Following a referral from the Polish Supreme Court, the ECJ ruled on January 25, 2017 (C-367/15) that damages for copyright infringement may be three times the amount of reasonable remuneration.
In particular, the Polish national regulation does not violate the Enforcement Directive(Directive 2004/48/EC on the enforcement of intellectual property rights).
Controversial Polish general clause
The dispute before the ECJ centered on the admissibility of a national Polish copyright regulation.
Under Polish law, authors can demand compensation from the infringer in the event of a copyright infringement, which amounts to three times the usual and reasonable remuneration. Furthermore, authors do not have to prove a connection between the copyright infringement and the specific damage incurred.
The requirement of “causality” between injury and damage, familiar from German law, does not have to be verified under Polish law.
Compatibility of double license damages with the Enforcement Directive
The ECJ ruled that the Polish standard is compatible with European law.
The European Court of Justice based its decision on the fact that only a claim for payment of reasonable compensation would not adequately compensate the author in the event of an infringement:
“Thus, in the case of an infringement of an intellectual property right, the mere payment of the hypothetical remuneration is not capable of guaranteeing compensation for all the damage actually suffered […]”
Although the payment of reasonable compensation compensates for the damage incurred, it does not compensate for the additional inconvenience caused. However, a compensation sum that is far in excess of the reasonable compensation may not be an abuse of rights.
Penalty surcharge: Compensation permissible as a penalty
The ECJ further states that recital 26 of the Enforcement Directive does not force the member states to create a standard in national law that legitimizes a penalty payment for copyright infringements.
Conversely, however, the ECJ also clearly states that the member states are not expressly prohibited from adopting such a legal regulation.
Admissibility of double damages for copyright infringements in Germany
The ECJ ruling does not only have an impact on Polish law. The decision also has considerable significance for German copyright law.
The author is entitled to be named as the author when their work is used. If such an attribution is not made, the injured party is regularly granted a surcharge of up to 100% (see BGH, judgment of 15.01.2015 – I ZR 148/13).
The reason for a surcharge in Germany is the lost advertising value. A 100 percent surcharge is only granted if the use of the work would have been advertising for the author. It is often argued that the surcharge comes close to a penalty payment that is not permitted under German law and is therefore inadmissible.
With the new ruling of the ECJ, this argument is likely to be invalid in future – at least at European level. The ECJ makes it very clear that it is not only lawful to double the damages, but even to triple them. And not just in terms of the lost advertising value, but also on the basis of a penalty payment.
Far-reaching impact of the ECJ ruling on German law
The ruling of the European Court of Justice should make it easier in future for German authors to obtain a claim for damages that is higher than the appropriate license. The rejection of high claims with reference to the inadmissibility of penalty payments will in any case be restricted in future.
As a result, the ECJ held:
‘Article 13 of Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights must be interpreted as precluding national legislation such as that at issue in the main proceedings. ‘Article 13 of Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights must be interpreted as not precluding national legislation, such as that at issue in the main proceedings, under which the holder of an infringed intellectual property right may require the person who has infringed that right either to make good the damage suffered, taking into account all factors relevant to the case, or, without having to prove actual damage, to pay a sum of money equal to twice the equitable remuneration which would have been payable for the grant of permission to use the work concerned.