165
IV. INFRINGEMENT AND ENFORCEMENT
- PUNITIVE DAMAGES
As is evident from Hay v. Sloan, just mentioned, common law courts
sometimes grant punitive or exemplary damages, on top of compensation, for
copyright infringement. Since the 1960s, U.K. courts have been unwilling to
grant such damages, but the U.K. Law Commission recently recommended a
change in this policy. Commonwealth and U.S. courts grant such damages
quite often. Even civil law judges in Quebec have begun to grant such damages
for copyright infringement.
- Punitive damages punish flagrant conduct and deter future
infringement
EXAMPLE:
The defendant copied and rented out videotapes from her variety store, without
the authorization of the copyright owner. In 1988, she pleaded guilty to a
criminal charge of of deliberate copyright infringement and was fined $50. Six
years later, however, an Anton Pillerorder executed in her store turned up over
300 tapes containing the plaintiff’s works. The defendant had earlier refused to
take a licence from the plaintiff. The trial court awarded the plaintiff
compensatory damages of $9,500, based on the usual charges made by the
plaintiff for licensing reproduction and rental, plus costs of $2,500, but refused
to grant any additional punitive award. The plaintiff appealed.
Profekta International Inc. v. Lee, (1997) 75 C.P.R.(3d) 369 (Canada:
Federal Court of Appeal)
JUSTICE LINDEN for the Court:
[E]xemplary damages ... should only be awarded in cases “where the combined award of general
damages and aggravated damages would be insufficient to achieve the goal of punishment and
deterrence”. ...[T]he question which this Court must ask ... is: “was the misconduct of the
defendant so outrageous that punitive damages were rationally required to act as deterrence?”
While Courts of Appeal rarely interfere with such decisions [of first instance judges not to award
punitive damages – Ed.], we feel we must do so in this case for several reasons.
First, the conduct of the respondent, in continuing to violate the copyright before the injunction
was issued, was flagrant in the light of her criminal conviction earlier, the warning issued to her
by Profekta and her irresponsible attitude as reflected in her statements ... that she would rather
spend $5,000 on legal fees to fight Profekta than abide by the copyright and enter a licence
agreement. Second, the compensatory damage award, while not so low as to be altered by this
Court, was modest, considering the financial benefit obtained by the respondent in violating the
copyright. Third, the extra profit made by the respondent in not paying any licence fees cannot
be ignored.
Thus, in our view, an award of punitive damages was required in addition to the compensatory
damages in order to punish the respondent for the flagrant conduct and to deter her and others
from similar conduct in the future.
In view of the amounts awarded in similar cases, the amount of $10,000 in punitive damages
should be awarded.
