Phonographic Performance Ltd v Maitra (Phonographic Performance Ltd v Andrew, Phonographic Performance Ltd v The Underworld (Bradford) Ltd)

A default judgment for copyright infringement does not require an injunction in the claimant’s preferred terms. Under rule 7(1) of the Rules of the Supreme Court and section 37 of the Supreme Court Act 1981, the court retains a judicial discretion to refuse an injunction or grant one on just terms. Where infringement and a threat of further infringement are established, a final injunction will ordinarily be granted without temporal restriction. A collecting society may use the injunction to prevent unlicensed use and require payment for past and future use as the price of a licence. That is not an abuse merely because it encourages the defendant to pay or stop. Damages are generally inadequate for uncertain future infringements.

Phonographic Performance Ltd, a collecting society administering rights in sound recordings, sought default judgments against businesses using its repertoire without licences. Chadwick J ordered inquiries as to damages and costs but limited the injunctions, first to six months and later to seven months, with a commencement delay and liberty to apply: [1997] 3 All ER 673. PPL appealed the limitation of the injunctions in the two 1997 actions. It did not pursue the appeal concerning Mr Maitra. The central issues were whether default judgment deprived the court of discretion over injunctive relief, and whether PPL’s licensing and enforcement practice justified a time-limited injunction or damages in lieu.

Disposition. The judgment of the court, delivered by Lord Woolf MR, allowed PPL’s appeals in the two 1997 actions. The injunctions were to take the normal form sought by PPL. There was no order as to costs. The appeal in the Maitra action was not pursued.

1. Default judgment. Rule 7(1) of the Rules of the Supreme Court is permissive. It does not turn the judge into a judicial rubber stamp or remove the discretion under section 37 of the Supreme Court Act 1981 to refuse an injunction or impose just terms. The same principles apply whether the discretion is exercised on default judgment, under the summary judgment procedure or after trial.
2. Evidence and pleaded facts. Default judgment ordinarily proceeds on the pleaded facts, which are admitted or deemed admitted. That principle is not rigid where the judge must exercise discretion over an injunction. Relevant facts not deemed admitted may be brought to the court’s attention by affidavit or otherwise, and the judge may seek an explanation.
3. Injunctions for continuing infringement. Where copyright infringement and a threat of further infringement are established, the ordinary order is a final injunction without restriction, particularly where the defendant has not participated in the proceedings. A collecting society’s quasi-monopoly position does not, without more, justify different relief. Licensing disputes may be referred to the Copyright Tribunal, and an action may be stayed on appropriate terms where necessary.
4. Abuse and delay. PPL was entitled to require appropriate payment for past unauthorised use and future licensed use. Using an injunction to prevent unlicensed use was not an abuse merely because it encouraged payment or cessation. On the admitted facts, there was no justification for a 28-day suspension or a seven-month limit. Allowing further knowing infringement during the suspension was wrong and could involve a criminal offence under section 107(3)(b) of the Copyright, Designs and Patents Act 1988.
5. Damages in lieu. Damages under section 50 of the Supreme Court Act 1981 were inadequate. The duration of future infringement could not be estimated, and damages ordinarily compensate loss caused by past infringement. The court should not frame an injunction as a licence where no general right exists to compel the copyright owner to grant one. A defendant may seek to set aside an injunction if there is no intention to infringe, or discharge it if its use is abused.

• Court of Appeal (Civil Division): allowed PPL’s appeals in the two 1997 actions and restored injunctions in normal form: [1998] EWCA Civ 137.
• Chancery Division: Chadwick J granted default judgments, inquiries as to damages and costs, but restricted the injunctions by a commencement delay and a maximum duration, with liberty to apply: [1997] 3 All ER 673.