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This article has been written by Ashutosh Singh, a student of BA.LLB (Hons), at Amity Law School, Amity University Kolkata. The article is a comparative study of the US and UK copyright and trademark laws concerning the award of damages for infringement and other violations.

Introductions

Copyright laws protect unauthorized use or theft of intellectual property of creators. However, the United States Copyright Office states that ‘international copyright’ does not exist and an author’s work does not automatically get protected throughout the world. The national laws of a country have rules that will protect against unauthorized use in a particular country. But some countries are signatory to copyright treaties or conventions and they provide some international protections conditionally. Many countries have integrated these international laws into their national law.

Let us now look at and compare the copyright and trademark laws in the two countries US and UK respectively concerning damages as remedies to infringement.

The United States(US) copyright protection

In the United States, the copyright law is represented in federal laws enacted by Congress. The Copyright Act of 1976 (amended), is codified in Title 17 of the US Code and is the current copyright law in the United States. The US law states that a copyright is established when the author creates work for the first time. This work must be original and it may be fixed in any tangible medium of expression by its creator.

This effectively means that the work may be seen or communicated either directly or by some form such as a device. However, the copyright protection extends to the specific form in which the intellectual property exists as different versions, and it may have separate or different copyright protection.

Copyrightability

Every time a work is created like a story, poem, paper, drawing, or any other work, the creator of the work will automatically own the copyright of the said work. Copyright is that form of protection given to a creator or author of original work of authorship which includes dramatic, literary, artistic, musical, and other intellectual works. The copyright law grants the copyright holder the control of certain uses of their work that have been protected by copyright law. The copyright law also grants users the right to make certain usage of their work without permission. For a work to be eligible for copyright protection, a work must be:

  • Original: The work must be created independently to get qualified as original and must have a certain degree of creativity.
  • A work of authorship: The works of authorship include literary works, musical works, pictorial and graphic works, sculptures, sound recordings, audio-visual works, and many other types of creative work.
  • Fixed: Under the authorization of an author, a work can be fixed in a tangible medium of expression. If a work is written on a computer hard drive or on paper or recorded on a tape or sculpted work out of marble, all the conditions mentioned would satisfy the requirement. An unrecorded improvisation of work like in dance or music would not satisfy the requirement.

Works protected by copyright

In the US and generally, worldwide, copyright protects original works of authors that are fixed in a tangible form of expression. This work must be original and it may be fixed in any tangible medium of expression by its creator. Copyrightable works fall into the following categories: 

  1. Literary work which also includes computer software
  2. Dramatic work which also includes any accompanying music
  3. Musical work which also includes any accompanying words or lyrics
  4. Graphic, pictorial, and sculptural work
  5. Pantomimes and any choreographic work and pantomimes
  6. Audio-visual work and motion picture
  7. Sound recordings
  8. Architectural works

Works not protected by copyright

US copyright does not protect:

  1. Any idea 
  2. Procedure
  3. Process system
  4. Method of operation (such as making things, business procedures, or operations)
  5. Scientific or technical approaches
  6. Mathematical principles, algorithms, and formulas
  7. Other concepts, principles, or discovery
  8. It also does not protect works prepared by an officer or employee of the US Government as part of that person’s official duties (federal statutes and judicial decisions, speeches, press releases, and reports)

The US Copyright Laws do not safeguard the ideas but the expression of ideas is protected under it as ideas are works that do not exist in tangible form. It is illegal for anyone to do any of the things listed above with a work created by the original author without their permission, but there are some exceptions and limitations to the rights of a copyright holder. One major limitation is the doctrine of ‘Fair Use’.

Castle Rock Entertainment v. Carol Pub. Group, Inc.,(1998)

This case raises interesting issues of copyright law in the US that are:

  • If ‘The Seinfeld Aptitude Test’, (a trivia quiz book) is used to test the knowledge of its readers about some scenes and events from the fictional television series ‘Seinfeld’, does it lift sufficient protected material from the original to cause copyright violation? The issue arises because of a great similarity of the book to the television series, such that, without any defences, the book would infringe the copyright in Seinfeld. 
  • Does ‘The Seinfeld Aptitude Test (also referred to as the SAT) form a fair use of the Seinfeld television series?

The District Court, in this case, held that a book of trivia questions about the Seinfeld TV series was not fair use. This despite the book being transformative but the TV series was a work of fiction and hence conferred special status under copyright law. The book had important elements of the TV program and gained a market for a derivative work that the copyright holder was entitled to control and had not given permission for. 

Monster Communications, Inc. v. Turner Broadcasting System, Inc, (1996)

In the movie biography of Muhammad Ali, the makers used 41 seconds of a video of a boxing match in their biography. The important factor to be considered here is that a small portion of the film was taken but the purpose was informational. Muhammad Ali was a public figure and much revered by his fans the world over and hence the biography on Muhammad Ali was the subject of public interest. In this case, the US District Court, S.D. New York said that the use of up to 14 film clips of historical footage, each between 41 seconds and less than two minutes long in the TV biography amounted to fair use.

Copyright infringement and its remedies in the US

Some of the provisions regarding copyright infringement and its remedies are given in the following sections of the Copyright Act of 1976.

