Judge Hacon in the IPEC has awarded a loft conversion company additional damages of £6,000, on top of notional licence fee damages of £300, for flagrant infringement of the claimant’s photographs of its loft conversions.
The photographs were taken by the owner of Absolute Lofts and were fit for purpose although not up to professional standards. Artisan Home Improvements downloaded 21 of Absolute Lofts’ photographs and had them posted on its own site. Absolute Lofts threatened to sue and Artisan replaced the photographs with images licensed from Shutterstock for £300.
The starting point for copyright infringement damages is normally the licence fee that would have been agreed assuming the parties were willing to negotiate (the “user principle”). The judge disregarded evidence as to what a professional photographer would have charged (£9,000 according to the claimant, £700-1,000 according the defendant) and found that the licence fee of £300 actually paid to Shutterstock was as good a guide as any.
The difficulty when assessing additional damages is we now have two regimes to consider:
- Section 97(2) of the Copyright, Designs and Patents Act 1988 which allows additional damages where an infringement is flagrant; and
- Article 13(1) of the Enforcement Directive (2004/48/EC) which requires the court to take into account the claimant’s lost profits, any unfair profits made by the infringer and moral prejudice caused to the claimant, where the infringement is knowing or with reasonable grounds to know.
The judge found that the owner of Artisan either knew that the copies of Absolute Lofts’ photographs on Artisan’s website were infringing copies or alternatively that he had reasonable grounds to know they were. Additional damages of £6,000 were appropriate under both Section 97(2) and Article 13(1).
The judge found that Absolute Lofts’ photographs made a contribution to Artisan’s profits by encouraging those who visited Artisan’s website to pay Artisan to do a loft conversion. Artisan therefore profited from its acts of infringement (its turnover having increased from £226,000 to £498,000 between 2011 and 2013) and those profits were particularly unfair because they were generated by a misrepresentation to Artisan’s customers that it had done the conversions featured in Absolute Lofts’ photographs.
The additional damages of £6,000 were 20 times the licence fee damages of £300. An innocent infringer will rarely pay damages higher than the licence fee, but a guilty infringer will sometimes pay a lot more. The defendant’s state of mind is therefore a key element in infringement cases.