When copyright infringements occur, the question of how to calculate damages often becomes relevant.
Calculation methods
First of all, there are three calculation methods for this
- Concrete damage
- Profit skimming
- License analogy
Most popular method: license analogy
As there is usually no concrete damage to the rights holder and no direct profits have been made from the copyrighted work, such as an image on a website or software, the license analogy is the most popular calculation method.
According to this method, the infringed party can supposedly use their own licensing practice as a benchmark. However, case law is taking an increasingly strict view of this. Nowadays, when assessing the damages to be paid by way of the license analogy, the question is what reasonable contracting parties would have agreed as remuneration for the acts of use performed. The objective value of the right of use must be determined. It is irrelevant whether and to what extent the infringer himself would have been willing to pay remuneration for his acts of use (BGH judgment of June 18, 2020 - I ZR 93/19 with reference to BGH, judgment of September 13, 2018 - I ZR 187/17, GRUR 2019, 292 marginal no. 18 = WRP 2019, 209 - Sportwagenfoto, mwN). This often amounts to an estimate by the court.
Own licensing practice - price list is not sufficient
The rights holders refer to the principle that the rights holder's own licensing practice established on the market at the time of the infringement is of decisive importance for the assessment of the damages to be paid by way of license analogy (BGH judgment of 18.6.2020 - I ZR 93/19 with reference to BGH, GRUR 2019, 292 para. 19 - Sportwagenfoto). It does not matter whether the license rates listed in the license agreements are generally customary and objectively reasonable. Insofar as the rights holder demands and also receives the license fees provided for by him, this circumstance justifies the finding that reasonable contracting parties would have agreed on a corresponding remuneration if a contractual license had been granted. If the license rates demanded by the rights holder for the rights of use granted are paid on the market, they can be used as a basis for calculating damages by way of license analogy even if they are above the average of comparable remuneration (BGH judgment of 18.6.2020 - I ZR 93/19 with reference to BGH, GRUR 2009, 660 para. 32 - Reseller contract, mwN).
However, this results in some difficulties of proof for the rights holders, because in consistent application of these principles, the Federal Court of Justice rejected in the judgment of 18.6.2020 - I ZR 93/19 - simply looking at a price list of the rights holder. The submission of the price list does not prove that the remuneration system can be enforced on the market. However, the assumption of customary remuneration presupposes that these prices are actually paid on the market (GH judgment of 18.6.2020 - I ZR 93/19 with reference to OLG Frankfurt am Main, GRUR-RR 2019, 460, 461 [juris para. 32]; MünchKomm.BGB/Schwab, 7th ed, § Section 818 para. 106; Raue, Die dreifache Schadensberechnung, 2017, p. 306 mwN).
It will therefore be possible and necessary to require the infringer to submit a certain number of actual license agreements concluded at these prices. Unfortunately, it has not yet been clarified whether there is a corresponding obligation to provide evidence before the proceedings or whether the evidence only has to be provided during the proceedings. As a rule, the party issuing the warning usually stonewalls before the proceedings and the infringer cannot assess whether a defense in court is worthwhile.
The statements represent initial information that was current for the law applicable in Germany at the time of initial publication. The legal situation may have changed since then. Furthermore, the information provided cannot replace individual advice on a specific matter. Please contact us for this purpose.