  1. Section 501: It has provision for infringement of copyright where it defines infringer of copyright.
  2. Section 502: Remedies for infringement: It has provision for ordering injunctions by any court having jurisdiction of a civil action granting temporary or final injunction to prevent or restrain infringement of copyright.
  3. Section 503: Remedies for infringement: This provision gives the court powers to impound allegedly infringing articles during the time an action is pending, and to order the destruction or other disposition of articles found to be infringing.
  4. Section 504: This section has provisions for different remedies available such as damages and profits in case of infringement of copyright. 
  5. Section 505: It has remedies for infringement such as costs and attorney’s fees.

Infringement

An infringer is any person who violates the copyright owner’s exclusive rights as given under Section 501 of the United States Copyright Act. One has to prove copyright infringement, by showing the following: 

  1. That the alleged infringer copied from the original author’s work, either by actually copying the original work or by having the original’s work in mind when the defendant composed his work.
  2. If the taken/lifted work has too many elements copied by the defendant and it amounts to too much in terms of quantity and significance such that the audiences for the two works see a lot of similarities between the defendant’s work and the protected elements in the original author’s work.

Fourth Estate Public Benefit Corp. v. Wall-Street.com, (2019)

However, Title 17, United States Code, Section 411(a) states that the work has to be registered with the U.S. Copyright Office for a civil action or a lawsuit to be enforced for a copyright claim. In 2019, the U.S. Supreme Court in the case Fourth Estate Public Benefit Corp. v. Wall-Street.com, 2019, ruled unanimously that a copyright infringement suit cannot take place till the copyright is registered successfully by the United States Copyright Office. Also, Section 411(a) mandates that a lawsuit cannot be initiated merely on the copyright office receiving the application, but the application has to be processed as well.

Damages

Apart from injunctions, a copyright holder can also seek monetary damages. One can have both injunctions and damages, or only damages, or only injunctions. Section 504 has provisions for remedies for infringement that is damages and profits. It provides the copyright owner a choice of recovering damages by way of: 

  1. Their actual damages 
  2. Any additional profits of the defendant
  3. Statutory damages

Actual damages

Actual damages are the losses that the original copyright owner suffers as a result of the infringement such as sales that are lost, profits that are lost, licensing revenue, or any other evident monetary loss as a result of the infringement. An estimate of losses incurred due to the infringement is simply not enough. They should be calculated based on measurable numbers. Sometimes expert witness testimony becomes necessary to ascertain the measure of damages and explain that the damages were caused by the infringement. 

Additional profits of the defendant

Sometimes, the profits earned by the infringer from the copyrighted material may exceed those earned by the owner. In such situations, the copyright owner is entitled to recover the infringer’s profits if he/she can establish a connection between the profits and the infringing use.

Statutory damages

Statutory damages are unique to US copyright law. In other countries, the claims for damages in civil actions are usually limited to the copyright owner’s actual damages and sometimes the infringer’s profits. A minimum and maximum amount for the actual damages are prescribed by some foreign laws and some also provide for punitive damages, the amounts of which depend on the defendant’s intent to infringe. Statutory damages are provided alternatively to actual damages and profits. However, the plaintiff is eligible to seek statutory damages if the copyright was registered either:

  1.  Within three months of publication, or 
  2.  Before the infringement.

The statutory damage amounts, as the name suggests, have fixed limits and they are outlined in the Copyright Act and may be awarded by a judge or jury. These are a more popular choice given the difficulties that can arise in proving actual damages and infringer’s profits. The court can award statutory damages within the range of $750 to $30,000, but this can be lowered if the infringement is believed to be unintended, or increased appreciably if the infringement is proved to be willful. There are, however, situations where statutory damages are not available as given in Section 412 of the US Copyright Act, 1976. They are: 

  • They are not available for unpublished work and if the infringement began before the effective date of its registration.
  • They are not available when although the work is published, the infringement occurred after the first publication and before the actual date of its registration. Also, the registration should have been done within three months after the first publication.

Lowry’s Reports, Inc. v. Legg Mason Inc, (2003)

Damages in copyright cases can be very high. As became evident from the case in Lowry’s Reports, Inc. v. Legg Mason Inc., (2003), a lawsuit was filed by a stock analysis newsletter’s publisher against a company that bought one copy of the newsletter and made several copies for use internally. The jury awarded actual damages for some newsletters and statutory damages for the other newsletters amounting to a whopping sum totaling $20 million.

Gamma Audio & Video, Inc. v. Ean-Chea, (1993) 

The First Circuit, in this case, verbalized the Independent Economic Value Test. The exclusive licensee of videotape recordings of television programs ‘Jade Fox’ filed suit for copyright infringement against a video rental store operator to pay the plaintiff an amount of $2,500 in statutory damages for one work that the operator had infringed copyrights for the original recordings of the television programs for which the plaintiff licensee had exclusive rights to distribute. Because the plaintiff licensee had exclusive rights the Court said that the plaintiff was entitled to recover statutory damages from the defendant-store operator. But the Court of appeals subsequently reversed the District Court’s finding as to the number of works infringed. 

The District Court, in this case, found that the defendant store operator had infringed one work although it comprised of four episodes of the television program, ‘Jade Fox’ to calculate on two facts: 

  • The Plaintiff licensee sold/rented only complete sets of ‘Jade Fox’ to the defendant store holder and so accordingly the court inferred that the plaintiff regarded ‘Jade Fox’ episodes as one work for economic purposes notwithstanding the rental by customers of only a few episodes at a time. 
  • Also, the copyrights for the four episodes of ‘Jade Fox’ in question were registered with the Copyright Office that considered these four episodes to be one. 

