July 9 2001 Putting a Price on Piracy Roschier, Attorneys Ltd | Intellectual Property - Finland Intellectual Property The Supreme Court of Finland has recently considered issues of reasonable compensation in two cases where the defendants were charged with copyright-related crimes. In the first case the defendant had attempted to import 123 pirate compact discs (CDs) to Finland but he was caught by the customs officers and the CDs were confiscated. The CDs had been manufactured abroad but the defendant had not been involved in these actions. The Supreme Court did not deviate from the rulings of the district court and the court of appeal, both of which had found the defendant guilty of copyright crime. This was based on the fact that although the defendant had not distributed the pirate CDs to the public he had, nevertheless, imported the CDs with the intention of selling them, which was considered a violation of Finnish copyright legislation. However, despite the defendant being convicted of a copyright crime he was not found liable to pay reasonable compensation to the collecting society Teosto or the relevant copyright holders, as he had not manufactured the CDs or distributed them to the public. The defendant in the second case had obtained approximately 100 pirate copies of CDs from an unknown person and sold two-thirds of them. The defendant was found guilty of copyright offence by the district court and the court of appeal. The decision regarding the question of guilt was final but the decision regarding reasonable compensation was appealed to the Supreme Court. The Supreme Court found that the mere fact that the pirate CDs were kept available to be sold was enough to establish grounds for liability to pay reasonable compensation. In its reasoning the Supreme Court followed the line it had adopted in earlier cases and stated that reasonable compensation does not include any compensation for damages. 'Reasonable compensation' is generally considered to be the usual price for which the user could legally obtain the right to use the copyright-protected work (eg, licensing fees). However, the special features of each case should be taken into consideration. In this case the Supreme Court applied the principle it had expressed in a case tried in 1998. According to this principle the price normally paid for the regular use of the copyright-protected work is used as a starting point in the evaluation of the amount of compensation. The reasonable compensation was found to be the value added tax (VAT)exclusive wholesale price of the CDs. As for the confiscated CDs that the defendant had not had the opportunity to sell, the Supreme Court found the copyright infringement to be less severe. It also noted that the actions of the defendant had not been professional, but were more of an occasional nature. However, since the defendant had acted wilfully the compensation could not be trivial. Therefore the reasonable compensation for the confiscated CDs was found to be half of the VAT-exclusive wholesale price.For further information on this topic please contact Rainer Hilli, Eeva Hakoranta or Kati Määttä at Roschier Holmberg, Attorneys Ltd by telephone (+358 20 506 6000) or by fax (+358 20 506 6100) or by e-mail ([email protected], [email protected] or [email protected]). The materials contained on this web site are for general information purposes only and are subject to the disclaimer.