Damages for infringement

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James9876
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Damages for infringement

Post by James9876 » Wed Dec 06, 2017 6:44 pm

In respect to a claim being made through the Intellectual Property Enterprise Court for damages as a result of a breach of copyright, (for example a photograph has been used on a commercial website or blog without licence or consent been given) how is the figure calculated? I realise the cost will be based on what the market value would have been if the image was licenced in advance of the usage and it’s the claimants responsibility to provide reasonable evidence to support this. What I wanted to know was, who decides if the case was particularly flagrant and does an amount have to be claimed at the time of serving the claim or is this part decided at the hearing? Basically what I’m asking is, does the claimant have to state what additional amount for damages is requested and give evidence as to why he is claiming an amount over and above the market value of the usage.

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Re: Damages for infringement

Post by AndyJ » Thu Dec 07, 2017 9:07 am

Hi James,

As a piece of general advice, if you are contemplating making a claim without getting legal representation, you need to be conversant with a number of documents which outline the procedure for bringing a claim and taking it through the court system. I am assuming that your claim will be for a figure under £10,000 and so it would be best handled on the Small Claims track of the IPEC. You would therefore need to download this guide: Guide to the Intellectual Property Enterprise Court Small Claims Track . That in turn refers you to the other important documents you need to consult.

One of the more important of these is Practice Direction 63. At paragraph 22.1 you will find the answer to part of your question:
Claims for Additional Damages [...]
Where a claimant seeks to recover additional damages under section 97(2) [...] of the 1988 [Copyright, Designs and Patents] Act, the particulars of claim must include:
  • (1) a statement to that effect, and
    (2) the grounds for claiming them.
And to answer the second part of your question, the court is responsible for setting the amount of any additional damages if it decides they are appropriate.

The other thing to bear in mind is that damages can be assessed in two distinct ways. The first is as you describe, namely the loss you as the copyright owner have sustained due to the infringement. The second is known as an account of profits. This is based on the profit the defendant is found to have gained by his infringement. You can elect for either process to be applied, but not both. Clearly where a defendant has made very widespread use of, say, a photograph to advertise his goods or on a product which he has sold, an account may yield more damages than would arise from the other method, ie based on a putative licence fee. It is usual for there to be two separate hearings: the first to decide liability and a second to decide the quantum ie the amount of any damages, costs etc, if the court finds in favour of the claimant at the first hearing. For small, uncomplicated claims, the two stage process may not be necessary.
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Re: Damages for infringement

Post by James9876 » Thu Dec 07, 2017 12:56 pm

Thanks Andy, I have already read the guide but will have a look at the other documents your refrenced.

So the only figures I need to provided are the fees I am requesting for the licence of use to date?

I then have to decide what damages I am appling for and explain why I see these as apropriate to the case?

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Re: Damages for infringement

Post by AndyJ » Thu Dec 07, 2017 3:01 pm

James9876 wrote:
Thu Dec 07, 2017 12:56 pm
So the only figures I need to provided are the fees I am requesting for the licence of use to date?

I then have to decide what damages I am appling for and explain why I see these as apropriate to the case?
Yes, that's it. Although the Practice Directions etc make it look complicated, the small claims track is relatively easy to navigate. And don't forget about Alternative Dispute Resolution which is something to consider once the process is underway. Even if you offer to use ADR and the other party declines, it counts in your favour later if you have to go to court. More details can be found on the IPO website.
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Re: Damages for infringement

Post by James9876 » Thu Dec 07, 2017 6:45 pm

Thanks again Andy.

I've identified several cases of infringement in Europe, one in particular that I am investicating is based in Paris. A quick search came up with The European Small Claims Procedure and I wondered if you had any knowledge of this and would this be my best option for claims under €5000 ? Is the alternative to this to claim through the french legal system and do you know if they have any provison for IP like the UK?

