The culture of damages has not yet developed in Indian courts. The statute book speaks of actual damages and conversion damages, actual damages being damages suffered by the plaintiff which are available in addition to account of profits which is the amount of profit made by the defendant through the infringement. There is an interesting contrast with trade mark law in as much as in trade marks either damages or account of profits are available whereas in copyright law both are available.
There is no case in which damages have been granted in the last 40 years. After the initial interim battle, most cases get settled due to the normal impatience of a businessman to get things moving or due to general reluctance of courts to grant damages and because the businessman knows how difficult it is for him to succeed eventually. All courts are reluctant to grant damages partly because lawyers do not prove damages which are extremely difficult to prove. If there is a proprietor whose sales had been growing tremendously, it is extremely difficult to prove that piracy had caused any damage to its sales. Account of profits is also difficult because the defendants books are normally fudged or incomplete or non-existent so that they do not disclose positive profits or in any case do not disclose sizeable profits, in proportion to the illegal activities.
The result is that there, is no damages culture and the real financial deterrence does not exist in a civil action. This is about the only real advantage that a criminal action has over a civil action.
Of late, when Anton Piller orders are executed and huge quantity of goods are seized, there is a tendency for defendants to settle the matter and even pay damages. If there is a criminal action and the goods are seized, their desire to settle is far greater because of fear and so they may be willing to pay higher sum of money as compensation to the right holder.
In a civil action, they may be desirous of settling particularly if they are dragged to another city to defend the action or the seizure is sizeable and they are tempted to have their goods returned after removal of the infringing trade marks.
Some companies do not believe in returning goods which have been seized but believe in either destroying such goods or giving them in charity. Some companies may agree to return the goods after obliterating the impugned trade marks and destroying all the patches, labels and packaging.
Therefore while the damages culture has not developed, there is of late a tendency for the matters to be settled out of the court and for money to be paid.
A recent amendment to the Copyright Act has in the case of criminal actions imposed a minimum fine of Rs. 50,000/- and a maximum fine of Rs. 2,00,000/-. Now this range of 50,000/- to 200,000/-. has been taken as a yardstick and a lot of civil actions have also been settled in recent times with damages being settled within this range.
The time is definitely coming when litigation will be more expensive particularly if teams of lawyers are involved; if outstation matters are involved entailing travel and hotel expenses; if in the case of civil action, huge amounts have to be spent on court fees and other expenses such as fees of local commissioners in Anton Piller orders. With that kind of investment in the action, it would be necessary for the plaintiff to, at least recover his cost. What is likely to happen is that the plaintiff would aim at putting a one time investment in taking actions and then in each case aim to recover the same amount which can be circulated again and again. What would then happen is that infringers would pay off the campaign for a copyright proprietor.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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