Triple remuneration for infringement of economic copyright declared unconstitutional

Previously, an author whose economic rights had been infringed could demand triple the amount of remuneration from the infringer (Article 79(1)(3)(b) of the Copyright Act 1994). Under this provision an author who has suffered damage could claim not only compensation, but also damages in excess of the amount of the actual damage. On June 23 2015 the Constitutional Tribunal found this provision to be inconsistent with the Constitution (Articles 64(1) and (2), in conjunction with Article 31(3) and Article 2 of the Constitution; Case SK 32/13).

Facts
A cable television operator failed to obtain authorisation from the relevant collective management organisation for the rebroadcast of certain programmes, but went ahead with the broadcasts and made non-contractual payments. The collective management organisation brought an action against the operator for payment of triple the percentage rate of the operator's revenue, reduced by the payments already made, and to prohibit rebroadcasting. The case was referred to the district court and subsequently to the appellate court, which awarded the requested remuneration. The operator appealed on the grounds that it had been ordered to pay compensation of a size that was incommensurable to the actual damage.

Decision
The Constitutional Tribunal found that the contested provision infringed the principle of proportionality and demonstrated excessive interference with the financial freedom of the operator. In delivering the judgment, the tribunal observed that it is often difficult to estimate the value of damage resulting from the infringement of economic copyright; it is easier to do so in situations where compensation is paid as a lump sum. However, the copyright owner should not have been granted exorbitant compensation derived from the damage suffered. The tribunal held that considering a lump sum when determining a claim for compensation may help to maintain some proportion between the damage suffered and the compensation awarded.

Comment
The judgment does not deprive economic copyright holders of protection of their rights; they still may continue to pursue other claims as regulated in Article 79 of the Copyright Act, including seeking redress for damage suffered pursuant to the laws of general application. However, it does mean that copyright holders can no longer demand triple the remuneration due – or at least it will be harder for them to do so. Of course, rights holders will still be able to argue that, for example, licences for their works are extremely expensive. On the other hand, the price of works may be estimated if the price paid for them is taken into consideration.

Since publication of the judgment in the Official Journal (Dz U z 2015 r poz 932) the courts can no longer issue rulings based on the provision declared unconstitutional. Further, companies or individuals in respect of whom judgments ordering payment had already been issued can demand that the proceedings be reopened. However, applications for revision must be lodged within three months of the entry into force of the judgment (July 1 2015) – that is, by October 1 2015.