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Re: Damages for infringement

Post by AndyJ » Thu Dec 07, 2017 8:50 pm

Hi James,

I'm afraid the European Small Claims procedure is not applicable to intellectual property claims of the sort you are seeking. The ESC is for money claims (similar to the UK small claims system within the District courts) or for contractual disputes and the like. The UK's IPEC small claims track is almost unique as far as I am aware.

Turning to the matter of making claims in cases where the defendant is based outside the UK, life gets a lot more complicated and you are probably going to need to engage a lawyer for that. Let's look at the EU first (actually the same applies to all states within the European Economic Area, due to something called the Lugano Convention, but that's probably not important here). The general rule on cross border civil disputes (known as Brussels II after the EU Regulation on the subject) says that a civil claim should be brought in the country where the defendant is domiciled. However there are occasions where that doesn't apply, and instead, the courts within the country where the harm has occurred can have jurisdiction to try the matter. That frequently happens with IP related matters invovling the internet, since the 'harm' of infringement technically occurs everywhere where the internet is accessible and so the home territory of the claimant is equally valid. The problem with the bringing the claim here in the UK concerning a defendant based in, say, France, is that it is difficult to get the judgment enforced in the other member state. On that basis, you would be better off bringing the claim in the home country of the defendant in the first place, provided that the claim is sufficiently large to justify the additional cost to you of bringing a claim there. You will almost certainly need to engage your own lawyer in that country as a UK lawyer is unlikely to have a right of audience before the court of another state. In the case of France, the appropriate court is the Tribunal de Grande Instance. There are approximately 170 TGI courts scattered around France. I have no experience of the court procedues in the TGI.

For countries outside the EU the general rule is that you would need to bring a claim in the defendant's home country (and home State in the case of the USA), to have any chance of enforcing the judgement of the court.

You may find, that unless fairly large sums are involved, where foreign infringement is detected within other EU member states you would better off just using the EU Ecommerce Directive procedure (see Article 14(b)) to get the offending images taken down. Similarly, for the USA (and most of the rest of the world), use the DMCA takedown procedure to achieve the same result.
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Re: Damages for infringement

Post by James9876 » Thu Dec 07, 2017 9:18 pm

Thanks again Andy, another very informative answer which will no doubt save me a lot of time and energy.

I just wanted to ask another question regarding claims for damages. During initial correspondence with an offender, if the matter of a settlement figure is offerered in an atempt to conclude matters, is it often the case that a claimant would calculate the usage fee (as previously mentioned) and then add a multiplier to this figure for damages. Let's say for instance the usage was calculated at £500.00 and the multiplier was x2 the fee for a quick resolution would be £1000. Obviously this figure has to have been carefly calculated rather than just a figure off the top of one's head. If in the event that this offer is declined and the claimant then decided to file charges against the offender, would the charge then revert back to £500 and a claim for damages of an unspecified amount be sought?

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Re: Damages for infringement

Post by AndyJ » Fri Dec 08, 2017 9:44 am

Hi James,

Arguably you can ask what whatever figure you want initially, because you are operating in a sort of open market, and the other party may come back with a lower counter-offer and so on. You can add a small uplift to cover your administrative costs (say around 5%). However if you pursue the matter in court, you can only expect to be put back in the position you would have been in had the other party paid for a licence in the first place, again plus some of your costs in bringing the claim, but not any legal fees. You would need to provide the court with evidence to justify the licence fee you say you would have charged and which forms the basis for the damages you are claiming, such as previous licences you have supplied for the same or similar images and usage, or the 'market' rate based on resources such as the NUJ freelance fees guide.

