France: How to calculate damages for infringement

Judicial authorities applying article 13(1) may calculate the amount of damages owed based on either all the negative consequences linked to the infringement or based on lump-sum royalties.

Evaluation based on all the consequences enables the judge to calculate damages by taking into account different types of loss suffered, mainly economic ones, while compensation based on lump sum royalties does not require establishing the nature of the loss actually suffered. Is it then possible to add on to the lump sum compensation for the material loss another compensatory amount for moral injury?

This question was submitted to the Court of Justice of the European Union (CJEU) by the Spanish judicial authorities in view of the following facts.

Christian Liffers, the rights owner, sued production company Producciones Mandarina for allegedly making a documentary including some sequences from his audiovisual works without any authorisation. He also sued television company Mediaset Espana Comunicacion, which broadcast the documentary.

Liffers wanted to stop the infringement of his IP rights and requested financial compensation for the infringement related to moral injury. The calculation method chosen was a lump-sum royalty payment not only for the economic loss but also for compensation of the moral injury.

The court of first instance accepted the request and awarded the claimant an amount based on the material loss that had been suffered, as well as moral injury. This calculation was contested by the losing companies and also by the Court of Appeal, which denied the existence of a right to any compensation based on moral injury on the ground of article 140 of the Spanish IP law, the terms of which differ a little from the European directive.