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Copyright infringement: What's the damage?
00:00 23 Sep 1998
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The 1995 case of Cala Homes -v- Alfred McAlpine looked into the
question of copyright of building design.
The normal rule is that copyright belongs to the designer, and not to the client. In this case the normal rule was not followed and instead a joint ownership between the client and the designer was established.
This was based on the fact that the client had closely directed the preparation of the design. On this basis, and in view of the Copyright Design and Patents Act 1988, it was an infringement of the client's copyright for the designer to supply the same designs, modified or otherwise, for the benefit of others.
The question of design copyright came before the House of Lords in the recent case of Redrow Homes -v- Bett Brothers. The issue before the House of Lords was whether under the Copyright Designs and Patents Act 1988 the plaintiff could recover damages assessed on an account of profits, as well as a sum of money by way of additional damages.
Redrow argued that they were residential developers and builders of detached houses to a number of different designs in respect of which they owned the copyright.
They contended that Bett Brothers, who were in the same line of business, were building houses which were flagrant copies of Redrow's designs. Relying on sections 96 and 97 of the 1988 Act, Redrow claimed an order for production of a full account of profits realised by Bett Brothers by reason of their infringement, and for payment of a sum equivalent to those profits.
Furthermore they claimed a sum of money as additional damages relying upon section 97 (2) of the Act.
Section 96 and 97 of the Copyright Designs and Patents Act 1988 provide as follows:
l 96 (1) An infringement of copyright is actionable by the copyright owner.
l 96 (2) In an action for infringement of copyright all such relief by way of damages, injunctions, accounts or otherwise is available to the plaintiff as is available in respect of the infringement of any other property right.
l 97 (1) Where in an action for infringement of copyright it is shown that at the time of the infringement the defendant did not know and had no reason to believe that copyright subsisted in the work to which the action relates, the plaintiff is not entitled to damages against him, but without prejudice to any other remedy.
l 97 (2) The court may, in an action for infringement of copyright, having regard to all the circumstances and in particular to (a) the flagrancy of the infringement, and (b) any benefit accruing to the defendant by reason of the infringement, award such additional damages as the justice of the case may require.
Redrow argued that section 97 (2) provided an independent remedy of additional damages which could be sought in addition to the repayment of profits generated by Betts as a consequence of the infringement.
Counsel for Redrow argued that clause 97 (2) was a departure from the earlier 1956 Copyright Act and that the Cala Homes case was precedence for awarding such additional damages over and above any other form of financial relief.
It was argued on behalf of Bett Brothers that clause 97 (2) was not intended to provide an additional remedy where a full account of profits had been made and damages awarded on that basis.
Counsel for Bett Brothers referred to the equivalent clauses in the earlier 1956 Copyright Act where it provided that additional damages may be awarded in cases where the court "is satisfied that effective relief would not otherwise be available". The fact that those words were not present in the later statute was insufficient to suggest that Parliament had intended to provide an additional remedy.
Carefully examining the two statutes together their Lordships concluded that it had not been the intention of Parliament enacting the 1988 Act that the court should have powers to award additional damages in circumstances where a full account of profits had been made, and accordingly full compensation given to the plaintiff.
The effect of clause 97 (2) was therefore that it would only apply in circumstances where a full account of profits could not be made, and damages were instead being assessed in favour of the injured party. Thus, where it was felt having regard to the flagrancy of the infringement that those damages did not adequately compensate, then the court would be able to award additional damages.
In conclusion the appeal was dismissed on the basis that a claim to additional damages could not be made where a plaintiff seeks an account of profits in an action for infringement of copyright.
The normal rule is that copyright belongs to the designer, and not to the client. In this case the normal rule was not followed and instead a joint ownership between the client and the designer was established.
This was based on the fact that the client had closely directed the preparation of the design. On this basis, and in view of the Copyright Design and Patents Act 1988, it was an infringement of the client's copyright for the designer to supply the same designs, modified or otherwise, for the benefit of others.
The question of design copyright came before the House of Lords in the recent case of Redrow Homes -v- Bett Brothers. The issue before the House of Lords was whether under the Copyright Designs and Patents Act 1988 the plaintiff could recover damages assessed on an account of profits, as well as a sum of money by way of additional damages.
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Redrow argued that they were residential developers and builders of detached houses to a number of different designs in respect of which they owned the copyright.
They contended that Bett Brothers, who were in the same line of business, were building houses which were flagrant copies of Redrow's designs. Relying on sections 96 and 97 of the 1988 Act, Redrow claimed an order for production of a full account of profits realised by Bett Brothers by reason of their infringement, and for payment of a sum equivalent to those profits.
Furthermore they claimed a sum of money as additional damages relying upon section 97 (2) of the Act.
Section 96 and 97 of the Copyright Designs and Patents Act 1988 provide as follows:
l 96 (1) An infringement of copyright is actionable by the copyright owner.
l 96 (2) In an action for infringement of copyright all such relief by way of damages, injunctions, accounts or otherwise is available to the plaintiff as is available in respect of the infringement of any other property right.
l 97 (1) Where in an action for infringement of copyright it is shown that at the time of the infringement the defendant did not know and had no reason to believe that copyright subsisted in the work to which the action relates, the plaintiff is not entitled to damages against him, but without prejudice to any other remedy.
l 97 (2) The court may, in an action for infringement of copyright, having regard to all the circumstances and in particular to (a) the flagrancy of the infringement, and (b) any benefit accruing to the defendant by reason of the infringement, award such additional damages as the justice of the case may require.
Redrow argued that section 97 (2) provided an independent remedy of additional damages which could be sought in addition to the repayment of profits generated by Betts as a consequence of the infringement.
Counsel for Redrow argued that clause 97 (2) was a departure from the earlier 1956 Copyright Act and that the Cala Homes case was precedence for awarding such additional damages over and above any other form of financial relief.
It was argued on behalf of Bett Brothers that clause 97 (2) was not intended to provide an additional remedy where a full account of profits had been made and damages awarded on that basis.
Counsel for Bett Brothers referred to the equivalent clauses in the earlier 1956 Copyright Act where it provided that additional damages may be awarded in cases where the court "is satisfied that effective relief would not otherwise be available". The fact that those words were not present in the later statute was insufficient to suggest that Parliament had intended to provide an additional remedy.
Carefully examining the two statutes together their Lordships concluded that it had not been the intention of Parliament enacting the 1988 Act that the court should have powers to award additional damages in circumstances where a full account of profits had been made, and accordingly full compensation given to the plaintiff.
The effect of clause 97 (2) was therefore that it would only apply in circumstances where a full account of profits could not be made, and damages were instead being assessed in favour of the injured party. Thus, where it was felt having regard to the flagrancy of the infringement that those damages did not adequately compensate, then the court would be able to award additional damages.
In conclusion the appeal was dismissed on the basis that a claim to additional damages could not be made where a plaintiff seeks an account of profits in an action for infringement of copyright.
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