The First Circuit could not find any supporting authority for the district court’s conclusion that registering multiple works with the Copyright Office on a single form equates to registering a single work for purposes of awarding statutory damages. The language of the Copyright Office’s regulations concerning a copyright holder did not mention that a copyright holder may forfeit the option of recovering statutory damages for infringement, if it registers multiple works on a single form as a single work for registration. The First Circuit, however, counted each episode of ‘Jade Fox’ as a single/separate copyrighted work and said that the defendant had infringed four works and not merely one. 

Playboy Enterprises, Inc. v. Sanfilippo, (1998) 

Playboy Enterprises, Inc. operated a website through which they provided and sold access to thousands of unauthorized copies of the plaintiff’s photographs which were copyrighted. The defendant party in their defence said that they were liable for infringing only one copyrighted work because the images which were copyrighted appeared as a collection in only one of the plaintiff’s copyrighted magazines. The court rejected this argument of the defence, finding the defendants guilty of 7,475 incidents of copyright infringement, and the plaintiff recovered statutory damages for $500 for each infringed work totaling about $3,737,500.

Cost and Attorney’s fees

Section 505 of the Copyright Act, 1976 permits courts to have the discretion to award costs against either party and to award practical attorney fees to the party that is prevailing. The court may or may not award reasonable attorney’s fees to the prevailing party. This is equally applicable to a winning plaintiff/copyright owner and a winning defendant/accused infringer. However, attorney’s fees are not awarded against the government. Like statutory damages, it is mandatory that the work infringed is registered at the time of infringement to be eligible for the award of attorney’s fees, except for infringement of a published work registered within 3 months of its first publication.

Fogerty v. Fantasy, (1994)

The Copyright Act of 1976, 17 U.S.C. Section 505 has provisions for the award of a reasonable amount of cost and attorney fees to either party. However, the question that arose in this case was about the standards that should inform a court’s decision to award attorney’s fees in a copyright infringement suit to a prevailing defendant. Despite Forgery’s effective defence justification of a copyright infringement action filed against him by Fantasy, Inc., the District Court refuted his motion for attorney’s fees. 

However, the Supreme Court adjudged that the Court of Appeals had erroneously held the prevailing defendant to a more stringent standard than that applied to a prevailing plaintiff. On this acceptance, the SC reversed and remanded the Court of Appeals decision.

The US Trademark protection

In the United States, trademarks unlike copyrights are not automatic and generally have protection in the country, if registered in the US. Trademark rights in most countries are gained by registration in that country and this is known as ‘First to File’. However, in the US, as in the UK, whoever first uses it in commerce gets the ownership of the trademark, and this system is known as the ‘First to Use’.

Therefore, if a dispute arises between the author and another party over a trademark, then whoever used it first commercially will own the right, even if it was not registered. Registering a trademark provides many benefits, including: 

  1. Publicly declaring ownership of the trademark. 
  2. Helping the author register his trademark in other countries. 
  3. Helping the author to bring legal action to the Federal courts and prevent infringing material from being imported. 
  4. Allowing the author to use the registered trademark symbol (®) with the authors’ trademark.

Trademark law has governed the use of a device through a manufacturer or merchant to identify the goods and distinguish them from those goods that are sold by another company. In the United States, certain common law trademark rights are simply from the use of a mark. So, to obtain the protection of a mark, it is feasible to register the mark with the federal government or state government. A mark that is registered with the federal government should be marked with the ® symbol. Unregistered trademarks should be marked with a ‘™’.

Trademark infringement

A mark is infringed under U.S. trademark law when another person uses a mark to confuse as to the source or sponsorship of the goods or services involved. Multiple parties can use the same mark only where the goods of the parties are not so similar to cause confusion among consumers. When the mark is protected only under the common-law trademark rights, those same marks are used where there is no geographic overlap in the use of such marks. Federally registered marks have a nationwide geographic scope which means that they are protected throughout the United States. 

One can also say that trademark infringement is the unauthorized use of a trademark/service mark concerning goods and/or services in a manner that is likely to cause confusion, cheating, or mistake about the source of the goods or services. A trademark owner who believes a mark is being infringed may file a civil action in either state court or federal court for trademark infringement, depending on the circumstances. In most cases, the trademark owners prefer to sue for infringement in a federal court. Although the plaintiff chooses the state court, the defendant may have the case removed to federal court. If the trademark owner can prove infringement, then the available remedies to him/her may include the following: 

  1. A court order (injunction) that the defendant should stop using the accused mark.
  2. An order is required for the destruction or forfeiture of infringing articles. 
  3. Monetary relief given which includes the defendant’s profits, any damages incurred by the plaintiff, and the costs of the action. 
  4. An order that the defendant, in certain cases, pays the plaintiffs’ attorneys’ fees. 

Damages as trademark infringement remedy

A trademark owner may recover the following categories of monetary damages under the Lanham Act, 1946

  1. Disgorgement of the defendant’s profits 
  2. Actual damages 
  3. Reasonable royalty 
  4. Attorneys’ fees, costs, and exceptional cases 

The Lanham Act (also known as the Trademark Act of 1946) has language and text that are not very clear about the monetary damages available and provide little guidance on the subject. However, it grants a wide choice to the courts to decide an appropriate remedy. Generally speaking, trademark infringement lawsuits mostly result in injunctive relief to stop the infringement rather than an award of monetary damages to stop the infringement. The Lanham Act is compensatory, rather than punitive. Section 1117(a) says clearly that there is no automatic entitlement to an award of monetary damages in a trademark infringement suit given to the principal plaintiff. To be eligible for such an award, proof has to be given of actual confusion or unjust enrichment.

