Johan Hendrik Cornelis Kemp v. Sing Pao Newspaper and Publications, Ltd
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Action No. 18715 of 1993 HEADNOTE Copyright – Photographs – Proof of ownership – principles for assessing damages for infringement. IN THE DISTRICT COURT OF HONG KONG CIVIL JURISDICTION ACTION NO. 18715 OF 1993 _________________________
_________________________ Date: 15th August 1994 Coram: H.H. Judge Downey in Court JUDGMENT 1. The Plaintiff in this case is a freelance professional photographer. He has resided in Hong Kong for three and half years. He is known professionally as Hans Kemp. He practises his profession by travelling around Asia and looking for interesting features to photograph and write about with a view to selling his “packages” to publishers of glossy magazines. In August 1992 he went to Saigon or Ho Chi Minh City, as it is now known. He took some photographs of a horse-race meeting, using coloured slide film. The occasion was the revival of horse-racing and gambling thereon in Vietnam. In February 1993, six of these photographs, accompanied by texts and captions in Japanese based on texts etc. prepared by the Plaintiff, were published in a Japanese glossy magazine called ASASHIGRAPH. The Plaintiff’s package was published in the edition of the 19th February 1993 and appears at pages 7 to 21 of the Agreed Bundle (“AB”). 2. The Defendant is the publisher of a newspaper circulating in Hong Kong, known as the Sing Pao Daily News. It admits publishing six photographs about horse racing in Vietnam in its edition of the newspaper for the 27th February 1993. However, it denies that by doing so it infringed the Plaintiff’s copyright in his photographs. Indeed, the Defendant expressly denied, in its defence filed on the 15th December 1993, that the Plaintiff was the owner of the copyright in the six photographs. In general, it put the Plaintiff to strict proof of his claims and did not advance any positive case against the Plaintiff’s claims. Nevertheless, although it did not expressly plead innocent infringement, one of the Defendant’s directors claimed that the Defendant had no knowledge of “the alleged subsistence and ownership of copyright in the photographs in question …” (paragraph 2 of witness statement of Susanna Ho Cheuk Chi (P.W13 AB). 3. At the outset, I must express my indebtedness to Miss Leong and Miss Tam for their comprehensive and helpful oral and written submissions, which have greatly enabled me to focus attention on the three essential issues or questions in this case. In my view, they are as follows: -
4. The third issue or question should perhaps be subdivided into two categories. In view of the somewhat strange way in which the prayers for relief are expressed in the particulars of claim. But, I think that it is fair to say that the bulk of counsel’s efforts to ensure that I adhered to correct principles were directed to the difficult question of the measure of damages for infringement (if proved), where the Plaintiff does not seek “additional damages” or “conversion damages” in accordance with the provisions of Sections 17(3) and 18 of the Copyright Act 1956. 5. With regard to the first issue, I make the following findings of fact on the basis of the unchallenged evidence of the Plaintiff. I am satisfied that the Plaintiff was a “qualified person” at the time when he took the photographs in 1992, and when they were first published in February 1993, because I am satisfied that he was resident in Hong Kong at the material times. On behalf of the Defendant, Miss Tam submitted that the Plaintiff had not proved that he was the author of the photographs because he had not proved that he was the owner of the film which was used to produce the photographs published in the Japanese magazine in question. I accept that the Plaintiff did not state in his witness statement (W1-4) or his evidence that he was the owner of the film used to produce the slides of the six photographs. But in my judgment, the only reasonable inference to be drawn from the actual evidence, most of which was not disputed by the Defendant, is that the Plaintiff was the author of the copyright in the photographs in question. 6. The Plaintiff’s evidence that he was self-employed when he took the photographs in question, coupled with the fact that the six slides (Exhibit P3) bear his name and are still in his possession notwithstanding their reproduction in the Japanese magazine; and his denial that he was “commissioned” to take the photographs is, in my view, more than sufficient to justify a finding that the film used by the Plaintiff was his property. Freelance photographers do not normally use cameras or film owned by others. In any event, in the unlikely situation of a freelance (or amateur) photographer “borrowing” a roll of film from another person, copyright in the images recorded on that film must surely belong to the photographer, simply on the basis that he or she is the owner of the film at the material moments. The former owner does not expect the film to be returned in its original condition. The original owner or supplier must