Phonographic Performance Ltd v Andrew Ellis Trading as Bla Bla Bar

JurisdictionEngland & Wales
JudgeLord Justice Lewison,Lady Justice Eleanor King
Judgment Date18 December 2018
Neutral Citation[2018] EWCA Civ 2812
CourtCourt of Appeal (Civil Division)
Docket NumberCase No: A3/2018/0463
Date18 December 2018
Between:
Phonographic Performance Limited
Appellant
and
Andrew Ellis Trading as Bla Bla Bar
Respondent

[2018] EWCA Civ 2812

Before:

Lord Justice Lewison

Lady Justice King

and

Lord Justice David Richards

Case No: A3/2018/0463

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE, CHANCERY DIVISION

Mr Justice Birss

HC-2016000667

Royal Courts of Justice

Strand, London, WC2A 2LL

Mr Gwilym Harbottle (instructed by GSC Solicitors LLP) for the Appellant

Mr Andrew Ellis (appeared in person)

Hearing date: 12 December 2018

Approved Judgment

Lord Justice Lewison
1

Section 97 (2) of the Copyright Designs and Patents Act 1988 (“the 1988 Act”) empowers a court to award additional damages in cases of flagrant copyright infringement. In a line of cases decided at first instance, judges of the Chancery Division have awarded such damages at the same time as imposing a suspended sentence of imprisonment for contempt in breaching an injunction previously granted to restrain copyright infringement. Phonographic Performance Ltd (“PPL”), the collection society, asked Birss J to award such damages following his imposition of a suspended prison sentence on Mr Ellis for breach of an injunction previously granted restraining copyright infringement by the unlicensed playing of recorded music in public. He refused on the ground that it was inappropriate to award such damages at the same time as imposing a prison sentence, on the basis that the court should not fine a contemnor at the same time as imposing a suspended custodial sentence. The judge's judgement is at [2018] EWHC 821 (Pat). The judge granted permission to appeal, saying that there was a “self-contained but important point of principle”. PPL argued that the principle that the judge formulated is wrong. The point of principle is an important one for PPL, because it brings many such claims every year.

2

At the conclusion of the hearing, we indicated that we would not award additional damages on the facts of this case, with the consequence that the appeal would be dismissed. We said that we would put our reasons in writing. These are my reasons for joining in that decision.

3

As section 1 (1) of the 1988 Act states, copyright is a property right. It is an exclusive right to do the acts specified as the restricted acts in relation to the work protected by copyright. In essence, those acts are rights to stop other people doing things to the work (like copying it or communicating it to the public). Because copyright is a property right, someone who does one of the restricted acts without the consent of the copyright owner infringes that property right. The infringement of that right gives the property owner a cause of action. The remedies available to him are (i) an injunction to restrain any further invasion of his property right; (ii) damages to compensate him for any loss that he might have suffered as a result of that invasion and (iii) in the alternative to (ii), an account of any profit that the infringer may have made as a result of the infringement. If the court awards damages, then section 97 (2) may come into play. It provides:

“(2) The court may in an action for infringement of copyright having regard to all the circumstances, and in particular to—

(a) the flagrancy of the infringement, and

(b) any benefit accruing to the defendant by reason of the infringement,

award such additional damages as the justice of the case may require.”

4

Because damages awarded under section 97 (2) are described as “additional” damages, it has been held that they cannot be awarded where the copyright owner seeks an account of profits rather than damages: Redrow Homes Ltd v Bett Brothers plc [1998] RPC 793. But in the present case Birss J did award compensatory damages, so that restriction did not apply.

5

Where the court awards compensatory damages it is compensating the property owner for invasions of his property right that have already happened. Where it grants an injunction it is making an order to prevent future invasions of the property right. (There are cases in which as a matter of discretion the court refuses to grant an injunction and makes an award of damages instead; in which event it is able to compensate for future invasions of the property right. But that is very rare in intellectual property cases).

6

Once the court has granted an injunction it has its own interest in ensuring that its orders are obeyed. As Jackson LJ put it in JSC BTA Bank v Solodchenko (No 2) [2011] EWCA Civ 1241, [2012] 1 WLR 350 at [45]:

“The sentence for such contempt [i.e. civil contempt] performs a number of functions. First, it upholds the authority of the court by punishing the contemnor and deterring others. Such punishment has nothing to do with the dignity of the court and everything to do with the public interest that court orders should be obeyed. Secondly, in some instances it provides an incentive for belated compliance, because the contemnor may seek a reduction or discharge of sentence if he subsequently purges his contempt by complying with the court order in question.”