Disgorgement of Profits as Alternative to Infringement Damages

Disgorgement of the infringer’s profits is one of the potential measures of damages under the Lanham Act. This is achieved through: 

  • Disgorgement of unjustly obtained profits. 
  • Using the infringer’s profits as a measure of the plaintiff’s loss (proxy theory). 

Spin Master Ltd. v. Zobmondo Entertainment, LLC (2011)

The Proxy theory of profits is based on the idea that had it not been for the infringement the diverted sales from it would have gone to the plaintiff. This theory aims to compensate the plaintiff for sales that he has lost as a result of his customers being diverted to the infringer. The plaintiff and the infringer must be direct competitors for the plaintiff to recover infringement damages under this theory. To prove willful infringement is not a prerequisite for a plaintiff seeking the defendant’s profits as a measure of his damages, under this theory. In this case, the California federal jury held the defendant (Zobmondo Entertainment LLC)liable and an infringer of the trademark with its “Would you rather…?” series of books, board games, and other products. The federal jury awarded Spin Master Ltd. with an amount of $8.6 million in compensatory and punitive damages.

Actual damages

The plaintiff under Section 1117(a), can recover both the defendant’s profits, owing to infringement and also the plaintiff’s actual damages but this provision requires proof of the genuine confusion that caused an economic loss. The proof of confusion is often presented through evidence of diverted sales or consumer survey evidence and also the economic loss is often demonstrated through lost profits. Loss of goodwill is ascertained by comparing the value of goodwill before and after the infringement. A trademark owner can prove this customer confusion by showing evidence of diversion of sales or presenting survey results that determine actual customer confusion with the mark’s true owner. The federal court has also got the discretion to award actual damages in the form of a trademark licensing fee that the defendant should have paid to the plaintiff rather than infringing the plaintiff’s mark. Depending upon the circumstances of an individual case, courts may award enhanced damages up to treble the number of actual damages as proved by the plaintiff.

Riddell, Inc. v. Schutt Sports (2010)

In December 2008, Riddell filed a lawsuit against Schutt within the Western District of Wisconsin. In Riddell, Inc. v. Schutt Sports Inc., (2010), the manufacturer claimed infringement of its jaw flap patents, false advertising under Section 43(a) of the federal Lanham Act, Section 1125(a), trade libel, and products denigration. In response to this, Schutt brought counterclaims for false advertising under the Lanham Act, and deceptive trade practices under the Wisconsin Trade Practices Act, 2017 The District Court, however, addressed the patent infringement claim in a separate opinion. This case focuses on the Court’s decision as to the claims of false advertising and deceptive trade practices, for which the District Court finally ruled in favour of Riddell, saying that there was no evidence found or proved that Schutt suffered any injury from those advertisements. 

Reasonable Royalty 

A ‘Reasonable Royalty’ is another alternative measure of actual damages that is a measure of compensation for past infringement that is based on a reasonable value of a trademark license that the infringer should have paid in the first place. When permitted, the courts usually calculate a reasonable royalty based on the Georgia-Pacific factors found in Georgia-Pacific Corp. v. United States Plywood Corp., (1970) which depends on: 

  • The nature and scope of a licensee’s use
  • The special value to the infringer
  • The amount that a reasonable licensee would be willing to pay
  • The profitability of infringing use
  • The lack of feasible substitutes to calculating damages
  •  The expert opinion

Attorneys’ fees, costs, and exceptional cases

The Lanham Act also permits a prevailing party to recover his/her attorneys’ fees in select cases. Section 1117(a), does not define these select/exceptional cases. The courts have instead held that a prevailing plaintiff may recover attorneys’ fees when it is proved that the infringement is fraudulent, deliberate, willful, and malicious. Even the prevailing defendants are allowed to recover attorneys’ fees in instances where the plaintiff’s conduct lacks merit or he/she shows elements of an abuse of process, or knowingly increases the costs of defending the lawsuit. In such cases, the courts typically limit the recovery of any costs to those that are filing fees, witness fees, court reporting fees, but not attorneys’ fees.

Romag Fasteners, Inc. v. Fossil Group, Inc.(2020)

The U.S. Supreme Court rules on damages for trademark infringement in the case, Romag Fasteners, Inc. v. Fossil Group, (2020), and it has become easier for the plaintiff to collect monetary damages. The SC, in this case, held that since the federal trademark statute did not particularly list willfulness as a required condition for money damages, courts cannot impose this as a condition for obtaining such damages.

There are important takeaways from the Court’s decision:

  1. The Court did not go to the full length on this to state that monetary damages will be applicable each time, explaining that the defendant’s mental state is a very important factor in determining whether an award of profits is suitable here.
  2.  Before this judgement, the businesses accused of infringement could simply discontinue the use of a trademark if they encountered an infringement challenge from a brand owner. 
  3. However, businesses adopting a new trademark will now face the concern that they could be subject to money damages if they encounter an infringement challenge from a brand owner. 
  4. Proper trademark searching and clearance can help minimize the risk of facing such a challenge.

