Phonographic Performance Ltd v Hagan & Ors (t/a Lower Ground Bar and the Brent Tavern)

Additional copyright damages under Copyright, Designs and Patents Act 1988, s.97(2), require particular regard to the flagrancy of the infringement and the benefit obtained. Knowledge of infringement may be inferred from previous licensing, warnings and continuing infringement. The court may consider deterrence of both the defendant and other actual or potential infringers. Relief under s.97(2) and art.13(1) of Directive 2004/48/EC should not produce double recovery, although distinct non-economic relief may remain available in appropriate cases. A successful claimant’s Part 36 benefits override the IPEC costs caps where the rules otherwise create a conflict. Those benefits must nevertheless be exercised proportionately while preserving the strong incentive to make and accept Part 36 offers.

The claimant sought additional damages, interest and further costs relief following copyright infringement proceedings concerning the playing of sound recordings in two public houses without a licence. Judgment had already been entered for damages, and the defendants’ appeals had been refused. The remaining issues included the interaction between s.97(2) of the Copyright, Designs and Patents Act 1988 and art.13(1) of Directive 2004/48/EC, and the consequences of the claimant’s Part 36 offer made on 2 October 2013.

1. Additional damages. The first defendant knowingly infringed copyright. His previous PPL licence, repeated correspondence, infringement after commencement of proceedings and the general knowledge of licensing requirements in the hospitality industry established that knowledge. The infringements were flagrant, although not on a large scale. An award of £2,000 was therefore made under s.97(2) of the Copyright, Designs and Patents Act 1988.
2. Section 97(2) and art.13(1) of Directive 2004/48/EC provide overlapping remedies. They may not be applied cumulatively to produce double recovery. Article 13(1) focuses on prejudice suffered by the rights-holder, whereas s.97(2) is particularly concerned with flagrancy. The court may take account of deterrence both of the defendant and of other infringers.
3. Part 36. The claimant’s judgment was more advantageous than its offer. The claimant was consequently entitled to the relief under CPR rule 36.14(3), subject to the court’s discretion to avoid disproportionate consequences. Following Broadhurst v Tan [2016] EWCA Civ 94, and applying the reasoning by analogy, rule 36.14(3)(b) overrides the IPEC costs limits in rule 45.31. Indemnity costs from 25 October 2013 were therefore not subject to the stage caps or overall cap.
4. The court awarded interest at 4% above base rate on damages from 25 October 2013, 2% above base rate before that date, and judgment-rate interest thereafter. Interest on indemnity costs was set at 4% above base rate. The claimant also received an additional amount of £1,338, being 10% of the damages awarded.
5. The claimant’s pre-transfer High Court costs were payable on the standard basis without the PCC caps. Later costs were subject to the applicable stage caps, but the costs of hearings concerning the defendant’s identity fell outside the overall cap under CPR rules 63.26(2) and 45.32. The defendant’s conduct was unreasonable but did not amount to an abuse of process.

The judgment records that permission to appeal earlier orders was refused by the High Court and the Court of Appeal. This judgment determined the remaining claims for additional damages, interest and costs consequences.