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Tuesday, 5 April 2005

READER TO PAY EXTRA DAMAGES FOR CONTEMPTUOUS INFRINGEMENT


Subscription-only service Lawtel brings news of Phonographic Performance Ltd v Reader [2005] EWHC 416 (Ch), a Chancery Division decision of Mr Justice Pumfrey. After Reader admitted copyright infringement, rights administration society Phonographic Performance Ltd (PPL) applied for an order for additional damages under the Copyright, Designs and Patents Act 1988 s.97(2). PPL had previously granted Reader a licence to play its copyright-protected recordings in a club in Brighton. After he failed to renew the licence and the premises were unlicensed for two years, PPL obtained a court order to stop him from playing copyright recordings in public without a licence, but Reader did so in breach of the order, a clear contempt of court.

On the application to commit Reader for contempt of court, Reader said he intended both to pay the unpaid licence fees and to take a licence for the future. PPL claimed it had incurred substantial expense, both in seeking to induce Reader to take a licence and in policing his activities: those additional costs, PPL argued, could be recovered as additional damages under s.97. After all, it was Reader's deliberate refusal to obtain a licence that caused PPL to incur the expenditure, all of which was a foreseeable consequence of Reader's playing copyright recordings in public without a licence.


PPL: the claimant and its manifesto

Pumfrey J granted the application. He held as follows:
* The court had power award damages where a breach of an undertaking to the court or an injunction was also a breach of contract;

* An infringement of copyright committed in breach of an injunction to prevent it could support an award of additional damages (citing Sony Computer Entertainment v Owen [2002] EWHC 45 (Ch) -- for a note click here and scroll down;

* Where the underlying infringement was established to the standard required to support an application to commit for breach of an injunction, there was no arguable defence to a claim for copyright infringement. Reader's infringements were committed in breach of a court order, which made it appropriate to order either (i) an enquiry as to additional damages or (ii) a summary award of additional damages to the copyright owner;

* The expenditure in investigating Reader's unlawful activities was of a kind which could be recovered as damages for infringement;

* An award of statutory additional damages could include a punitive element, provided that the purpose of the award was not solely to punish the defendant (citing Nottinghamshire Healthcare National Health Service Trust v News Group Newspapers Ltd [2002] EWHC 409 (Ch));

* This was a case of deliberate and flagrant infringement. If it were appropriate to base an award of additional damages on the contribution of the infringements to the profitability of the club, there would be little alternative to an enquiry to establish that contribution. The court would therefore award additional damages, in addition to the costs of the enquiry agents, an amount equal to the licence fees unpaid down to the hearing of the application to commit.
The IPKat is most impressed. There was a time when it was almost impossible to squeeze additional copyright damages out of the courts, and it's also not so long ago that the IPKat was commenting on how lightly they treated applications for committal for contempt. But when the court's honour is impugned, the injured claimant's case for extra damages grows stronger. Merpel says, two years is a long time for an unlicensed club to carry on without being stopped. Wonder what went wrong?

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