The United Kingdom (UK) copyright protection

According to the copyright law of the UK, a work is considered original if the creator uses labour, skill, and judgement, to create it. Copyright generally lasts for the lifetime of the author plus 70 years. After that, the work is in the public domain and it may be re-used for free without the need to get permission from the copyright owner. So, to get the benefit from the copyrighted work, the work should be the author’s own, the author should have used his labour, judgement, skill, and effort to make sure that the work created is original. It must be in a relevant medium and be in a fixed form. 

Copyright law in the United Kingdom originated from the concept of common law, the Statute of Anne, 1709. After the passing of the Copyright Act of 1911, it became statutory. The current act is the Copyright, Designs and Patents Act of 1988. The law gives creators of dramatic, musical, literary, sound recordings, artistic works, films, broadcasting, typographical arrangement of the published editions, and the right to control how their material should be used.

In the UK, copyright arises automatically when a work is fixed. There is no registration procedure. For copyright protection to be given to a work, it must be original and not copied from someone else’s work. Copyright is a commodity that can’t be sold, licensed, or left to the will of the author. The legal framework has been laid out in the Copyright, Designs and Patents Act, 1988.

Duration of copyright

They are as follows:

  • Written, dramatic, musical, and artistic work: 70 years after the authors’ death.
  • Sound and music recording: It lasts for 70 years from when it was first published.
  • Films: It lasts for 70 years after the death of the composer, screenplay author, and director.
  • Broadcasts: It lasts for 50 years from when it was first broadcasted.
  • A layout of published editions of the written, musical, or dramatic works: It lasts for 25 years from when it was first published.

Infringement of UK copyright

Copyright is infringed by:

  • Making copies of the work.
  • Making available copies of the work to the general public.
  • Renting/lending the copyrighted work to the general public.
  • Performing, showing, or playing the copyrighted work in public without permission from the owner.
  • Communicating the work to the general public.
  • Adapting the work in some form or doing any of the above to an adaptation.
  • Authorizing any of the above acts mentioned in any manner to the copyrighted work.

Based on the above infringing acts, civil and criminal liability may be imposed on those who knowingly deal with infringing copies of a copyrighted work in the course of trade.

Exceptions to infringement

There are a lot of exceptions given under the UK copyright, in the form of the permitted acts. These exceptions allow limited use of copyright works for a specific purpose without the permission of the copyright owner.

Fair dealing

Fair dealing is mentioned in Sections 29 and 30 of the Copyright, Designs, and Patents Act 1988. A statutory definition of fair dealing does not exist but the Act outlines three instances where fair dealing is a legitimate defence. They are as follows:

  • If the use is concerning research or private study.
  • If the use is concerning criticism, review, or quotation. 
  • Where its use is concerning reporting current events. 

Fair dealing is always a matter of fact, degree, and interpretation in every fair use case. There is no percentage or quantitative measure to justify fair dealing in a case. The Intellectual Property Office lists the following key criteria used to determine if a work is fair:

  • The first issue is if the use of the copied work impacted negatively on the market for the original work so that the creator of the original work lost potential revenue through the reuse of their work? If yes, then this is not considered fair use.
  • The second issue is if it was justified and necessary to use the amount of work that was taken? 

Hyde Park Residence v. Yelland, (2000)

Fair dealing can be used as a defence only when a claimant has established that copyright has been infringed and the onus to prove falls on the defendant that one of the exceptions applies. For this, it has to be established that the infringement falls within one of the three categories, which are liberally interpreted by the courts. The court doesn’t consider what good the infringer thought his work was for. As in this case, the court did not think it necessary to put itself in the shoes of the infringer of the copyright. This is to ensure that future infringers don’t think that fair dealing as an exception is easy. 

Disability Exception

The exception allows a copyrighted work to be copied into an available format for individuals who are suffering from disabilities. Any disability which has limited the access of the copyrighted work is found in Sections 31A and 31B of the Act (Copyright and Rights in Performances (Disability) Regulation’s act, 2014).

It covers all types of copyright work. The main restriction of this version is that, if the said format is already available, then the author should take the copy. 

Parody, caricature and pastiche

This is an exception to the copyright which permits people to use a limited amount of copyright material without the owner’s permission for parody, caricature, or pastiche. For example, a comedian may use a few lines from a song or film for a parody sketch, a cartoonist might use a well-known artwork or illustration for a caricature, and an artist might use small pieces from a range of films to compose a large pastiche artwork. This exception only permits the use of parody, pastiche, or caricature to the extent that it is fair dealing.

Remedies available against infringement

Copyright infringement remedies include: 

  1. Injunctions: To get an injunction, the person bringing the claim can apply for an interim injunction. This will prohibit the alleged copyright infringer from any further copyright infringement pending the trial of the case. However, to obtain an interim injunction, the claimant must satisfy the court that there is a grave issue to be tried, and that damages would be an insufficient remedy.
  2. Damages: In a copyright violation case, the claimant usually seeks damages from the defendant, usually in addition to an injunction. The courts in the UK are currently applying the ‘user principle’ in assessing claims of damages. 
  3. Delivery up: The defendant will be ordered to return the infringing material to the claimant, and usually the destruction of the infringing material will be ordered.
  4. Seizure: Where infringing material is sold/rented out, the copyright owner has the right to seize the infringing material or authorize another person to seize it on their behalf. However, some restrictions and conditions must be complied with, including giving notice to the police.
  5. Forfeiture: Before ordering forfeiture of the infringing material the court must be satisfied that an offence has been committed and once an order is given the material must be destroyed in compliance with the order. 
  6. Prevention of importation: On suspicion that infringing copies may be imported into the UK a copyright owner of published literary, dramatic, or musical work can give written notice to the Commissioners for HM Revenue and Customs that they are the rightful copyright owner. After that, they need to put in a request that the prohibited goods be treated as printed copies of the work for a period specified in that notice which cannot exceed 5 years.
  7. Undertaking to take licence: A defendant can take a licence permitting them to reproduce the work. In that case, an injunction or order for delivery up cannot be made. 

