4.1 Illustration of the rule Chappell & Co v Nestle Co Ltd The facts: The defendants made a special offer, whereby if people callecred three wrappers from Nestle bars of chocolate and then sent them in with a small sum of moncy, they could get a copy of a record called 'Rockin' Shoes'. The case arose because the claimants owned the cop:right to the music and the two parties were trying to calculate the amount of royalties payable to Chappell, on the basis of the value of the records. The argument hinged on whether the wrappers, which were merely thrown away on receipt by Nestls, constituted part of the consideration and therefore should be included in the royalty calculation. Decision: The defendants had required that wrappers were sent in as part of the special offer, obvious commercial reasons. It was held that the wrappers were part of the consideration as they had commercial value in the cyes of Nestle, one of the parties to the contract. Problem Set D Ferrero Company is offering a promotion to its customers. Send the company one dollar plus 5 wrappers of any company's chocolate bar and the company collects $287, 324 from its customers. (10) How much does this chocolate company maintain it has to pay Chappell, the copyright holder of Rockin' shoes? Show your calculations. [A1/B1] (3 marks) (11) How much does Chappell maintain that it must be paid in copyright royalties? Show your calculations? [A1/B1/C1] (4 marks) (12) Based on the precedent of Chappell v Nestle, what level of royalties would a judge, under these circumstances, mandate that the chocolate company pay Chappell? Briefly explain. (maximum 25 words) [C2] (3 marks) 4.1 Illustration of the rule Chappell & Co v Nestle Co Ltd The facts: The defendants made a special offer, whereby if people callecred three wrappers from Nestle bars of chocolate and then sent them in with a small sum of moncy, they could get a copy of a record called 'Rockin' Shoes'. The case arose because the claimants owned the cop:right to the music and the two parties were trying to calculate the amount of royalties payable to Chappell, on the basis of the value of the records. The argument hinged on whether the wrappers, which were merely thrown away on receipt by Nestls, constituted part of the consideration and therefore should be included in the royalty calculation. Decision: The defendants had required that wrappers were sent in as part of the special offer, obvious commercial reasons. It was held that the wrappers were part of the consideration as they had commercial value in the cyes of Nestle, one of the parties to the contract. Problem Set D Ferrero Company is offering a promotion to its customers. Send the company one dollar plus 5 wrappers of any company's chocolate bar and the company collects $287, 324 from its customers. (10) How much does this chocolate company maintain it has to pay Chappell, the copyright holder of Rockin' shoes? Show your calculations. [A1/B1] (3 marks) (11) How much does Chappell maintain that it must be paid in copyright royalties? Show your calculations? [A1/B1/C1] (4 marks) (12) Based on the precedent of Chappell v Nestle, what level of royalties would a judge, under these circumstances, mandate that the chocolate company pay Chappell? Briefly explain. (maximum 25 words) [C2]
