A recent decision of the Finnish Supreme Court in a software copyright infringement case has deviated from previous practice. Reasonable compensation awarded to copyright holders in infringement cases had hitherto corresponded to the retail prices of the products concerned. The Supreme Court found that the retail prices of the software in this case could not serve as a basis for determining reasonable compensation once the purpose of the infringement was considered.

The case concerned a Bulletin Board System (BBS) containing illegal copies of copyrighted software. The defendant had constructed and maintained the BBS and had allowed others to copy software on the BBS in exchange for uploads of new software. The Supreme Court found that the defendant's actions constituted wilful infringement for commercial advantage and were therefore copyright infringement. When determining compensation to be awarded to the copyright holders, however, the Supreme Court set the amount at approximately 50% of the retail prices of the infringed software. It stated that an award of the full retail prices would be unreasonable because the BBS users had copied the software mainly 'for sport' (ie, as a hobby) and for temporary use.

The ruling reflects the difficulties the Supreme Court has had in interpreting the reasonable compensation rule with regard to software infringement. An earlier decision (Supreme Court decision No.1998:91, August 21 1998) held that in cases of wilful infringement for commercial advantage the amount of reasonable compensation should equal the price that the infringing party would have had to pay if he had purchased a licence. Previous rulings had consistently awarded compensation with reference to the retail price. Despite this change, the latest decision is likely to be of limited effect as a precedent.

The Copyright Act states that the copyright owner is entitled to reasonable compensation regardless of whether the infringer knew, or should have known, that his act constituted infringement. Its wording suggests that the manner or purpose of the infringing use should not affect the award of reasonable compensation. In this case the Supreme Court considered the compensation claimed by the copyright holders to be excessive in relation to the financial circumstances of the defendant. It is arguable that this not an acceptable ground for the reduction.

For further information on this topic please contact Rainer Hilli at Roschier Holmberg, Attorneys Ltd by telephone (+358 9 228 551) or by fax (+358 9 664 303) or by e-mail ([email protected]).
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