application for transfer of proceedings: We applied for transfer to the IPEC, leveraging CPR rules and arguing that the claim's realistic financial value (based on actual ticket sales and potential reasonable royalties or lost profits) clearly fell below High Court thresholds and within the IPEC's damages cap (£500k, but generally suited for lower-value IP claims).
- Judicial Scrutiny: The High Court Master agreed, transferring the case. Fox's subsequent appeal demonstrated the significance of this point.
- Appeal Dismissal: Birss J.'s firm dismissal ("wholly without merit") highlighted that courts will scrutinise inflated claims used to justify High Court proceedings, especially where the IPEC offers a more proportionate venue. This transfer immediately limited Fox's potential recoverable costs under the IPEC's capped costs regime (then £50,000 for liability/quantum) and significantly reduced our clients' future costs risk.
- Managing damages expectations: Fox's initial damages posturing (claiming potential losses "in excess of £200,000" and later suggesting over £500,000) contrasted sharply with the £40,000 ticket revenue. While copyright damages can include factors beyond lost profits (e.g.,user principle/reasonable royalty, flagrancy damages), the initial figures appeared punitive.
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- Points of claim reality: The eventual service of Fox's Points of Claim, quantifying the maximum claim at ~£72,000, represented a significant reduction, likely influenced by the IPEC context and a more realistic damages assessment.
- Settlement leverage: This climb-down, coupled with the IPEC costs regime, created a more favourable environment for settlement negotiations, allowing us to secure a resolution (£15k damages) far below even the revised claim value.
- Costs consequences of conduct: Whilst the defendants contributed £10,000 to Fox's costs as part of the settlement, this was a nominal sum compared to Fox's likely actual spend (estimated >£100k). Fox's aggressive pursuit, including resisting the IPEC transfer and maintaining inflated damages claims, ultimately proved costly for them. This serves as a cautionary tale about proportionality in litigation.
Summary of key litigation points
This case highlights the critical tactical advantage of securing the appropriate forum in IP disputes, particularly utilising the IPEC for SME defendants facing large claimants. Successfully challenging inflated damages claims and leveraging procedural rules can significantly mitigate exposure and facilitate sensible settlements, even when liability is not in dispute. We specialise in robustly defending SMEs and individuals against disproportionate IP claims.
Need strategic advice on managing IP litigation costs or forum selection? Contact our team for a confidential discussion.
- Elizabeth Ward, principal of Virtuoso Legal said:
- “These proceedings have been deeply regretful to witness. The Defendants clearly made an early set of mistakes in the showing of their version of the Greatest Showman. However, in my view, they were simply naïve in their desire to put on a local theatre production for predominantly children, rather than some sort of criminal mastermind infringement operation. Unfortunately, Twentieth Century Fox did not see the case this way and embarked on a wholly disproportionate set of proceedings. If Fox had been more reasonable at the outset, these proceedings could have settled within a month, rather than dragging on for almost a year, and in the process risk the closure of a local community theatre and costing Fox well over £100,000. We would hope they (and other similar rights holders) would re-consider this sort of disproportionate approach in the future. If other local theatres find themselves being bullied by large corporations, I trust they will pick up the telephone and give our team a call.”