Wednesday, 27 July 2011

Quantum of damages for copyright infringement: which jurisdiction?

The decision of the UK's Supreme Court today in Lucasfilm Ltd, Star Wars Production Ltd and Lucasfilm Entertainment Co Ltd v Ainsworth and Shepperton Design Studios Ltd (judgment here; IPKat note here; shorter note on the 1709 Blog here) has already received plenty of coverage.  We all now know that a Star Wars Stormtrooper helmet is not a "sculpture" for the purposes of UK copyright law and that Lucasfilm is entitled to bring proceedings in a British court in respect of claims of infringement of US copyright law.

Arising out of this is one small aspect, not so far covered elsewhere, which is troubling me.

Presumably, when any copyright owner is deciding whether to sue for infringement and seeks damages, the cost-effectiveness of making the claim will determine whether it is worthwhile to do so. Thus an expensive action to recover a small sum makes little or no sense while the expectation of sizable compensation makes the litigation a more appealing business proposition.

What I don't know, and therefore hope readers can advise me on, is this: where a British court applies the test of infringement of copyright under US law in respect of an act committed in the US, is it also bound to apply the US scale of damages -- which appears to be vastly more generous than the sort of damages awards made in the UK for infringement of UK copyright within the UK -- or does it assess liability by reference to US law and then calculate damages on its own local principles?  Can anyone point to a clear rule or judicial authority which establishes how quantum is calculated?


Chris Hayes said...

This may be useful starting point for thinking about quantum in the US.

Graham Smith said...

The answer is in the Rome II Regulation on the Law Applicable to Non-contractual Obligations.

This would apply to a US copyright claim in the UK courts by virtue of Article 3: "Any law specified by this Regulation shall be applied whether or not it is the law of a Member State."

The assessment of damages provisions are in Art 15(c) and Recital (32).

Art 15(c):

"The law applicable to non-contractual obligations under this Regulation shall govern in particular:


(c) the existence, the nature and the assessment of damage or the remedy claimed;"

The consequences of applying US law to assessment of damages as a result of Art 15)(c) can by ameliorated under Recital (32):

"Considerations of public interest justify giving the courts of the Member States the possibility, in exceptional circumstances, of applying exceptions based on public policy and overriding mandatory provisions. In particular, the application of a provision of the law designated by this Regulation which would have the effect of causing noncompensatory exemplary or punitive damages of an excessive nature to be awarded may, depending on the circumstances of the case and the legal order of the Member State of the court seised, be regarded as being contrary to the public policy (ordre public) of the forum."