The plaintiff in a legal dispute decided before the Hamburg Higher Regional Court is the owner of exclusive rights of use to map material available on the Internet. It offers companies and private individuals the opportunity to acquire rights to use map extracts for their own purposes. The calculation of license damages for use without permission is of central importance in such cases.

Calculation of license damages for the use of maps as advertising material

However, the later defendant apparently did not want to make use of this offer. In order to advertise a real estate offer on a well-known Internet portal, it made two map sections of the plaintiff publicly accessible on the Internet. She did not have a license for this. The owner of the rights of use then demanded that the two map excerpts be made publicly accessible and that license damages be paid. In cases of unauthorized use, license damages ensure that the rights holder is compensated for the lost license fee and at the same time a kind of “penalty” is achieved to prevent future infringements.

The defendant issued a cease-and-desist declaration with a penalty clause and paid € 300 in damages. However, the parties then declared the legal dispute only partially settled. Instead, the plaintiff extended her claim for license damages by a further € 1,220 plus interest. She based this claim on the principles of the so-called license analogy, which is often applied in copyright cases. According to this, the amount that the plaintiff usually demands for lawful use to the extent in question here is to be paid as license damages.

Scope of license damages insufficient in plaintiff’s view

The plaintiff considered the damages paid to date to be insufficient and pointed out that the corresponding prices for the licenses were fixed by general terms and conditions and were not negotiable for the licensee. This was evident from 200 contracts, some of which had been concluded completely freely, others after prior warning. The prices were also customary in the market compared to the prices of similarly positioned card publishers. The license damages are not only intended to cover the financial loss, but also to prevent an infringement of copyright from remaining economically attractive for the infringer.

However, the corresponding application was rejected by the competent regional court, whereupon the owner of the map material appealed to the Hamburg Higher Regional Court. However, she was not successful with this either: in their ruling of 4 March 2021 (case reference: 5 U 81/15), the Hamburg judges ruled in her favour to the extent that the claim for license damages is based on the amount that the infringer would have had to pay as reasonable compensation if he had received permission to use the infringed right.

License rates in post-licensing agreements unsuitable for calculating damages

However, in the opinion of the court, the plaintiff’s reference to the price list for licenses in its general terms and conditions is not sufficient to determine a customary license fee. According to the Higher Regional Court of Hamburg, the license fee must be based on actual market prices and not on internal price lists that may not be in line with the market. The submission of the price list does not prove that such prices can also be enforced on the market. This is supported above all by the fact that the majority of the contracts submitted were concluded after the assertion of claims for infringement. Accordingly, it is decisive for license damages that the asserted license rates are actually customary in the industry and enforceable in court.

The Higher Regional Court of Hamburg thus follows the case law of the Federal Court of Justice, according to which license rates in post-licensing agreements are generally unsuitable for the calculation of license damages. For rights holders, this means above all that the enforcement of claims for damages on the basis of the so-called license analogy is made more difficult. This is because if the infringed party cannot prove a corresponding contractual practice, it usually comes away empty-handed.

Conclusion: Importance of customary market practice for license damages

This ruling clearly shows how important the traceability and market conformity of license claims is in connection with royalty damages. Companies and creatives who want to protect their intellectual property should ensure that their license prices are realistic and demonstrably in line with the market in order to be able to successfully assert claims in the event of infringement. Royalty damages serve not only as compensation, but also as deterrence and prevention, which makes them an important tool in copyright law.