Facts
Decision


In the recent case of Marketing Externo SA v Telecom Personal SA s/ Damages, dated 10 August 2022,(1) Chamber G of the National Court of Civil Appeals confirmed the sentence that admitted the claim for damages for the unauthorised use of the song Magic City by Tan Bionica in an advertising campaign.

Facts

Marketing Externo SA, which holds the rights to the song, filed a complaint for damages against Telecom Personal SA for using the song without authorisation and without paying the corresponding royalties. The song was used to promote the renowned festival Personal Fest Verano 2015.

When answering the complaint, Telecom stated that it had hired the company Siberia SA for the development of the advertising campaign, a company that – according to its understanding – would have faced and cancelled the obligations derived from all the rights for the development of the campaign. For this reason, Telecom had used and exhibited the advertising campaign on the understanding that all IP rights requirements involved in the advertising campaign had been duly satisfied.

Decision

First instance
In the first instance, the action regarding Siberia SA was rejected, but the court ordered Telecom to pay an indemnity of $300,000, plus interest and legal fees.

According to the judge, the defendant:

was in charge of a legal obligation of result, which consisted [of] obtaining, prior to the dissemination of advertising, the express authorization of the plaintiff to use the phonogram corresponding to the work music in it.

The plaintiff appealed the decision, requesting an increase in the compensation for damages totalling the amount that the defendant paid for the advertising campaign, plus an additional 100% as "punitive compensation".

Chamber G of National Court of Civil Appeals
The Court understood that the plaintiff's claim lacked support; not only was it is unclear and unfounded on what the claim for reparation was based, but the claim also bore no relation to the amount for which the external marketing firm had acquired the property of the band's music catalogue. For this reason, the Court confirmed the amount awarded at first instance.

The Court also highlighted what the author of an intellectual work may claim in the event of an infringement of their rights:

the author of an intellectual work is entitled to the benefit that he could have obtained if an illicit use would not have occurred or the best remuneration that he could have received had he authorized exploitation. By this reasonable alternative, it is avoided that it is more beneficial to infringe the author's right than to respect it, because if the user pays a lower price in Court than negotiating with the right holder, infringements are encouraged.

Regarding the claim for compensation for punitive damages, the Court quoted the criterion of the doctrine which establishes that granting punitive damages is exceptional and of restrictive interpretation. In this sense, the Court confirmed the first instance decision and said that:

in a case such as the present one, neither is enrichment without cause projected in a kind of inertial profit – so to speak – a benefit for the actioned party, proven in the process, derived from the effects of the civil offense involved in the process.

Consequently, the Court decided to reject the appeal and confirmed the judgment of first instance.

For further information on this topic please contact Julieta Pérez Espinosa at Ojam Bullrich Flanzbaum by telephone (+54 11 4549-4900) or email ([email protected]). The Ojam Bullrich Flanzbaum website can be accessed at www.ojambf.com.

Endnotes

(1) File No. 23,837/2017.