The matter of additional damages is based upon a number of factors relating to the behaviour of the other party with regard to the infringement. For instance if he removed your watermark from a photograph, or had approached you for a licence but then declined to pay the fee and just used the image anyway, these would be examples of flagrancy, that is knowingly infringing your copyright. And if once he had been notified that he was infringing your copyright and that you wanted him to take an image off his website, he failed to do so, this too could amount to grounds for additional damages. But as mentioned, all you need to do is tell the court the circumstances which you consider to have exacerbated the infringement, and they will decide the amount of additional damages if the judge thinks they are justified. The purpose of awarding additional damages is, ostensibly, to deter such behaviour by the defendant and others in the future (sometimes referred to as exemplary damages), and not to punish the infringer. Civil cases are not about punishment. That is why terminolgy like 'offender' and 'filing charges' are not normally used in the context of civil cases.
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Re: Damages for infringement

Post by James9876 » Fri Dec 08, 2017 11:39 am

Hi Andy,

Yes, but what I'm trying to figure out is would/can the initial figure requested include a percentage of expected or antisipated damages for i.e flagrancy or punitive charges or is this only a decision made by the court.

I take on board your comments re terminology, obviously I have a lot to learn about the legal process.

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Re: Damages for infringement

Post by AndyJ » Fri Dec 08, 2017 4:09 pm

Hi James,

The point about additional damages is that it is an official sanction applied by the court, having weighed up the circumstances of the case. So you can't ask for the same thing in advance, because at this stage such extra damages are based solely on your assessment. But as I said, you are free to ask whatever you think is a reasonable sum, especially if you are sure the court would take the same view as you on the issue of flagrancy. That doesn't mean the other party has to accept your demand, or indeed, accept the way you arrived at the amount. If they take legal advice having received your demand, they will no doubt be advised about what a court might award in the circumstances, and therefore if they conclude that your demand is too high compared to what the court might award, they may feel it is worth letting you take the matter to court. Don't forget that they may have a defence of which you are unaware at this stage, and so they may feel it is worth a gamble that the court will find in favour of them.

Of course you are not the first person to adopt the approach you have outlined. A number of 'agencies' will do this on behalf of photographers (usually for a hefty share of the sums raised). Generally, my advice elsewhere on the forums to people who receive such letters and who acknowledge that they are probably liable for the alleged infringement, but are unhappy about the amount being demanded, is to make a counter-offer with a figure they consider is closer to the market value of the image(s) concerned. To an extent, this approach can be similar to using alternative dispute resolution, where the outcome is achieved by a certain amount of compromise on both sides.
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Re: Damages for infringement

Post by Fatty » Sun Dec 10, 2017 10:48 am

Hi James,

First your French case, the EU decision of Pez Hejduk. v. EnergieAgentur.NRW GmbH says in layman's terms that if an infringing image is visible on an EU website in one country, you can take action in that country regardless of where the defendant is based. Having said that, as Andy J pointed out, you would need to have the judgement enforced in France and you can expect the whole process to be difficult and complicated.

With regards to damages in your UK claim this is straight forward. If you are a practising professional photographer with a track record of sales, then you should present evidence of this and your normal sales price will almost certainly be accepted by the court as the base value of the work. If on the other had, you do not normally licence photographs then the court will consider market rates. You will no doubt as claimant present evidence of expensive photos while your opponent will present evidence of cheaper photos with the court left to decide which is applicable.

Suitable case law to read would be

Irvine & Ors v Talksport Ltd [2003] EWCA Civ 423

http://www.bailii.org/cgi-bin/format.cg ... tml&query=(title:(+Irvine+))+AND+(title:(+Talksport+))

This case shows that what is relevant is your own prices rather than the prices others charge.

Jason Sheldon v Daybrook House Promotions Ltd [2013] EWPCC 26

http://www.bailii.org/cgi-bin/format.cg ... tml&query=(title:(+sheldon+))+AND+(title:(+daybrook+))+AND+(title:(+house+))

As above but in a photograph context.