Damages in case of infringement

Where the infringement of copyright takes place, the Act gives the copyright owner the choice of seeking either an account of profits or damages. However, there is a fundamental distinction between these styles of monetary relief. An account of profits is awarded on the basis of the infringer’s gains which he/she got from the infringing copies, whereas damages target compensating the aggrieved party for its loss. The aim of awarding damages is to compensate the copyright owner for the violation of his/her rights. Hence, the award of a monetary sum is intended to put him/her back, as much as is possible in the position he/she would have been in if there had been no infringement. In a copyright infringement case, the claimant generally claims damages from the defendant, along with an injunction. Currently, the courts have been applying the ‘user principle’ in assessing the damages done. The damages are calculated based on the amount a licensee would pay a licensor in a hypothetical negotiation over the alleged copyright in question. An alternative way to assess damages is by considering the economic factors such as:

  • Any depreciation to the copyright as a consequence of the infringement.
  • Any loss of sale by the claimant that has resulted in infringement.
  • Any damage is done to the claimant’s trade that has resulted from infringement.
  • The kind of royalty the claimant should have received.
  • The amount the defendant would have paid for a licence to reproduce the claimant’s work.
  • The flagrancy of copyright infringement.

The method that results in a higher figure is likely to be awarded in damages. The claimant could choose to receive profits made by the defendant because of the copyright infringement, instead of the damages. 

Absolute Lofts v. Artisan Home Improvements (2015)

A recent decision in the UK Intellectual Property in the case of Absolute lofts South West London v Artisan home improvements (2015) sheds some light on the application of the ‘user principle’ and the interplay between damages for flagrant infringement under Section 97(2) of the Copyright Designs and Patents Act 1988 (CDPA) and damages under Article 13 of the IP Enforcement Directive (Directive 2004/48). In this case both the parties were engaged in a roof conversion, although geographically they were not competitors. The Artisan had admitted to using 21 photographs of the loft conversions which were carried out by Absolute Lofts on their website. The photographs were owned by Absolute and they had a copyright on them. The Intellectual Property Enterprise Court held that there had been a flagrant breach of copyright in this case. Significantly, it was ruled that copyright owners could choose on recovery based on whichever option has a more favourable financial outcome for them.

The Copyright Act 1988, provides for the following heads of damage that are: 

  1. Compensatory damages,
  2. Additional, exemplary, or aggravated damages in cases of flagrant infringement.

Conversion damages

These damages are not applicable to cases after the amended law. It was a part of the available remedies in the Copyright Act 1968.

Compensatory Damages

Section 97(2) of the Copyright Act 1988, has a provision for awarding compensatory damages to the copyright owner for the loss experienced by the copyright infringement. 

Sutherland Publishing Co Ltd v. Caxton Publishing (1936) 

It was explained in this case that the compensatory damages may be assessed by calculating the depreciated value of the copyright, caused by the infringement. However, the copyright owner must establish that the damage caused was affected by the act of copyright infringement.

The court uses different methods to calculate an award of compensatory damages, depending on the circumstances. They are:

  • Licence fee – This method for calculating compensatory damage involves the court allocating damages in accordance with a reasonable licence fee. This may be a certain percentage of the copyright article’s value.

Tolmark Homes Pty Ltd v Paul (1999)

In this case, an architect’s plans were copied and used for the construction of a building. 5 percent of the cost of the building as representing the licence fee was awarded by the court to the copyright owner. This kind of approach is applicable only where it can be established that it is likely that the infringer would have been granted a licence. 

  • Direct valuation of copyright – This method is based on evaluating the monetary value of the copyright and a consequent decrease in monetary value because of the infringement. Copyright protects the form of the work and the labour expended in its creation. 
  • Diversion of trade and damage to reputation – Consider a profitable business context where the copyright owner may show that an infringer used the copyright to take away his/her customers. To be awarded compensatory damage for such conduct depends on showing a direct relationship between the copyright infringement and the loss of sales/damage to reputation. 

