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26 January 2017Copyright

EU law doesn’t prevent punitive damages in IP suits, says CJEU

EU law does not prevent punitive damages from being awarded in intellectual property disputes, according to Europe’s highest court.

In a ruling handed down yesterday, January 25, the Court of Justice of the European Union (CJEU) provided answers for the Polish Supreme Court, which had sought guidance on the interpretation of article 13 of Directive 2004/48/EC.

“Contrary to the view that the referring court appears to take, the fact that Directive 2004/48 does not entail an obligation on the member states to provide for ‘punitive’ damages cannot be interpreted as a prohibition on introducing such a measure,” said the CJEU.

The case stemmed from the termination of a licensing agreement between Stowarzyszenie Filmowców Polskich (SFP), a copyright managing organisation, and television broadcaster Stowarzyszenie Oławska Telewizja Kablowa (OTK).

After the agreement was terminated in 1998, OTK continued to make use of the copyrighted works at issue.

It also filed an application with the Polish Copyright Commission asking the body to set the fee payable for use of the copyright managed by SFP.

In 2009, the commission set the fee at 1.6% of net income earned by OTK from its retransmission of works by cable.

SFP then brought an action against OTK, seeking an order prohibiting OTK from retransmitting the protected works until a new licensing agreement had been entered into, as well as requiring payment.

The case ended up at the Supreme Court, which had questions over whether article 79(1)(3)(b) of the Law on Copyright and Related Rights (UPAPP) was compatible with article 13 of the directive.

Under UPAPP, at the request of someone whose copyright has been infringed, compensation can consist of a sum of money corresponding to twice or three times the amount of the appropriate fee.

In its decision, the CJEU stated that the directive lays down a minimum standard concerning the enforcement of IP rights and does not prevent member states from “laying down measures that are more protective”.

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