World TV Limited & Ors v Best TV Limited & Anor
High Court Auckland
6 September 2006
This case concerned an award of additional damages under s121(2) of the Copyright Act 1994 (NZ). The issue was a factual one as to what additional damages should be awarded in all the circumstances, particularly having regard to the flagrancy of the defendant’s infringement of the plaintiff’s rights. The case is noted for the quantum of the additional damages.
Both World TV and Best TV operated subscription-based Asian language television services New Zealand. World TV claimed that it had licensed the New Zealand rights to certain Chinese language programmes on an exclusive basis and alleged that Best TV was broadcasting these programmes in breach of copyright.
The case commenced with an interim injunction enjoining Best TV from continuing to broadcast the programmes in New Zealand until the substantive issues were determined. Further plaintiffs and an additional defendant were subsequently joined to the proceedings as a result of doubts expressed by the judge hearing the injunction as to whether World TV had adequately proved its rights in respect of all programmes.
The substantive claim went ahead on an undefended basis. A permanent injunction issued and compensatory damages were awarded against Best TV. World TV and the other plaintiffs then applied for additional damages under s121 of the Copyright Act 1994 in reliance on the flagrancy of the defendant’s copyright infringement. S121(2) off the Copyright Act 1994 provides:
“2. In proceedings for infringement of copyright, the Court may, having regard to all the circumstances and in particular to -
(a) The flagrancy of the infringement; and
(b) Any benefit accruing to the defendant by reason of the infringement, -
award such additional damages as the justice of the case may require.”
As is clear from the wording of the section, in making an award of increased damages, the Court may have regard to all the circumstances and in particular that the flagrancy of the infringement and any benefit accruing to the defendant through it. The Court observed that “in effect, the compensatory damages, once paid, will therefore largely if not wholly, cover the benefits accruing to the defendants by treating them as if they were paying a commercial licence fee for doing what they did”.
The Court then canvassed earlier authorities under equivalent provision in the 1962 Copyright Act in which the Court of Appeal had held that the normal criteria for an award of exemplary damages is transferable to an award of additional damages and the tests were “whether the infringement was flagrant, whether there was a scandalous conduct and whether it was in total disregard of the plaintiffs’ legal rights and other circumstances”.
In applying that test, the Court held that the defendants “must have known full well that they had no justification in broadcasting the programmes for which the defendant held the New Zealand rights, particularly when, as they paid no licence fees, their rebroadcasting was not only more profitable to them than to the plaintiff but also, through their offering lower subscriptions, likely to damage World TV and, by extension, its licensors. Only the injunction of 3 June 2005 put a stop to their infringement”.
Against that, the Court noted that although the infringements were repeated, they were to a relatively small sector of the New Zealand television market and the plaintiffs, while suspecting the effect on their businesses, were unable to prove that they in fact suffered from the defendant’s actions. It is also noted that by the time the application came to be considered neither defendant had been broadcasting for nearly a year.
Taking all those factors into account, the Court concluded that this was an appropriate case for an award of additional damages and that such an award should be joint and several as between the plaintiffs for them to apportion. Accordingly the Court made an award in favour of all plaintiffs against both defendants on the copyright infringement claims of $15,000.