One of the most important judgements to read is Absolute Lofts South West London Ltd vs Artisan Home Improvements Ltd & Darren Mark Ludbrook [2015] EWHC 2608 (IPEC)

http://www.bailii.org/ew/cases/EWHC/IPEC/2015/2608.html

This case shows the courts methodology in the case of a collection of amateur photographs which had not been offered for sale. The case also outlines the courts approach for "additional damages". In this case the court valued the infringed photographs at £300 but the awarded additional damages of £6000 on top. The Courts can award additional damages either for flagrancy pursuant to section 97(2) Copyright Designs and Patents Act 1988 https://www.legislation.gov.uk/ukpga/1988/48/section/97 or alternatively in order to dissuade this infringer and other potential infringers from infringing pursuant to Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market ('Directive on electronic commerce')

http://eur-lex.europa.eu/legal-content/ ... 32000L0031

NB If there is any conflict between the EU Directive and the UK Act then the EU directive takes precedence. Interestingly I Absolute lofts, the court chickened out of deciding whether the damages should be for flagrancy or dissuasion and decided that they would have awarded the same under either legislation.

The absolute lofts case was at the upper end of what the courts award for additional damages. In the cases I am aware of in the small claims track, typical amounts range from 2x to 6x the normal value of work depending on the facts of the case.

When issuing your claim you must make clear on what legal basis you claim additional damages, so do quote section 97(2) and the EU directive above. As for the amount of additional damages, well you can either ask the court to consider an amount, or you can leave it completely up to the court ie " I claim an amount pursuant to section 97(2) to be decided by the court".Either way the sum is up to the court to decide. In practical terms and for the purpose of negotiating a settlement then its probably best to decide a reasonable sum the court may award and base your claim on that. Thus if you normally charge 500 GBP to use a photograph and the defendant has behaved very badly ( eg commercial use / big company / big use / removed name / removed meta data ) you may decide to claim 2000 GBP, ie 4x your normal price. You can always accept a lower offer. Just be aware of the risks of turning down a reasonable offer. If in the above case you turn down an offer from the defendant of say 1000 GBP because you are holding out for 1500 gbp and then in court the judge awards 8000 GBP then in all likelihood the court will make you pay the defendants costs. Costs are very limited in the small claims track so you may consider this risk worth taking but its wise to be reasonably flexible.

As for the practicalities of issuing a claim, you need to read the links Andy J sent ( don't issue a claim without reading them!! ) Also a nice step by step guide in layman's terms can be found on the Editorial Photographers UK website at http://www.epuk.org/the-curve/the-infri ... ight-claim. It includes some sample Letters of Claim and relevant links. It might look a bit complicated at first but don't worry, its straight forward as you work through it step by step. Very many photographers are now enforcing their rights through the IPEC small clams track.

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Re: Damages for infringement

Post by James9876 » Sun Dec 10, 2017 8:19 pm

Thanks Fatty, I really appreciate the time both you and Andy have taken to reply so throughly.

If I was to make a claim in the small claims trac where the usage fee's calculated value was at just below £10K, what happens about damages in this instance? Are the damages treated separately or can the total awarded never increase above £10K?

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Re: Damages for infringement

Post by AndyJ » Sun Dec 10, 2017 8:38 pm

James,

I can do no better than quote the Guide to the IPEC Small Claims track mentioned at the start of this thread:
4.2 Value
The IPEC small claims track is only suitable for claims where the amount in dispute (not including costs) is £10,000 or less. If the claim has a value of more than £10,000, it is unlikely to be suitable for hearing in the small claims track, unless the court orders otherwise.
The IPEC multi track is suitable for claims with a value above £10,000 but not exceeding £500,000.
Higher value claims are usually suitable for the Patents Court.
Before bringing a claim in the IPEC small claims track, the claimant should also make certain that each of the remedies it seeks is available.
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Re: Damages for infringement

Post by James9876 » Sun Dec 10, 2017 11:11 pm

Thanks Andy.

Ok so my claim is for less than 10K (given it's the court that decides the value of any damages awarded in adition to this) so from this it appears I can claim in the small claims track. I'm still unsure about the damages, am I right to think that this can be awarded so a total sum is above £10K, potentially 15K or higher without the case having to go to the IEPC multi track as the maximum value is based on the claim value not the final award total?

Or... on assesment of the claim, the court would decided that given the claim amount, and given the size of potential additional damages due it would automatically be refered to the multi track?

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