Additional or exemplary damages

Additional damages can be given to the plaintiff against an infringer as per Section 97(2) of the Copyright Act, 1988. They can be a very useful tool when a deliberate infringement has occurred but it is difficult to evidence or verify the damage suffered. These damages are punitive in nature. The court will grant an award of additional damages cautiously, like an award of exemplary damages at common law. The statutory recognition of additional damages has paved the road for copyright owners to be granted increasingly larger awards, putting for close scrutiny the alleged infringer’s conduct such as motives and business activities. Also, only one of these factors needs to be shown to allow the court to exercise its discretion in awarding additional damages. They are:

  • Flagrancy – Additional damages are also awarded where the infringement is flagrant. Flagrancy has been variously defined as conduct that is scandalous, deceitful, deliberate and calculated infringement where a defendant reaps a pecuniary advantage because he/she gets excess damages than he would otherwise have to pay.
  • Deterrence –Provisions relating to this award focus on additional damages concerning the punitive aspects of the infringer’s conduct. Deterrence is a useful tool where the conduct occurs in industries where copyright infringement is widespread and at a mass scale. For example, in the music industry, where copyright piracy is a major problem and is difficult to police.
  • Conduct after the allegation of infringement is made – If the infringer were to hide the infringement or disguise it to take prejudicial action against the copyright owner, this conduct may then be taken into account in ascertaining whether to award additional damages and the amount (number) of that award.
  • Conversion into digital form – The court may take into account the fact that the infringement involved the conversion of the copyright into a digital form. This factor acknowledges the prospective for widespread copyright infringement once the work has been converted into digital form by the infringer.
  • The benefit to the infringer – Any other benefit gained by the infringer by virtue of the infringement could also be taken into consideration in arriving at the amount of the additional damages. 

Conversion damages

The conversion or detention damages are provided under Section 116 of the Copyright Act, 1968. This section creates a statutory assumption that the copyright owner is the actual owner of the article embodying the copyright, giving the subsequent right to sue for the conversion. The first step in the measurement of conversion damages is knowing the value of the infringing article at the date of conversion. This value is attributed to the infringing article, instead of an authorized non-infringing article. Conversion damages are granted to complement the compensatory damages under the Copyright Act, 1988 and must not be awarded if the relief that the court proposes to otherwise grant is sufficient. The amendments regarding granting of conversion damages in the 1988 Act, was enacted to remove the potential harshness in the provision. This allowed for the court to have a fair balance while having a discretion to refuse or reduce the award of conversion damages wherever appropriate.

The UK trade mark protection

A trade mark can be a name, word, phrase, logo, symbol, design, image, sound, shape, signature, or any combination of these things. Other than the United States and Canada, in most common law countries, the term is written as ‘trade mark’ as in the Trade Marks Act 1994 of UK, and not ‘trademark’ as is written in most other countries. Although there have been several acts relating to trade marks previously, they were not comprehensive. It was only after the Trade Marks Registration Act, 1875 that it was possible to register trademarks for any type of goods and It was after over one hundred years, in 1986, that it was possible to register marks for services.

The UK trademark system is governed by the Trade Marks Act 1994 and is largely consistent with the EU trademark law. Section 1 of this Act defines a trademark as any sign that is capable of being represented graphically and is further capable of distinguishing goods or services of one undertaking/enterprise from those of other undertakings/enterprises. 

Registration of a trade mark in the UK

The registration of trademarks in the United Kingdom is facilitated through the UK Intellectual Property Office (UKIPO). On the acceptance of the registration by the UKIPO, many exclusive rights are available to the trade mark owner. These exclusive rights allow the trademark owner to prevent unauthorized use of the mark on products that are identical or similar to his/her registered mark. For many years’ symbols or marks have been put up by traders on their goods to indicate their origin.

The first trademark registered under the Trade Marks Act, 1994 and the Registration Act of 1875, as trade mark number 1, was registered in the name of Bass, Ratcliff & Gretton Limited and dated 1 January 1876. It is still in force and is now in the name of Brand brew S.A. The UK trade mark registration can be sought in up to 45 classes of goods and services, but upon the making of a UK trade mark application, it is necessary to give a state the effect that the applicant either uses or has a bona fide intention to use the mark, and this is for all the goods and services specified. 

Trade mark in the UK

A sign which is capable of being represented graphically and capable of distinguishing one good or service undertaking from another undertaking is known as a trade mark.

A trade mark can be:

  • Words
  • Designs
  • Letters
  • Numerals
  • The shape and packaging of goods
  • Symbols
  • Colour shades
  • Combination of any of these

A trade mark enables a customer to identify a good or service as coming from a specific source, even though they might not know the source’s identity. Therefore, the marks and producer’s reputation need to protect the mark in the UK and abroad. The best way to protect a mark is by registering it. Registration gives control over the utilization of the trade mark about the goods and services for which the mark was registered.

What can and cannot be registered as a trade mark in the UK

When a trade mark is being registered, it should not fall into the absolute nor the relative grounds of refusing a trade mark application.

The absolute grounds for refusal are:

  • A trade mark is devoid of any distinctive character.
  • A trade mark is purely descriptive of the goods or services for which it is being registered.
  • A trade mark is a term that is generic and commonly used in the relevant trade.

The relative grounds for refusal, which as mentioned earlier can only be raised by parties with existing rights, are:

  • Earlier there was a similar registered trade mark and the current registration is for identical goods or services.
  • In this situation, there must also be a likelihood of confusion on the part of the public, which includes the likelihood of association of the two trademarks.
  • A mark that takes unfair advantage or is detrimental to the reputation or distinctive character of an earlier mark that is identical or similar.

Trade mark infringement

Trade mark infringement occurs when a sign is used by a third party in the course of trade involving goods or services where:

  1. The sign being used by the infringer is identical to the registered trade mark and is being used for identical goods or services to those that are a subject of the trade mark registration.
  2. The sign used is identical to a registered trade mark that has a reputation in the market and the use of such a sign takes unfair advantage and is injurious to the originality or reputation of the mark.

