Redrow Homes Ltd and Others v. Bett Brothers Plc and Others (Scotland)

The House of Lords considered the construction of sections 96 and 97 of the Copyright, Designs and Patents Act 1988 and held that a claimant in an action for copyright infringement cannot obtain both an account of profits and a separate award of "additional damages" under section 97(2). The court treated section 97(2) as an enhancement of an award of ordinary damages rather than as a freestanding remedy available alongside an accounting of profits.

In reaching this conclusion the court relied on the statutory context (including section 172, which requires Part I to be read as restating earlier law), the natural meaning of "additional damages", the similar wording of the design-right provision (section 229), and the legislative history (section 17 of the Copyright Act 1956 and the Whitford Committee report). The court also concluded that the earlier decision in Cala Homes (South) Ltd v Alfred McAlpine Homes (East) Ltd (No 2) [1996] F.S.R. 36 was wrongly decided. The court did not need to decide whether additional damages are punitive or compensatory for the purposes of its construction.

Background and parties: The pursuers were residential developers who owned copyright in house designs. They averred that the defenders, who were in the same business, had built houses which were flagrant copies of the pursuers' designs.

Relief sought: The pursuers sought (i) an order for production of a full account of profits realised by the defenders and payment equivalent to such profits, and (ii) a sum of money as additional damages under section 97(2) of the Copyright, Designs and Patents Act 1988.

Procedural posture: After a Procedure Roll hearing the Lord Ordinary allowed a proof before answer on the averments. On reclaiming motion the Second Division sustained the defenders' plea to the relevancy of the pursuers' averments concerning additional damages (interlocutor of 14 March 1997). The pursuers appealed to the House of Lords.

Issues framed:

• Whether "additional damages" under section 97(2) is a distinct, standalone remedy that can be awarded in addition to an account of profits, or whether it is an enhancement of ordinary damages and therefore incompatible with an accounting.
• Whether Parliament, in re-enacting the earlier law in the 1988 Act, intended to change the effect of the previous section 17(3) of the Copyright Act 1956 by omitting particular wording.

Court’s reasoning and decision: The House of Lords concluded that section 97(2) should be read as an addition to an award of ordinary damages rather than as a separate remedy. The court relied on the ordinary meaning of "additional damages", the structure of Chapter VI of Part I of the Act, the analogous wording of the design-right provision (section 229), and section 172(1)–(2) confirming that Part I restates and amends the previous law and should not be construed as departing from it merely because of a change of expression. The court held that Parliament had not used clear words to create a novel remedy and that the omission of the phrase "in assessing damages for the infringement" did not indicate an intention to permit additional damages alongside an accounting. The House of Lords dismissed the appeal and held Cala Homes to be wrongly decided. The court did not decide whether additional damages are punitive or compensatory since the construction point was dispositive.

Appeal dismissed. The House of Lords held that section 97(2) of the Copyright, Designs and Patents Act 1988 must be read as providing "additional damages" as an enhancement to an award of ordinary damages and not as an independent remedy that can be awarded in addition to an account of profits; accordingly a claimant cannot pursue both an account of profits and an award of additional damages under section 97(2).

Lord Ordinary allowed a proof before answer on the pursuers' averments; on reclaiming motion the Second Division sustained the defenders' plea to the relevancy of the averments concerning additional damages (interlocutor of 14 March 1997). The decision of the Second Division was then appealed to the House of Lords (this court).