Hipgnosis Founder Did Not Steal Music Catalogue Idea, Judge Rules

A Broad Business Idea from a Director Does Not Become the Company’s Property

A music industry executive who built a billion-pound song rights business did not steal the idea from an earlier company he ran, the High Court has ruled.

Merck Mercuriadis, a former manager of Sir Elton John, Beyoncé and Guns N’ Roses, was sued by the liquidators of Hipgnosis Music Limited, a failed company he co-founded in 2015.

They argued he had taken the company’s plan to buy up the rights to popular songs and used it to launch a new fund, which went on to raise about £1.3bn from investors.

But Mr Justice Adam Johnson dismissed all the claims in June. He found that a broad business idea a director brings with him to a company does not become the company’s property – and he is free to use it after he leaves.

The ruling is likely to interest anyone who starts a business with partners, and anyone who invests in one.

For more information, please read the full case on Hipgnosis Music Ltd (in liquidation) v Mercuriadis & Others [2026] EWHC 1500 (Ch)

A Bet on Streaming

Hipgnosis Music Limited (HML) was formed after Mr Mercuriadis was introduced to two Swedish investors, Emil Ingmanson and Afram Gergeo, in November 2014.

The idea was simple. Streaming services such as Spotify were growing fast, and the founders believed the rights to existing songs – known as music publishing catalogues – were selling for less than they would eventually earn in royalties.

Buy the catalogues cheaply, the thinking went, and collect the rising income.

Mr Mercuriadis took a 47.5% stake. A company linked to the two Swedes held another 47.5%, for which it paid about £500,000. Music producer Aeon “Step” Manahan, who had made the introduction, held the remaining 5%.

A subsidiary, Hipgnosis Copyrights, was set up to raise money by issuing bonds – in effect, borrowing from investors. Its prospectus was ready by March 2017.

The Hipgnosis name came from the design studio famous for Pink Floyd’s album covers, and the brand’s logo was an upside-down elephant.

Flat Notes

The plan soon ran into trouble. In September 2016, background checks turned up reports in the Swedish press that Mr Ingmanson and Mr Gergeo were under investigation. A due diligence report the following month raised the same concerns.

The bond issue stalled in early 2017 and was never revived. A separate attempt to float a fund on the stock market, pursued through another company, was abandoned in September 2017.

That same month, Metro Bank closed the accounts of both Hipgnosis companies. Mr Mercuriadis told the court he was informed this was because of money-laundering suspicions linked to the Swedish investors.

In December 2017, the two men were arrested in the UK on a European Arrest Warrant over an alleged fraud against Swedish pensioners. Both were later convicted in Sweden, and Mr Gergeo was jailed for six years for money laundering.

Mr Mercuriadis applied to have HML wound up, and the court ordered it in February 2018. The bond subsidiary was struck off the companies register in May 2018.

Hipgnosis Founder Did Not Steal Music Catalogue

Second Time Lucky

Weeks later, in June 2018, a new company called Hipgnosis Songs Fund was set up. In July it floated on the stock market, raising about £202m.

By July 2021 it had raised about £1.3bn in total and bought a large number of song catalogues by well-known musicians and songwriters.

Mr Mercuriadis did well out of it, mainly through a company linked to him that advised the fund on what to buy. In 2021, the investment firm Blackstone bought a 51% stake in that adviser, paying him about $23.8m.

He also received more than £8m in salary and consultancy fees, plus smaller sums in dividends.

The fund’s fortunes later faded amid concerns about its debts and the value of its catalogues. In 2024 it was bought by a Blackstone-backed company in a deal that valued its shares at about $1.58bn.