A company is sued for copyright infringement, and the
actual losses are found to be $1 but it gets hit with a $150,000
bill for additional damages. Seems like a big hit, given that the
copyright holder had no direct financial loss.
On the other hand, if the infringing company had revenue of $242
million and a $27 million profit how much of a deterrent is
The case in which this happened is a bit boring – it
involved the stealing of Dynamic Supplies' file providing
compatibility information for printers and computers. See, boring.
Tonnex was the infringer. Whatever.
But the dollars and the result bring into focus some of the
difficulties facing people trying to protect their intellectual
property. Think movies, music, computer games. Piracy, IP
infringement, counterfeiting, stealing – call it what you
The actual damage caused by each infringement may be small or
nonexistent, but the combined effect on profitability, lost sales
and loss of the value of IP often cannot be measured purely on
economic grounds. That's why additional damages are an option
for courts and victims.
IP legislation (copyright, trade marks, patents) gives the
courts an unfettered discretion to award as much "additional
damages" as it considers appropriate. Factors such as the
flagrancy of the infringement, the conduct of the wrongdoer and the
need to deter similar infringements are all considered in assessing
The main point of additional damages is the deterrent effect.
The idea is that, if someone else has had to pay substantial
dollars for infringement, then hopefully the rest of us will think
twice. To achieve that, the damages have to hurt. We think $150,000
for a multi-million dollar business is a bit soft, and isn't
likely to do its job. As Harry Styles tweeted, not in relation to
this issue: "If you're going to get in trouble for hitting
someone...might as well hit them hard."
We do not disclaim anything about this article. We're
quite proud of it really.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
IP is the legal property in the innovation in your business and it is that which drives your revenue and profit growth.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).