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Picking up the bill: the cost of copyright litigation

By Jeremy

The IPKat credits LexisNexis Butterworths' subscription-only service for digging up Experience Hendrix LLC and another v Times Newspapers Ltd [2008] EWHC 458 (Ch), a decision given yesterday on costs in copyright infringement litigation from Mr Justice Warren of the Chancery Division, England and Wales.

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Following protracted proceedings, Experience Hendrix succeeded in obtaining summary judgment in a copyright infringement action against Times Newspapers (you can read the IPKat's account of the earlier proceedings here). Once the main issues had been sorted out, the court ordered delivery up of infringing material, disclosure in the terms of Island Records Ltd v Tring International (to give Hendrix Experience sufficient information to enable it to choose between damages and an account of profits) and costs that were to be paid on an indemnity basis. Subsequently, an offer under the Civil Procedure Rules Part 36 was revisited; this was a cash offer that Times Newspapers had made before the issue of liability was ruled on, together with an undertaking to destroy the master copy and other copies of any recordings within its possession and a promise not to exploit the copies of any recordings it held. In these proceedings Times Newspapers argued that, in light of the Pt 36 offer which they made, the court should not have awarded indemnity costs but, instead, should have ordered that the question of costs be reserved.

Warren J was not disposed to accept Times Newspapers' contention. He sumarised the linear nature of most copyright litigation as follows: where the claimant as copyright owner wanted monetary compensation, the first stage was to try to establish infringement. If the claimant won, Island Records-style disclosure would be ordered so that he could elect between his remedies of damages or an account of profits. Until that information had been disclosed, the successful claimant was not in a position to know which to choose. Once that information was given and the claimant opted for damages or an account of profits, the next step was to work out how much the quantum of damages or an account should be.

Having said all this, the judge then addressed the key issue of costs. In this case, he said, there was no reason for interfering with the nature of the costs order. Even taking into account the Pt 36 offer, Hendrix Experience would still have had to go to the expense of securing a favourable judgment on the issue of liability in order to proceed to the next stage, being the damages/profits enquiry.

The IPKat assumes that the sums in question must have been pretty large in order to make it worth litigating over them like this. Merpel says, I wonder if this is all changed by IP Enforcement Directive 2004/48, which looks as though the successful claimant in infringement proceedings can ask for both compensatory damages and an account of profits.

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Full post as published by IPKat on March 12, 2008 (boomark / email).