intend to transfer property in the film to the “borrower” unless he is employed or “commissioned” by some other person. In my view, there is no evidence to even suggest that the Plaintiff was not the owner of the film used to produce the slides in question (Exhibit P.3). I am satisfied that these slides were used, with the Plaintiff’s permission, to produce the pictures which appeared in the Japanese magazine (Exhibit P.1), published on or about the 19th February 1993. In all the circumstances, I am satisfied that the Plaintiff was the owner of the copyright in the slides in question. I reach that conclusion as a matter of inference from the unchallenged evidence in this case. Furthermore, the Plaintiff is entitled to rely on the presumptions in Section 20 of the Act, since his name clearly appears on the copies in the Japanese magazine; and no evidence to the contrary has been adduced. 7. With regard to the second issue I do not think the Defendant seriously disputes infringement. Mr. Lau Wong Hong, the Deputy Chief Reporter of the Sing Pao Daily News and Miss Susanna Ho proclaimed complete ignorance of the source of the six photographs in Exhibit P.2. Both of them asserted that the Defendant had no knowledge of the subsistence or ownership of copyright in the six pictures. Miss Ho testified that the Defendant did not acquire them from any of the agencies mentioned in her witness statement dated the 8th July 1994 (W13-15); but asserted that the newspaper paid about HK$500 for the pictures. She was unable to produce any invoice or receipt. Mr. Lau sought to place all responsibility for the publication of the six photographs in the edition of the newspaper for the 27th February 1993 on the then editor of the relevant page, Mr. Chan Tze Dor, who died on the 25th April 1994. Apparently, nobody on behalf of the Defendant thought of asking Mr. Chan in 1993 where or how he obtained the six photographs. Indeed, it would seem from Miss Ho’s evidence that the Defendant has no internal practice, policy or guidelines for tracing the source of photographs which it publishes in its newspaper. 8. The Plaintiff’s complaint was first brought to the notice of the Defendant by a letter from his solicitors dated the 3rd March 1973 (P24AB). Since then it seems that the Defendant has taken no steps to investigate or consider the Plaintiff’s complaint. Instead, it has adopted the stance, at all stages of these proceedings, of denying any wrong-doing on its part. For my part, I do not believe the evidence of Miss Ho or that of Mr. Lau. In fairness to Mr. Lau, he should not be criticised for the contents of his witness statement (W9-11AB) because he does not read English. Responsibility for the false or misleading features of his statement must be placed on the Defendant or the person who prepared the witness statement on its behalf. The fact remains that, having seen and heard Miss Ho and Mr. Lau in Court, I totally reject their testimony. I am unable to believe Miss Ho’s evidence. In the case of Mr. Lau, I cannot rely on his evidence because he is simply incompetent to testify on the issue of infringement; and his evidence on the question of damages is worthless, for reasons I will give later. At the end of the day, the result is that there is no evidence to contradict the Plaintiff’s contention, in paragraph 14 of his witness statement (W3AB), that the Defendant scanned the 6 pictures in Exhibit P2 from the Japanese magazine (Exhibit P1). Indeed, that is the only reasonable inference to be drawn from the undisputed facts in this case. The Plaintiff’s denial of licensing the publication by the Defendant has not been questioned. The Defendant has not called any evidence to support a licence to publish the six photographs from any other person. The claim that it is, or was, ignorant of the subsistence of copyright in the six photographs is, in my judgment, wholly unjustified and preposterous. In my experience, every reputable newspaper is aware that copyright subsists in photographs which it publishes by reason of the fact that it is usual to publish an acknowledgement of the source or authorship of the artistic work in question. The fact that the Defendant did not do so in this case is, in my view, a clear indication that the Defendant was disposed to disregard and violate the Plaintiff’s proprietary rights in respect of these six photographs. The similarity between the Plaintiff’s slides (Exhibit P3), the pictures in the Japanese magazine (Exhibit P1) and the pictures in the Defendant’s newspaper (P2) on the day in question is so obvious and striking that the inference of infringement of copyright is, in my view, irresistible, especially in view of the fact that the Defendant is unable or unwilling to show that it obtained the offending pictures from some legitimate source. 