In copyright infringement cases, knowing how damages are calculated is vital regarding how to proceed. This article provides an overview of how such damages are calculated in Germany, and in what cases different forms of calculations are used.
At Schlun & Elseven Rechtsanwälte, our copyright lawyers advise and represent clients in copyright infringement cases. We have supported those accused of infringement and those defending their works against infringement. If you require our assistance in a particular case, please do not hesitate to contact us directly.
Determining Liability in Copyright Infringement Cases
Under German copyright law, intellectual property rights holders can sue the direct infringer and anybody who contributes to an infringement. As shown below, the author or rights holder can claim monetary damages in deliberate or negligent infringement situations.
Those who can pursue copyright infringement include the creator/author of the work and the exclusive licensee. In some circumstances, non-exclusive licensees and distributors may be authorised to pursue the cases.
German copyright infringement is particularly strong against companies infringing on copyright for commercial reasons. In this manner, these companies can be found liable for the actions caused by their directors or employees. The actions of an employee, without a proper response from the company, can lead to the corporate body being liable to pay the damages caused by the infringement.
Company directors can also be personally liable for copyright infringement and thus may be found as the responsible party for paying damages. Such a ruling can arise where the copyright infringement has arisen due to the director failing in their duty to properly organise the company in such a way as to prevent violations from occurring.
Third parties are usually not considered copyright infringers, even if they have contributed to it. However, they have a duty to cease and desist if they become aware of the infringement.
Should copyright infringement be found, a claim of enrichment can be made under § 812 BGB, which is the restitution of what has been obtained. That provision states the following:
(1) A person who obtains something as a result of the performance of another person or otherwise at his expense without legal grounds for doing so is under a duty to make restitution to him. This duty also exists if the legal grounds later lapse or if the result intended to be achieved by those efforts in accordance with the contents of the legal transaction does not occur.
(2) Performance also includes the acknowledgement of the existence or non-existence of an obligation.
Claims only become time-barred after 10 years according to § 852 BGB:
If by a tort, the person liable to pay compensation obtains something at the cost of the injured person, then even after the claim to compensation for the damage arising from a tort is statute-barred he is obliged to make restitution under the provisions on the return of unjust enrichment. This claim is statute-barred ten years after it arises, or, notwithstanding the date on which it arises, thirty years after the date on which the act causing the injury was committed or after the other event that triggered the loss.
At S&E, our lawyers are ready to represent our clients in cases of copyright infringement and to advise them on how best to proceed considering the facts of their case.
Calculation of Damages for Copyright Infringement under German Law
Damages for copyright infringement can be awarded in cases where the person who has infringed on the copyright has used the author’s work without their permission. Remedies in such cases can vary from the destruction of the work to injunction relief and compensation/damages for the harm caused. Claims for damages can be found under § 97 II UrhG, which states:
Any person who acts intentionally or negligently is obliged to pay the injured party damages for the prejudice suffered as a result of the infringement. When setting the damages any profit obtained by the infringer as a result of the infringement of the right may also be taken into account. Entitlement to damages may also be assessed on the basis of the amount the infringer would have had to pay in equitable remuneration if the infringer had requested authorisation to use the right infringed. Authors, writers of scientific editions (section 70), photographers (section 72) and performers (section 73) may also demand pecuniary compensation for damage which is non-pecuniary in nature provided and to the extent that this is equitable.
To be able to claim damages, the infringement must have been committed intentionally or negligently. Additionally, the injured party must have suffered harm from the unauthorised use of their work. The calculation of damages can be based on the following methods:
- Concrete calculation of the lost profit § 97 II 1 UrhG,
- Surrender of the infringer’s profit § 97 II 2 UrhG,
- Fictitious licence fee § 97 II 3 UrhG.
Regarding the first option, it can be difficult in practice to calculate the exact damage caused in terms of lost profit.
Usually, the fictitious licence fee is employed in these cases. Under this scenario, the damages are calculated based on what the infringer would have had to pay as reasonable remuneration should they have received permission to use the work in question. To determine this result, German courts often follow the fee recommendations of the Mittelstandsvereinigung Foto-Marketing (MFM).
These fee recommendations are most suited in cases with industry-applicable remuneration benchmarks. It should be noted that the MFM is used for the fees for professionals, such as professional photographers and is generally not applicable to amateurs and only in cases where the material is used in a commercial context.
Immaterial Damages for Copyright Infringement
Immaterial damages arise in cases where compensation claims occur due to a significant infringement on the part of the author, and it cannot be compensated in a manner outside of financial compensation. It is provided for under § 97 II UrhG, where it states:
“Authors, writers of scientific editions (section 70), photographers (section 72) and performers (section 73) may also demand pecuniary compensation for damage which is non-pecuniary in nature provided and to the extent that this is equitable.”
Determining when such a resolution is equitable depends primarily on the significance and scope of the interference. The infringer’s motive and degree of fault are also crucial concerns. The factors considered by the courts in this matter include the following:
- The motive of the action,
- The cause of the action,
- The consequences of the infringement on the interests and reputation of the creator,
- degree of fault,
- The significance, extent, intensity and duration of the interference.
If an author is looking for this form of monetary damages, they should consult our professional legal counsel. Our lawyers will investigate the matter, determine whether you should seek such damages, and then advise you on how best to substantiate the claim. German courts can award substantial compensation to successful applicants.
Practice Group: German Intellectual Property Law
Practice Group:
German Intellectual Property Law
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