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Lofty damages award for infringement

The calculation of damages awards has received some clarification in the recent case of Absolute Lofts South West London Limited v Artisan Home Improvements Limited [2015] EWHC 2608. As well as addressing the position in relation to UK and European additional damages awards, this recent case in the Intellectual Property and Enterprise Court serves as a reminder that damages awards following infringement can go far beyond what would have been agreed between the notional willing licensor and willing licensee. 

DIY images

The Claimant, Absolute Lofts, offered loft conversion services and on completion of a job, arranged for photographs of the conversion to be placed on its website for promotional purposes. 

The Defendant, Artisan, offered home improvement services and used, on its website, 21 photos taken from Absolute Lofts website. On receipt of a letter requesting that it cease and desist, Artisan removed the Absolute Lofts images and replaced them with images that it had purchased from a stock photo library for £300. 

Issues between the parties

Liability for copyright infringement was not in dispute and the issue that remained related to the level of financial relief.

Compensatory damages

This aspect was fairly easily managed by the judge. He held that given the geographical nature of the businesses (South West London v Bradford) and the local nature of their work, Absolute Lofts had not suffered any detriment from the misrepresentation on Artisan's website. 

The judge found that Absolute Lofts would have been willing to sell its images to a non-competing business and that Artisan was clearly prepared to pay a small amount given that they subsequently purchased images for £300 from a stock photo library. 

The judge therefore awarded £300 by way of compensatory damages.

Further financial relief

As well as the compensatory damages, there were two options available to Absolute Lofts for increasing its financial awards:

  • recovery of unfair profits under the European Enforcement Directive (Enforcement Directive); 
  • additional damages under the Copyright, Designs and Patents Act (CDPA).

The first issue was to determine whether the European provisions overrode the Act. The judge explicitly confirmed that it does not but instead provides an alternative route for recovery of additional damages. 

European Enforcement Directive

Under this Directive, the judge considered that Absolute Lofts was entitled to additional damages to take into account unfair profits made by Artisan through its infringing use of the photographs. The Judge noted that these profits were particularly unfair as Artisan had made a misrepresentation to its customers that the photographs showed work carried out by Artisan. 

Although Absolute Lofts wasn’t adversely affected by Absolute Lofts conduct, the judge considered that it had suffered prejudice as it had not benefited from the unfair profit that accrued to Artisan.

Further, the purely compensatory award of £300 lacked the dissuasive element required by the Enforcement Directive.
In conclusion, under the Enforcement Directive, while an assessment of quantum was difficult on the facts, the judge held that Absolute Lofts should receive a further £6,000.

Additional damages under CDPA

The judge expressed the view that the infringement was flagrant and, although typically the assessment under this Act is different to that under the Enforcement Directive, the judge considered that £6,000 would also be an appropriate award.

Absolute Lofts therefore did not need to elect between the two provisions for its further relief.

Comment

This case is of interest on two levels:

Firstly, it serves to remind that the total award made against an infringer can be far higher than the often discussed 'licence fee' – in this case 21 times higher.

Secondly, it clarifies that rightholders can elect for the calculation of further financial relief on the basis of whichever of the Enforcement Directive or the CDPA Act offers the more favourable outcome.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at October 2015. Specific advice should be sought for specific cases. For more information see our terms & conditions on www.TLTsolicitors.com

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