Compensation for moral damages in intellectual property
infringement cases has, in the past, had to break through significant barriers
and overcome considerable prejudice. Some of those barriers are due to the very nature of the damages: it is
always easier to argue that economic detriment has been suffered (when we are
talking about trademarks, designs, patents or intellectual creations) than
damage to the intangible or spiritual realm of the author or rightholder. Yet it is sad to think that reservations
towards compensation for moral damages might also have come about as a result
of a legislative deficiency.
Directive 2004/48/EC, extending the means of protecting
intellectual property rights, slotted moral damages into the context of
negative economic consequences of infringement, just another aspect alongside
lost profit suffered by the injured party and unfair profit made by the
infringer (Art. 13.1 a). Alternatively,
the Directive provided for compensation based on a hypothetical royalty, i.e.,
the lump sum that would have been due if the infringer had requested the
pertinent authorisation (Art. 13.1 b).
This gave the impression that if the plaintiff opted for
this alternative criterion for assessing the value of the damages, i.e., the
hypothetical royalty, moral damages could not enter into the equation. The Spanish lawmaker had followed this
legislative anomaly to the letter, thanks to Act 19/2006, and applied it to all
forms of intellectual property: the Trademark Act, the Patent Act, the National
Designs Act and the consolidated wording of the Spanish Copyright Act.
It was the Court of Justice, in its judgment of 17 March
2016 in case C-99/15, which ultimately put things in their place. That judgment stemmed from a reference for a
preliminary ruling made by the Spanish Supreme Court concerning the regulation
of moral damages in copyright. The
plaintiff (the director, screenwriter and producer of an audiovisual work) had
sued the producer of a documentary that included passages of his work for
infringement of his rights. The
plaintiff had selected the compensatory criterion of the fee for unauthorised
use of his work but also requested 10,000 Euros for moral damages. The Supreme Court wanted to know whether
moral damages could additionally be requested in such cases.
In its judgment, the Court of Justice clarified that a
provision of EU law must be interpreted not just in terms of its wording, but
also in terms of its context and the objectives that it pursues; that
compensation for damages must seek to ensure full compensation for the
prejudice actually suffered; and that hypothetical royalties only cover
“material” damage. There is therefore
nothing to prevent the rightholder from also being able to claim compensation
for any “moral” damages suffered.
This judgment is extremely significant due to its side
effects: its clarifying scope extends to trademark, patent and design law. However, if the judgment gives wings to moral
damages, we should not try to fly too high. There are rules governing moral damages too, and, just like Icarus, we
could end up falling into the sea with our wings burned for flying too close to
the sun, and this time a legislative deficiency would not be to blame!
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Author: Antonio Castán
Where the claimant seeks moral damages in intellectual property, the assessment suffers some challenges due to the intrinsic nature of the loss and the legislation on the subject, meaning that economic losses can be more easily proved. This was super informative! It has been in my mind to pay someone to take my class online for me because these are tough classes, Glad I came across this post.
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