Iain McDougall

Like most law firms we are seeing trends in certain types of litigation as a result of COVID-19. As expected, we have been asked to assist clients with disputes regarding rental premises, interruption to business and force majeure as a result of lockdown measures taken by the UK government.

In a somewhat unexpected development, we have also seen an increase in the number of copyright infringement claims being received by our clients.

These fit in to broadly two categories:

• In a number of cases claims have been received from German lawyers on behalf of claim handling websites which allow copyright holders to upload material (principally images) to an application which in turn searches for instances of unauthorised use on the web. What follows is a “cease and desist” letter issued by a German law firm on behalf of the copyright holder with an accompanying demand for payment of damages and legal fees.
• Customers who already have licences to use copyrighted materials (fonts, graphics etc) receiving claims from the copyright owners claiming that they have exceeded the use permitted under their licence terms and seeking either an uplift payment or the negotiation of new licences.

Why are we seeing an increase in these sorts of claims?

Firstly, rights holders may be under some financial pressure themselves. They may not be getting new work in. As such a photographer who is not receiving new commissions might want to see what additional income can be generated from their existing portfolios of work if it turns out photographs have been used online without their permission.

Likewise licensors of copyrighted material may also be tempted in the current climate to review what licensing arrangements they have in place with their existing customers and to carry out audits to see whether any overuse has taken place. Again, this goes back to seeing what additional income can be legitimately generated from their existing IP portfolios and customers.

Secondly, developments in AI and search technology mean that infringing materials can be more easily identified by claims handling websites and letters of claim can be prepared on a more commoditised or automatically generated basis by law firms working on their behalf.

….And why do they appear to be coming from Germany?

A number of these claims have been made by German lawyers (even in circumstances where neither the rights holder nor the alleged infringer has any connection to Germany). This may be down to the location of the “claims handling” websites. There is also an element of “forum shopping” in that the German courts have a prescribed damages and legal costs table for copyright infringement cases which make these sorts of matters attractive to litigate in Germany.

It might be tempting to write off such claims, especially those coming from foreign jurisdictions, as being a shakedowns and the work of copyright trolls. Especially in circumstances where the legal fees being claimed by the lawyers making the claim are around the same level or more than the actual damages being demanded for the alleged infringement.

That said these sorts of claims should still be taken seriously, investigated and legal advice should be sought. Care should be taken before responding to correspondence received or taking any steps to take down the material complained about (even in circumstances where you may believe you are entitled to reproduce it).

Before responding careful consideration should be given to:

• Does the purported rights holder actually own the copyright materials they claim have been infringed? Does the correspondence adequately set this out or can this be challenged?
• Has infringement taken place or has the material been used with the copyright holder’s permission or for some legitimate reason?
  What about the damages being claimed, do these appear to be excessive?
• What jurisdiction is the claim being made in, does it have any legitimate connection to the parties, and can this be challenged?

In cases involving the alleged overuse of licences – the above questions should also be asked. Thought should also be given to whether your current licences actually do cover the “unauthorised” use complained off and whether a sound methodology has been used by the licensor in calculating any uplift.

We expect to see more of these sorts of claim in future and would be interested to hear from companies and individuals who receive such claims.

Iain McDougall is a senior associate at MBM Commercial