Damage due to Copyright Infringement

In the event of copyright infringement, the infringer can be held liable to pay damages. The rules to claim liability of the infringer, and the rules for damage, are no different than in an ‘ordinary’ tort.

The first requirement to claim compensation is that the infringement must have caused damage. In the case of an infringement, the existence of damage is often directly assumed by judges. The discussion therefore often boils down to the question of what damage was suffered.

Consequently, the main rule to calculate compensation is based on a concrete determination of the damage.

The main rule is that only damage actually suffered must be compensated in the event of liability. 

However, this is often very difficult with copyright infringements. Especially when the infringement on the internet takes place.

The starting point is that the damage must be determined based on the compensation that would have been due if the copyright owner had given permission for the publication and/or reproduction.

In addition to the missed license fee, rightholders often also try to claim other damages, such as damages for infringement of personality rights, loss of exclusivity and reduction of exploitation possibilities. Decreases in traffic to the rights owner’s website, missed advertising revenues and research costs are also often reported. Judges deal with this differently. A good overview of the state of affairs up to 2015 has been given by LAWFOX partner Arnoud Engelfriet in the Dutch article: “Compensation for damages for online copyright infringement: state of affairs 2015”.

In the enforcement of intellectual property rights, the law has the principle that the full, actual legal costs must be reimbursed by the unsuccessful party. If the offender is unsuccessful, this can lead to considerable (extra) costs. Depending on the type of case, the legal costs according to indicative rates (2017) can be estimated at a maximum of EUR 8,000 to a maximum of EUR 40,000. This means that not only the infringer but also the (alleged) rightholder must have a clear outcome: if both parties are (partially) unsuccessful, the judge can order both parties to pay the costs. Moreover, in some cases, the judge finds that the legal costs are disproportionate to the financial interest of the case.

If an offender demonstrates his willingness to pay damages with real compensation, while the claimant continues to hold on to higher amounts, litigation costs may also be mitigated. Furthermore, failure to provide proof that you are a copyright holder can lead to a reduction in legal costs. When there is no intent, lower compensation can sometimes also be allocated.

In practice, it is often difficult to determine the actual damage suffered. It also regularly occurs that the copyright holder cannot demonstrate what compensation would have been due if the copyright holder had given permission for the publication and/or reproduction. The Den Bosch Court of Appeal delivered a judgment in 2014 in such a case:

First, the Court ruled that the degree of culpability may play a role in the question of the income that the copyright holder may have lost. For example, imagine that the infringer professionally participated in civil society. As a professional participant in social traffic, you must be aware that the copyrights of third parties can be compromised. The infringer can reasonably also assume that photos of a professional photographer are subject to copyrights. In that case, the entitled party had referred to what is customary for an assignment to take photographs.

In this case, the photographer referred to the General Terms and Conditions of the Federation of Photographers. According to the photographer, a connection should be sought with this, as would happen in many other lawsuits. The infringer, however, disputes this. The Court ruled that there is no basis for this.

The photographer also took the view that an increase of at least 100% would not be uncommon according to case law. However, the Court ruled that the granting of such penalty amounts (US-style punitive damages) has no legal basis, nor is it consistent with recital 26 and Article 13 of the Enforcement Directive (Directive 2004/48 / EC).

In this lawsuit, the photographer had only submitted photocopies of a guideline or rate list from the photographic industry. The complete guideline or rate list was not submitted. One of these lists was a rate list of the “Stichting Foto Anonymous”. The origin of the other piece is said to be unclear. In addition, the rates would always refer to free licenses. According to the Court, this does not provide a good indication of the right to compensation in a specific case, such as that which was the case here.

The Court, therefore, ruled that the photographer must provide further information for the substantiation of the damage. For example, the complete guideline or rate list must be submitted in any case. Nevertheless, the court said that this still is not enough. The photographer will also have to provide other documents to determine the damage, such as the rate lists that the photographer used for photo assignments, depending on the purpose to be used.

The Court also considers that the number of times the infringing material has been examined, for what duration, and the dimensions of the image must be taken into account when assessing the damage.

Rightholders are advised to be sure about their position before they claim amounts arbitrarily. It is smart for infringers to investigate whether the damage claimed can qualify for compensation. In short, the following can be noted:

• Can it be demonstrated what the actual damage was? If not, it must be budgeted.
• The damage is generally estimated by determining the compensation that would have been due if the copyright holder had given permission for the publication and/or reproduction;
• There is also sometimes a basis for other damage items;
• The degree of culpability may play a role in the budget;
• No connection can be sought with usual rates, such as those of the Photographers Federation or Stichting Foto Anoniem;
• As a rule, there is no legal basis for increasing damage (as a fine); and
• Litigation costs can be recovered from the unsuccessful party or parties.

LAWFOX’s lawyers can assist you in answering the question of what damages may be due to infringements of intellectual property rights, such as copyright. Feel free to contact us to discuss this.