Explanation regarding infringement of a registered trademark is given in Section 10 of the Trade Marks Act, 1994. Action for infringement is outlined in Section 14 of the Trade Marks Act, 1994, and Section 17 gives the meaning of ‘infringing goods, material or articles. The remedies available for trade mark infringement are given as follows:

Civil remedies

Execution of trade mark rights in the United Kingdom is mostly a civil matter. In the High Court (Chancery Division), as well as in the Intellectual Property Enterprise Court, both registered trademark and passing off claims can be brought. Judges in these courts are mostly specialized in Intellectual Property. The civil remedies available are:

  • Interim injunctions (in combination with a cross-undertaking in damages) and final injunctions.
  • Damages or accounts of profits.
  • Delivery up of infringing goods.
  • Removal of marks from infringing goods.

Criminal remedies

Criminal offences are also listed in the Trade Marks Act, 1994 which include:

  • Applying a sign that is identical to or likely to be mistaken for a registered mark to the goods or their packaging.
  • Dealing in such goods.
  • Having possession of articles or tools that are capable of making copies of trademarks.

These criminal proceedings in the UK are generally brought by the local weights and measures authorities, rather than the rights holder and they are used to tackle counterfeit goods.

Damages and accounts of profits

The trade mark owner can recover the damages concerning the acts of infringement. Damages can be calculated based on the profits lost by the claimant resulting from the infringement. The damage incurred can be damage to reputation, goodwill, or an account of profits.

An account of profits is a reasonable remedy that requires the infringing party to surrender the profits which were made from their infringing activity.

The claimant may either seek an account of profit or damages, but not both. If a choice is given between these remedies it may lead to the claimant recovering different amounts, so due consideration must be given. An award of damages is a remedy of right that will be awarded to compensate the claimant for experiencing loss because of the infringement. An account of profits, however, is an optional equitable remedy that allows a claimant to recover the profit received by the defendant resulting from the use of the claimant’s trade mark without the claimant having to prove loss.

Jack Wills v. House of Fraser, (2016)

An efficacious claimant in a trade mark infringement claim is entitled to either an account of profits or damages. The claimant is not entitled to both and the claimant has to choose between the two. For a claimant to recover the profit under an account of profits, that profit must have resulted from the infringement. In the case, Jack Wills v. House of Fraser, (2016) has, for the first time, also allowed a trademark infringer to allocate its profits to reflect general overheads encountered in selling infringing products that shifted the sale of even non-infringing products.

Design & Display Ltd v. Ooo Abbott and another (2016)

Section 14(2) of the Trade Marks Act, 1994 permits the remedies of injunctions, damages, accounts of profit, or otherwise as is available in respect of the infringement of any other property right, to a trade mark owner. In Design & Display Ltd v Ooo Abbott and another, (2016), the Court of Appeal held that an infringing defendant was permitted to set off a part of its general overheads which were attributable to the infringement and that would have endured a non-infringing business.

The remedy of an account of profits is not punitive and it is only a tool by which an infringer is required to pay to the trade mark owner all profits that are attributed to the infringement. A trade mark owner who chooses to accept an account of profits instead of damages has to accept it even if greater profit would have been made had the infringer had made great profit from the infringement and so a sum greater than the actual profit attributable to the infringement should be awarded.

Conclusion

Around the world, there are different rules regarding the award of damages for different aspects of trademark and copyright infringement. Most countries have considerations such as profits from the goods in question and actual losses suffered by the complainant. The implementation of punitive damages has different answers around the globe. The punitive damages are available in the US rather more freely than in Europe. These damages are available in Europe but the European courts are reluctant to impose them except in extreme cases.

As the analysis of copyright and trademark laws shows, the remedies for their infringement become more and more complex and so is the range of damage awards. The question of damages creates difficulties uniformly across courts and regions. A wide variety of factors and considerations will have to go into any individual award of damages and concluding a figure is a challenge in almost every scene as they are rising with new record awards being seen more and more frequently. The copyright and trademark litigation may never fully match the patent lawsuits in sheer monetary awards; however, copyright and trademark lawsuits will make even bigger headlines in the coming years as business migrates to the Internet and digital technologies. The area of awards in respect of damages is one that businesses around the world should watch closely. As trademark overcrowding is taking place around the globe and international businesses are becoming faster paced, the upwards trend in terms of damages means that the risk to business owners of getting it wrong is climbing steadily.

References

  1. https://www.csusa.org/page/Basics https://lac-group.com/blog/comparing-uk-and-us-copyright-protection/
  2. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/456368/IP_rights_in_USA.pdf
  3. https://www.kashishipr.com/blog/things-that-cannot-be-copyrighted/https://www.bitlaw.com/trademark/index.html
  4. https://www.uspto.gov/page/about-trademark-infringementhttps://fairuse.stanford.edu/law/us-code/u-s-copyright-act/copyright-infringement-and-remedies/
  5. https://www.klemchuk.com/trademark-infringement-damages
  6. ttps://www.offitkurman.com/blog/2020/04/30/u-s-supreme-court-rules-on-damages-for-trademark-infringement/
  7. Copyright Infringement: Remedies available – InBrief.co.uk
  8. Copyright: damages for infringement (twobirds.com)
  9. UK Trade Marks – The Basics (mewburn.com)
  10. https://www.lexology.com/library/detail.aspx?g=bdfb5dc2-4a1b-4f78-ab98-65dfdb4bf8b

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