The Judgement of the Court of Justice (Fifth Chamber) of 25 January 2017 resolves a referral raised for preliminary ruling concerning the case between Stowarzyszenie “Oławska Telewizja Kablowa” (OTK) and Stowarzyszenie Filmowców Polskich (SFP), in relation to the interpretation of Article 13 of Directive 2004/48/EC.

The question referred for preliminary ruling is whether Article 13 of Directive 2004/48 is to be interpreted as precluding national legislation, whereby the holder of an infringed intellectual property right may choose to either request the infringer of that right for compensation for the prejudice suffered, or for damages for the prejudice sustained bearing in mind all the relevant aspects of the case in question, without having to prove the actual damage and the causal link between the act causing the infringement and the prejudice suffered, amounting to twice or, in the event of a culpable infringement, triple the amount of suitable  remuneration than that which would have had to be settled for authorising the use of the work concerned.  Wilful infringement was finally not examined in the case as this was declared unconstitutional by the national court of the State and, consequently, a hypothetical question which therefore cannot be accepted.

The Court assumes that the intention of the Directive is for an effective enforcement of substantive law regarding intellectual property in the European Union, and establishes a minimum benchmark of respect for intellectual property, but does not prevent Member States from establishing more protective measures, therefore Art. 13.1.b) of the Directive is to be interpreted in the sense that it does not preclude  national legislation, which states that the holder of the economic author rights that have been infringed may claim compensation from the person infringing such rights for the prejudice caused, via payment of an amount corresponding to twice the hypothetical royalty fee.

Furthermore, it states that this cannot be called into question by the fact that the compensation calculated on the basis of twice the hypothetical royalty is not exactly proportional to the actual prejudice suffered by the aggrieved party; nor due to the fact that the Directive does not aim to impose an obligation consisting of providing for punitive damages, as this must not be interpreted as prohibiting the adopting of a measure of such nature.

Moreover, it points out that the payment of this hypothetical royalty does not guarantee compensation for all the actual prejudice suffered, as it does not guarantee the reimbursement of possible expenses linked to the investigation and identification of possible infringements, or compensation for non-material damages, or the payment of interest on the amounts due either.  If these were to considerably exceed the damage actually suffered, this could constitute an abuse of rights, which is forbidden under Article 3.2 of the Directive.

In conclusion, Article 13 of Directive 2004/48 is to be interpreted in the sense that it does not preclude national legislation, according to which the holder of an infringed intellectual property right may request the person infringing that right for compensation for the prejudice suffered, or damages for the prejudice sustained bearing in mind all the relevant aspects of the case in question, without the holder having to prove the actual damage, amounting to twice the sum of the appropriate fee which would have been due if permission had been given for the work concerned to be used.