FBT Productions, LLC v Let Them Eat Vinyl Distribution Ltd

In a copyright damages inquiry, loss of an opportunity must be proved as caused by the infringement. The claimant must establish a real, substantial opportunity rather than a speculative possibility, and must show that the infringement was a common-sense cause of the loss.

Where damages are assessed by reference to a notional licence, the court considers what reasonable parties would have negotiated at the date of infringement. The assessment concerns the actual parties, the right infringed and the period of infringement, while reflecting the commercial circumstances and any relevant non-infringing alternative. Comparable licences may assist, but must be treated cautiously where their terms or rights differ materially.

The claimant owned copyright in an album and alleged that the defendant infringed it by manufacturing vinyl copies. Liability had been established in [2019] EWHC 829 (IPEC). The present trial concerned quantum.

The claimant sought damages for loss of an opportunity to release the album and related singles, losses representing a licence fee, or a reasonable royalty based on a hypothetical willing licensor and willing licensee negotiation. The central issues were whether the infringement caused the alleged lost opportunities and, if not, the proper basis for assessing a notional royalty.

1. Loss of opportunity. The principles summarised in SDL Hair Ltd v Next Row Ltd applied. Damages are compensatory. The claimant bears the burden of proving loss, causation and recoverability. Causation is determined on the balance of probabilities, but the quantification of an uncertain future benefit may require a percentage assessment. For a past loss dependent on a third party’s hypothetical act, the claimant must show a substantial rather than speculative chance.
2. The infringement did not cause the alleged loss of the opportunity to release vinyl records. The claimant discovered the defendant’s copy in August 2016, but continued planning the reissue and publicising it thereafter. The evidence did not establish that the infringement caused abandonment of the project. The infringement likewise did not cause loss of an opportunity to make a documentary. Those claims failed.
3. Licence fee. The claimant’s own evidence was that it would not have licensed the defendant, which was not an attractive potential licensee. No damages were therefore recoverable on that basis.
4. Notional royalty. The principles stated in Henderson v All Around the World Recordings Ltd applied. The hypothetical negotiation concerned a licence to make the infringing copies in the United Kingdom for the period and in respect of the right actually infringed. The court considered the actual parties, their commercial circumstances, the nature and reputation of the licensor, the quantity of copies, the likely pricing and manufacturing economics, and relevant comparable agreements.
5. The agreement with Boogie Up Productions was a useful, though imperfect, comparator because it concerned vinyl production in the United Kingdom and used a per-record fee. Its defects included the grantor’s lack of valid rights and the different contractual structure. The digital agreement with AWAL was not a helpful comparator because its revenue split did not reflect the manufacturing and distribution economics of physical vinyl.
6. The appropriate hypothetical fee was £2.50 per copy. Damages were therefore assessed at £7,452.50, based on 2,981 copies, together with appropriate interest. The claims for lost opportunity and licence loss were dismissed.