Hi Phil,
First of apologies for a number of typos (not typonoughts) in my last piece which I will go back a correct shortly. A combination of re-jigging my earlier intended response and too much haste, together with a spell-checker that doesn't read my mind!
You asked about 'punishments'. Strictly speaking if an infringement is treated as a civil matter there are no punishments, merely 'remedies'. Perhaps the distinction is moot when damages and costs can amount to far more than fine for a criminal conviction. The criminal provisions in the Act are reserved for infringement on a fairly large scale and would generally require the CPS to agree that a prosecution was in the public interest. Trading Standards would be most likely to pursue a typical criminal IP case, although both the Police and HMRC do also bring prosecutions, depending on the area in which the alleged infringement is taking place, so for instance importation of counterfeit DVDs would be more likely to be handled by HMRC, whereas someone selling fake DVDs in a pub might well be dealt with by the police. Organisations such as the Federation Against Copyright Theft (FACT) tend to work closely with Trading Standards. If your company is in the unfortunate position of facing a criminal investigation, then probably the first you will know about it is when Trading Standards or the Police turn up with a warrant to search your company's premises. Matters will then proceed at a bureaucratic pace with interviews under caution and ultimately a summons to appear in a magistrates court. It is the directors or owners of the company who are most likely to face the music in a criminal action. Fines and prison sentences of up to 10 years are available, but only for the most egregious cases.
But if a film company wants to pursue a civil action (much more likely because they then control the procedure to a greater degree) then the first you are likely know about it is the arrival of a 'Cease and Desist' letter. This is very much what it suggests: if you comply and stop producing the goods complained of that may well end the matter. However where some of the big studios are concerned a c&d doesn't have sufficient deterrent effect on others, so they are much more likely to be going for litigation, leading either to a hefty out of court settlement or a victory in court. Before they can do this the court's rules of procedure require that their legal team issue you a 'letter before action'. This can in fact be a c&d letter with added bits which comply with the court's directions on such matters. If they fail to get it right at this stage it is possible the court (the High Court) could decline to accept the Particulars of Claim (a special form the court issues on which the complainant itemises his case against your company) until the letter before action has been issued satisfactorily. (Have a look at
this case in which the aforementioned HHJ Birss lays into a bunch of ne'er-do-wells who might be referred to as copyright trolls, for their sloppy drafting of letters of claim sent to the alleged infringers. As this was an interesting case it is worth reading about the
follow-up hearing a couple of months later.
Anyway back to the main issue. What happens next is largely at the discretion of the complainant, especially if they have deep pockets and are out to make an example of your company. Clearly if you look to settle they will press for as much as they think they can extract from the company. The key here is not to make it easier for the company to go into voluntary liquidation or otherwise cease trading, as there would then be no assets for the complainant to go after, beyond any limited liability of the directors. But if settling is not an option (at least at this stage) then the litigation will proceed to court. The first stage here will be a decision by the judge in charge of the lists how to deal with the case. As I mentioned all copyright cases must heard in the High Court, but the High Court runs its own special version of a county court (currently known as the Patents County Court, but this is due to change shortly when the
Crime and Courts Bill becomes law). The PCC handles smaller cases in a more streamlined manner with a cap on the total amount of costs and damages which can be awarded. If the list judge decides to case is too complex or that the amounts involved are too great the case will be heard in the Patents Court of High Court which sits within the Royal Courts of Justice in London (this in contrast to the PCC which can sit in a number of regional courts which have a High Court Registry)
Following listing the court will hold a case management conference to examine issues such as how long the case may last (based on what evidence each side wishes to submit and whether all witnesses will have attend in person to face cross-examination or if their written statements will suffice). The CMC is also the first opportunity to get directions from the court over issues such discovery. A direction is basically an order issued by the court for one or both parties to do something. Discovery means the release of documents requested by one party from the other which they think will assist their case. The court will not sanction 'fishing expeditions' as part of discovery.
There may need to be further CMCs. A new procedure which has been particularly evident in the PCC but now applies in all civil cases, is costs management. This involves the court keeping a close check on the costs which are being run up by both sides. This is too complicated to go into here, but suffice to say that it helps a party decide when to go for settlement rather than continue proceedings in court, irrespective of the merits of their case.
So finally if the court finds against your company, it will hear argument from the complainant's counsel about what remedy is sought. In fact these details will already be known because they should be in the Particulars of Claim, and form part of the listing and CMC process, such that a claim for a trivial amount would be struck out early on, on the grounds of de minimis and a waste of the court's time. There are four basic remedies: an injunction to prevent further infringement in the future; damages or an account of profits; an order for delivery up of all remaining infringing copies, and an order for their destruction if that is appropriate.
An interim injunction can be issued before the full case is heard if the court accepts that the complainant faces continuing financial or other detriment from the alleged copying while the case continues. In practice it is rare for interim injunctions to be granted because any financial damage resulting from sales etc during the court case can be added to the damages/account of profits awarded after judgment. Damages will be a figure assessed by the complainant of what he considers he has lost through the infringement. Typically this could be based on the amount he would earned from licences had they been issued to the defendant. There can sometimes be a element of punitive damages if the infringement has been flagrant or the complainant can show other losses, say to the reputation of his goods or company name. An account of profits is an alternative to damages, and consists of assessing the profits made by the defendants through their infringement. Delivery up means seizure and forfeiture of any remaining infringing copies. Destruction may not always be ordered. For instance some counterfeit clothing has in the past been seized but issued in bond to a charity which undertakes to remove the labels etc and transfer the goods to an overseas territory where the genuine clothing is not sold, as aid to poorer families. Thus some genuine good can come out of an otherwise soul-destroying experience.
I was going finish by saying that is just a brief over-view, but it is far from brief, I fear. Nevertheless I have left out a lot of details. If you company does receive any form of communication from a studio or film production company it is probably a wise move to get legal advice at that early stage, because an incorrect decision at that point could cost the company far more money later on, than the cost of the advice. However I would suggest using firm of solicitors with IP experience as they will understand the system somewhat better than a firm which normally deals with family law or criminal cases.
I need to find an avenue of attack that increases our portfolio instead of reducing it soon or I'll get lynched by our designers.
