- Photos used on a website without the consent of the rights holder (a rival company)
- Low compensatory damages of just £300
- Should restitutionary damages be available to reflect the flagrancy of the infringement?
What's it about?
The action involved the use of photographs on a website. Just before trial it was accepted that the photographs had been copied, but the Judge then needed to assess the amount of the payment to be awarded to the copyright holder.
Why does it matter?
A successful copyright owner has to choose between an account of profits or damages. They are not permitted to claim both. Under English law damages are intended to be compensatory and place the rights holder in the position that they would have been in the absence of the wrong that has been done. The usual assessment of damages is under the "user principle", i.e. what is the reasonable royalty that would be agreed between a willing licensor and licensee? In this case the Judge awarded the sum of £300, the sum he thought that the infringer would have paid for a licence for use of the photographs.
However, the copyright owner also claimed additional damages. Additional damages are available, at the discretion of the Court, under UK national law and also under the EU Enforcement Directive (which has been implemented into UK law) where an infringer knowingly or flagrantly infringes. The Court concluded that the Enforcement Directive had not replaced the UK national provision so a rights holder is not permitted to recover additional damages (under the English law regime) and an account of unfair profits (under the Enforcement Directive), but may choose whichever is more favourable. In this case, the additional amount awarded was £6,000, which – on the facts – would have been the same when calculated under either of the two regimes.
This Judgment is good news for rights holders where an infringer has taken a cynical, "couldn't care less" attitude to its behaviour, but where the damages or profit made is low. An additional amount may be available to compensate the rights holder and deter the infringer from future acts.
However, the extent to which the English Courts will be willing to depart from their previous reluctance to award punitive damages is debatable. The Judgment reinforces that a rights holder should never be able to recover both the profits of the infringer and a royalty payment by way of damages.
Damages assessments are and remain highly fact dependent and a rights holder should not assume that every infringement will result in an additional payment.
Absolute Lofts South West London Limited v Artisan Home Improvements Limited and another  EWHC 2608 (IPEC), 14 September 2015