7

What punishment to impose upon a contemnor is a matter between the court and the contemnor. But the sentence is not designed to compensate the claimant; and the mere fact that a contempt of court has been committed will not of itself entitle the claimant to a financial remedy. In the event that the court imposes a fine on a contemnor, the fine will be paid to the state: not to the claimant. Sometimes, however, the contempt will involve an independent wrong against the claimant. Thus where an action was settled on terms that included an undertaking which was subsequently broken, Vinelott J awarded damages for breach of the consent order (which had contractual effect) upon a motion to commit: Midland Marts Ltd v Hobday [1989] 1 WLR 1143. That was one of the cases referred to with approval in JSC BTA Bank v Ablyazov (No 14) [2018] UKSC 19, [2018] 2 WLR 1125 at [23] in support of the proposition that “breach of an order of the court is actionable where it gives effect to an underlying private law obligation which is itself actionable.”

8

For some purposes (e.g. the burden of proof and the grant of legal aid) contempt proceedings are treated as criminal proceedings. For other purposes (e.g. rules of evidence) they are treated as civil proceedings. But criminal procedure is sometimes applied by analogy to applications to commit for civil contempt.

9

The judge based his decision on the proposition that:

“.. there is very clear authority that the court should not fine a contemnor at the same time as imposing a custodial sentence as punishment for a contempt.”

10

It is not, however, clear what authority he had in mind. Clearly, however, he saw an analogy between an award of additional damages under section 97 (2) and the imposition of a fine. So I think that the first thing to consider is whether that is an appropriate analogy. For that purpose, we need to consider different types of damages.

11

Aggravated damages are damages awarded for a tort as compensation for the claimant's mental distress, where the manner in which the defendant has committed the tort, or his motives in so doing, or his conduct subsequent to the tort, has upset or outraged the claimant. Such conduct or motive aggravates the injury done to the claimant, and therefore warrants a greater or additional compensatory sum.

12

Exemplary damages on the other hand are intended to punish. As Lord Nicholls put it in Kuddus v Chief Constable of Leicestershire [2001] UKHL 29, [2002] 2 AC 122 at [51]:

“Exemplary damages or punitive damages, the terms are synonymous, stand apart from awards of compensatory damages. They are additional to an award which is intended to compensate a plaintiff fully for the loss he has suffered, both pecuniary and non-pecuniary. They are intended to punish and deter.”

13

The power to award additional damages entered the statute book in section 17 of the Copyright Act 1956. The section was introduced as a result of the recommendation of the Gregory Report of the Copyright Committee stating:

“the court should be given discretionary power to impose something equivalent to exemplary damages in cases where the existing remedies give inadequate relief.” (Emphasis added)

14

Section 17 (3) provided:

“(3) Where in an action under this section an infringement of copyright is proved or admitted, and the court, having regard (in addition to all other material considerations) to—

(a) the flagrancy of the infringement, and

(b) any benefit shown to have accrued to the defendant by reason of the infringement,

is satisfied that effective relief would not otherwise be available to the plaintiff, the court, in assessing damages for the infringement, shall have power to award such additional damages by virtue of this subsection as the court may consider appropriate in the circumstances.”

15

This court considered section 17 in Williams v Settle [1960] 1 WLR 1072. That was a case in which, in breach of copyright, wedding photographs were passed to a national newspaper. The circumstances of their publication were particularly distressing. The defendant's benefit from the breach was £15. In the county court the judge awarded what he called “damages that are really vindictive” of £1,000; and this court upheld his award. Sellers LJ said at 1082:

“In the present action the judge was clearly justified, in the circumstances in which the defendant, in breach of the plaintiff's copyright, handed these photographs to the press knowing the use to which they were going to be put, in awarding substantial and heavy damages of a punitive nature. The power so to do, quite apart from the ordinary law of the land, is expressly given by statute.”

16

The statute in question was section 17. Willmer LJ said at 1086:

“The second...

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