A Spanish Supreme Court decision of 12 January 2015 referred a question to the Court of Justice
of the European Union (CJEU) for a preliminary ruling concerning the
implementation of Directive 48/2004 (the IP Enforcement Directive) in Spain and in particular the
relationship between compensation for damage by means of a lump
sum in the form of hypothetical licence royalties and damages for the restoration of moral prejudice.
The
question was this:
Can Article 13(1) of Directive 48/2004 be interpreted as meaning that the party
injured by an intellectual property infringement, claiming compensation for
damage based on royalties or fees which would have been due if the
infringer had requested authorization to use the intellectual
property right in question, also request compensation for the moral damage caused?
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Dos patrias, Cuba y la noche |
This question arose from an action brought by Mr Christian Liffers against Producciones Mandarina, S.L.
and Gestevisión Telecinco, S.A. Mr Liffers was the director,
screenwriter and producer of the audiovisual work titled in Spanish “Dos
patrias, Cuba y la noche”. This work told the private and intimate stories
of Habana's inhabitants, whose common characteristic was their
homosexuality and their transsexuality. Mandarina, a Spanish company, released an audiovisual documentary
about children prostitution in Cuba, including unauthorized
fragments of Liffers' work, this documentary being subsequently broadcast by Spanish TV company Telecinco.
Mr.
Liffers successfully claimed before the Court of Madrid that Mandarina and Telecinco had infringed his author's rights in
“Dos patrias, Cuba y la noche”. He obtained an order that the defendants
both cease the infringement and pay economic damages of 3,370 euros together with damages for moral prejudice of 10,000 euros. In determining the economic damages, the plaintiff applied
the criteria of the lump sum with reference to hypothetical licence
royalties according to the scale of Egeda (the Spanish collective society
for audiovisual producers) while, for the moral prejudice, he took into
account the type of the infringing work –- a documentary on child prostitution –- and the audience share, which amounted to 13.4%.
 |
Producciones Mandarina |
On appeal, the Madrid Court of Appeal reversed the first
instance decision, holding that compensation for the moral prejudice was
incompatible with compensation for damage based on the licence
royalty criteria, in the light of Recital 26 and Article 13 of
Directive 48/2004: they both set forth exclusive options as between the
reparation of actual damage [intended as the negative economic
consequences, lost profits included, which the injured party suffered
and the unfair profits made by the infringer] in connection with the
moral prejudice, on the on hand, and licence royalties when the amount of
damages would be difficult to determine, on the other. The Court of Appeal added that the framework for damages
compensation provided in Article 13 had been implemented in Article 140 of the Spanish Intellectual Property Law (TRLPI). Accordingly it revoked the moral prejudice
award.
 |
Telecinco |
Mr Liffers' argument that the
recovery of damages for moral prejudice must be independent of criteria for compensatory damages –- based either on actual damages or hypothetical royalties -– then came before the Spanish Supreme Court. This Court particularly emphasised that such compensation must be proportionate
to the actual prejudice, as required by the wording of Article 13(1). So, the Court wondered, when a choice has to be made in favour of a lump sum in the form of licence royalties which excludes damages for moral prejudice, how was it possible to
provide effective compensation for infringement if, as was the case here, the moral prejudice was greater than the
economic damages?
The
Supreme Court recalled that Recital 10 of Directive 48/2004 sets
the basis for harmonised enforcement of IP rights in the EU:
'The
objective of this Directive is to approximate legislative systems so
as to ensure a high, equivalent and homogeneous level of protection
in the internal market.'
That
said, as pointed out by Mr Liffers, in a sensitive matter like compensation for damages, which is a leading issue when its comes to
litigation and which has practical consequences wherever forum
shopping is permitted, the scope of Directive 48/2004 can be hampered
if lower protection was afforded by the Spanish courts in the
light of the restrictive interpretation of Article 13(1) of the Directive than that given in other Member States. As the
Supreme Court reported, in Germany, Italy and France, although a
plaintiff still has to chose between the two alternative criteria for
the determination of damages cumulatively, the recovery of damages for moral prejudice can be claimed in either case.
Now it is over to Luxembourg, so let's wait and see what happens.
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