We often get asked to prosecute cases where defendant X has copied and pasted photographs from client A’s website – it is sadly a common occurrence and can in some cases amount to both a passing off claim as well as to a claim for copyright infringement (subject to the client A being the owner of the copyright in the photographs in the first place).

We are always asked to advise on the level of damages that a client is likely to recover if the matter went to trial and how much they could see to claim in an earlier settlement negotiation. The IPEC (Intellectual Property Enterprise Court) has very helpfully just ruled on such a situation in the case of Absolute Lofts South West London Ltd -v- Artisan Home Improvements Ltd.

In this case, the defendant had copied photographs from the claimant’s website and incorporated them into its own website. The defendant had responded to the claimant’s letter before action, admitted copyright infringement and replaced the photographs with stock images of loft conversions which it purchased from a stock photo library for £300. The quantum of damages was still at issue and in particular (i) how much was due to the claimant as compensatory damages assessed on the ‘user principle’; and (ii) how much was due to the claimant in respect of damages for ‘flagrant infringement’ based on unfair profits made by the defendant.

Justice Hacon held that the starting point was an assessment of what the parties would have agreed had the claimant and defendant entered into a willing licence agreement in respect of the use of the photos. It was useful that the defendant actually paid for stock images in May 2014 following receipt of the letter before action and this was as good a guide as any to what the parties would hypothetically have agreed. The claimant was therefore awarded £300. This doesn’t seem a lot to me given the sorts of figures we see require by Getty under their licensing schemes.

With regard to damages relating to the flagrancy of the infringement, Justice Hacon found an award of additional damages under s.97(2) CDPA applied. The Judge held that the defendant had either obtained the claimant’s photographs from its website itself or had at all times been aware of their source and was indifferent to it. A successful claimant in a copyright infringement claim was entitled to rely on either s.97(2) or on the defendant’s unfair profits under art.13(1), whichever would provide for the greater damages. But the important issue to note is that the awards were not cumulative – it is one or the other.

Under s.97(2), the court was under an express statutory duty to have regard in particular to the flagrancy of the infringement, whereas flagrancy was not a compulsory factor in the assessment under art.13(1). However, if flagrancy was such and/or the benefit accruing to the defendant by reason of the infringement was such that additional damages under s.97(2) would exceed those available under art.13(1), an award under s.97(2) was not precluded by the Directive. The total amount of damages available under art.13(1) was expressly limited to those appropriate to the actual prejudice suffered by the claimant as a result of the infringement. The first defendant’s use of the claimant’s photographs had made a “more than negligible contribution” to its profits by encouraging those who visited its website to pay it to perform a loft conversion. The unfair profits which accrued to the defendants were made on the back of the claimant’s intellectual creativity which generated the copied images.

Justice Hacon concluded that strictly compensatory damages of £300 assessed on the user principle would “lack the dissuasive element the Directive required”. He held that the defendants’ infringement was flagrant within s.97(2), entitling the claimant to an additional damages payment of £6,000. Since awards under s.97(2) and art.13(1) were not cumulative, it followed that the defendants had only to pay an additional £6,000.

So whilst each case will of course be different and involve differing instances of infringement, flagrancy, damage to the claimant and unfair profits to the defendant, this case is extremely useful in understanding the court’s current interpretation of quantum under both s.97(2) and art.13(1).