Redrow Homes Ltd v Bett Brothers Plc

Additional damages under section 97(2) of the Copyright, Designs and Patents Act 1988 enhance an award of ordinary damages. They are not a self-standing remedy additional to any form of financial relief.

A copyright owner who elects an account of the infringer’s profits cannot also recover additional damages. This reflects the basic incompatibility between damages and an account of profits. The factors specified in section 97(2), including flagrancy and any benefit accruing to the infringer, affect the amount of damages but do not alter the character of the remedy.

The appellants owned copyright in designs for detached houses. They alleged that the respondents had built flagrant copies and sought both an account of profits and additional damages under section 97(2) of the Copyright, Designs and Patents Act 1988.

The Lord Ordinary allowed a proof before answer on all averments. On reclaiming motion, the Second Division sustained the respondents’ plea that the claim for additional damages was irrelevant. The appellants appealed to the House of Lords.

The issue was whether section 97(2) created a self-standing remedy which could be awarded alongside an account of profits, or merely permitted an enhancement of ordinary damages.

1. The appeal was dismissed unanimously. Lord Jauncey of Tullichettle and Lord Clyde delivered reasoned speeches. Lord Goff of Chieveley, Lord Slynn of Hadley and Lord Hope of Craighead agreed with both.

2. Per Lord Jauncey, sections 96 and 97 of the Copyright, Designs and Patents Act 1988 did not make additional damages an independent remedy. The natural meaning of “additional damages” was damages additional to ordinary compensatory damages. A copyright owner therefore could not obtain them after electing an account of profits.

3. Per Lord Clyde, Chapter VI constituted a statutory code of remedies for copyright infringement. Section 96(2) identified the available remedies; section 97(1) derogated from that scheme for innocent infringers; and section 97(2) embellished the remedy of damages. Its location in a separate section did not make it self-standing.

4. Per Lord Jauncey and Lord Clyde, section 17(3) of the Copyright Act 1956 had permitted additional damages only while ordinary damages were being assessed. Section 172 of the 1988 Act prevented a corresponding provision from being treated as departing from the former law merely because its expression had changed. Clear words would have been required to transform additional damages into a remedy compatible with an account of profits.

5. Per Lord Jauncey, the corresponding design-right provisions in section 229 reinforced this construction. The nearly identical words could not sensibly create materially different remedies. Per Lord Clyde, a “benefit” under section 97(2) could extend beyond net profits, such as an enhanced market position, but that wider meaning did not permit additional damages alongside an account.

6. Cala Homes (South) Ltd v Alfred McAlpine Homes (East) Ltd (No 2) [1996] F.S.R. 36, which treated additional damages as available with any financial relief under section 96(2), was wrongly decided. It was unnecessary to decide whether additional damages were punitive or compensatory because, on either view, they remained damages. The interlocutor of the Second Division was affirmed.

1. House of Lords: Dismissed the appeal unanimously and affirmed the Second Division’s interlocutor of 14 March 1997.

2. Second Division of the Court of Session: On reclaiming motion, sustained the respondents’ plea that the averments seeking additional damages alongside an account of profits were irrelevant.

3. Outer House of the Court of Session: The Lord Ordinary allowed a proof before answer on all the appellants’ averments.