PPL v Stephen Russel Reader

Date

22 March 2005

Legislation

s.97(2) Copyright Designs and Patents Act 1988

Keywords

Copyright; Infringement; PPL Licences; Contempt of Court; Flagrancy; Costs; Expenditure Not Recoverable as Costs; Additional Damages

Counsel

Gwilym Harbottle for the Claimant

Solicitors:

Hamlins for the Claimant

Judge:

Pumfrey J

Court:

High Court (Chancery Division)

Reported:

[2005] EWHC 416

Summary:

s.97(2) Copyright, Designs and Patents Act 1988 states:

"…the Court may in an action for infringement of copyright having
regard to all the circumstances and in particular to…

the flagrancy of the infringement, and

any benefit accruing to the Defendant by reason of the infringement

award such additional damages as the justice of the case may require."

In 1999 an order was made against the Defendant (D) restraining him from playing certain sound recordings in public without the Claimant’s licence. In 2004, D was then found to be guilty of contempt of court having been found to have played sound recordings covered by the afore-mentioned order through a DJ acting on D’s behalf/on his instructions at a night club. At the hearing for contempt the D indicated that he intended to pay off his licence fees and take a licence for the future. An order was made requiring D to pay the C’s costs on an indemnity basis. C, at the same hearing, applied for an order for additional damages for the admitted copyright infringement - this issue was put off until a later hearing, hence the reason for the hearing on 22 March 2005.

The basis for the Claimant’s application for additional damages was that since the said night club had been open for a period of almost 2 years without a PPL licence, PPL had incurred substantial expenditure in seeking to induce the D to take a licence and in policing his activities. It argued that such expenditure was of the kind which can be recovered as damages and also justified on the basis that it reflects the benefit that the D got from running a club for 2 years without a licence.

Decision

Held:

• The Court has the power to award damages where a breach of an undertaking to the court also amounts to a breach of contract. An infringement of copyright committed in breach of an injunction restraining such an infringement can found an award of damages. Therefore, the circumstances render either an enquiry as to additional damages or, in a proper case, a summary award of additional damages to the copyright owner.
• Expenditure by PPL in investigating the D’s activities falls squarely within the principles that expenses incurred which cannot be recovered as part of the costs of the action but which are reasonably foreseeable consequences of the D’s acts of infringement.
• It is permissible for an award of statutory additional damages to include a punitive element provided the purpose of the award is not solely to punish the D. In the present case there had been a deliberate and flagrant infringement.
• In certain cases such as the present, a broad brush approach can be adopted allowing a sum equal to the licence fees unpaid down to the hearing of the application to commit to be awarded as a additional damages as a means of reflecting the contribution of the infringements to the profitability of the club.

The Judge therefore ordered as additional damages:

• the Costs of the Enquiry agents;
• a sum equal to the unpaid licence fees down to the date of the application to commit the D for contempt of court.