What is the price of copyright infringement?

The legal environment has been moved by the Constitutional Court ruling of 23 June 2015 (SK 32/14), in which the Court held that three times the remuneration for culpable violation of copyright is incompatible with the Polish Constitution. The problem is that this subject did not make it to the minds of Polish creative industry. And even if it did, it did not stay there permanently. And it should. So what does this ruling mean in practice?

What was it like before?

In the past, culpable copyright infringement (e.g. by using a newspaper article, releasing a CD or a book without a license, copying the source code of a computer program for your own application or game, exploiting a film or an advertisement without appropriate permission, etc.) posed for the violator a risk, among others, of paying three times the remuneration which would be payable for the approval of use of the work by an entitled person. This right was included in Article 79, section 1 item 3 letter b of the copyright law and related rights. In the case of failure to prove guilt – double remuneration could be requested. The violator knew, therefore, that if he or she requested permission to use the work, he or she would have to pay a license fee. The violator also knew that if he or she did not do so, and gets caught, he or she will have to pay three times that amount.

What did the Court say?

The Court held, however, that such a mechanism is not compatible with Article 64 sections 1 and 2 in conjunction with Article 31 section 3 and in conjunction with Article 2 of the Constitution, i.e. with the principle of respect for and the protection of human freedom and the principle of equal protection of legal ownership and other property rights. Simply put, the Court declared this mechanism is disproportionate and too repressive against the perpetrator (more on this in our earlier post).

What are the consequences of the Constitutional Court ruling?

Currently, those entitled are left with claiming twice the remuneration due or – which is practically very little in the case of copyright infringement – demanding compensation for damages of general terms. Of course the entitled is allowed to submit other claims, but they either do not have a real economic nature, or their practical effectiveness is much weaker. In the doctrine there are even voices (in my opinion – unfounded) that seek twice the amount due should also not take place. Although the double amount remained in our law, it cannot be excluded, however, that the next case at the Constitutional Court will result in the further weakening of the creative industry’s position.

Then, the potential perpetrator calculating whether it is worth committing the violation, or even adopting a business model built on copyright infringements, could lead to the conclusion that it is economically more profitable not to obtain the permit from the entitled. In the end, not all violations will come to light, not all of these revealed will go to courts, and in the court the entitled will be able to claim de facto only the equivalent of the license that the perpetrator who wanted to run the business legally… would have to pay anyway.

Conclusions?

The creative industry should not remain passive and should expect and demand from the legislature urgent intervention. The provision challenged by the Court should be constructed in such a way that it provides practical and meaningful protection for the entitled, leaving, however, flexibility to the law courts.

The article originally appeared in Puls Biznesu on 19 November 2015.