Court Overturns $3.6M Magazine Settlement

A British court overturned a ruling ordering celebrity magazine Hello! (search) to pay more than $3.6 million to a rival for printing unauthorized photos of the New York wedding of Michael Douglas (search) and Catherine Zeta-Jones (search).

On Wednesday, three Court of Appeal judges backed the magazine's challenge to a lower court's order that it pay more than $1.8 million in damages and another $1.8 million in legal costs to rival magazine OK!, which had an exclusive contract with Douglas and Zeta-Jones.

But the judges upheld the High Court's 2003 ruling that Hello! had breached the couple's commercial confidentiality by publishing secretly snapped photos of their November 2000 nuptials at the Plaza Hotel in New York.

Hello! still must pay token damages of $28,000.

During a six-week hearing in 2003, Zeta-Jones said she had felt "violated" when Hello! published its "sleazy and unflattering" pictures.

She singled out an image that showed Douglas feeding her wedding cake, saying, "I don't usually like my husband shoving a spoon down my throat to be photographed."

In its appeal, Hello! argued that it had run its own wedding pictures as a "spoiler" to its rival's coverage — a common practice in journalism.

The court agreed, dismissing a claim by OK! that Hello's pictures had unlawfully interfered with its business.

Chris Hutchings, a lawyer for Hello!, said Wednesday's ruling was "a resounding win" for the magazine.

Northern and Shell, which owns OK!, said it would appeal the ruling to the House of Lords (search), Britain's highest appeals court.

"This decision will impact all publishers with exclusive rights, as it means rivals will be free to run spoilers with no redress in law," the company said in a statement.