9. Being satisfied that the Defendant is guilty of a clear infringement of the Plaintiff’s copyright, I turn now to the more difficult question of the remedies which should be extended to the Plaintiff. In the first place, I do not understand the relief sought by the Plaintiff in his second prayer. He seems to be asking the Court to require the Defendant to make a statement that it will not publish anything which may infringe the Plaintiff’s copyright in the six photographs. Miss Leong disclaimed any intention to seek an injunction. In the correspondence before action the Plaintiff asked the Defendant to give a written undertaking not to infringe his copyright in the photographs. An undertaking of sorts was offered by not in the terms sought by the Plaintiff. I would not be disposed to grant an injunction in this case because I think that further infringement by the Defendant is unlikely, simply because the pictures are no longer considered to be newsworthy. At this stage the Plaintiff is really only concerned to recover damages for the infringement. He claims the liquidated sum of US$9,000, based on US$1,500 per photograph. Having regard to paragraph 7 of the Particulars of Claim I treat his first prayer as a claim for damages to be assessed; but limited to the amount of US $9,000. 10. As indicated earlier the Plaintiff does not seek to recover “additional” or “conversion” damages in this case. Accordingly, I must dismiss from my consideration any sentiments I may entertain regarding the nature or flagrancy of the Defendant’s infringement or the profit they may have gained by reason of the infringement. Various authorities have been cited to me on this aspect of the case. I do not propose to summarise the content or effect of all of them. For the purposes of the present case, I think that the submissions of counsel can be encapsulated by reference to passages in two leading textbooks and the judgments in Stovin – Bradford v. Volpoint Properties Ltd [1971] 1 Ch 1007 and PBI Publications (Hong Kong ) Limited v. Marks Hundred Co. Ltd. (Civ. App No.91 of 1987). I confess that I have found it difficult to extract any clear statements of principle from these sources which can be applied to the facts of the present case. For example at the end of paragraph 12.25 of Laddie on The Modern Law of Copyright it is stated: “Frequently the court will award a lump sum by way of damages without explaining the manner in which that sum was assessed.” That indication of the practice of the courts is, perhaps, reflected in the comment in the final clause of paragraph 643 of Copinger & Skone James on Copyright (1980) that “…generally damages may be said to be at large.” In my view, both expressions can derive support from the outcome of the appeal in Stovin – Bradford v. Volpoint Property Ltd. and the remark of Salmon LJ: “The damages are at large and cannot be precisely measured.” 11. The authorities show that where the owner is in the habit of granting licences for use of his copyright, his normal royalty fee, or a “fair fee”, will be taken as a starting point for the assessment of damages. Where he does not grant licences, or does not market his copyright in the same way as the infringer, the court is left to make a crude assessment of the harm caused by the infringement. The court may assess a reasonable royalty or assess the cost of obtaining a similar work elsewhere. (See Laddie paragraph 12.25.) In the present case, I am satisfied that the Plaintiff would probably have refused to grant a licence to the Defendant, since he has never sold photographs to newspapers in Hong Kong, and because the print quality of newspapers is poor and the exposure (or readership) is different. He normally sells to major magazines. These features make the present case distinguishable from the facts in PBI Publications (Hong Kong) Ltd v. Marks Hundred Co. Ltd (Civ. App. No. 91 of 1987; 25th November 1987), where the court found that the copyright owner would have been reluctant to sell the photograph at the normal commercial fee, but would have done so on payment of a premium. However, on the evidence before me I consider that I should follow the same approach as was adopted by the Court of Appeal, with some modification based on the evidence before me. Indeed, there really is no evidence which would entitle me to adopt any alternative to the “fair fee” basis of assessment. I do not know how much the Plaintiff incurred in expenses for producing the photographs. In paragraph 15 of his witness statement the Plaintiff complains of harm to his reputation. I recognise that there is or may be an element of risk of such loss, but there is no evidence of any actual loss in this case. No one, apart from the Plaintiff, has identified the pictures in Exhibit P2 as being the same as those in Exhibit P1 until these proceedings; and the Defendant did not give him credit for any of the pictures in its newspaper. 12. The Defendant has sought to show that a fair fee for its unauthorised copying would be $500 per photograph. This is based on what it claims to have paid for a photograph (at P47AB) of high waves on the shoreline in Chaiwan in September 1993. I have not seen the original and Mr. Lau was unable to tell me whether it was taken by a professional or amateur photographer. Indeed, I am not persuaded that the $500 was a licence fee paid to the owner of copyright, because the document at PP45-6AB seems to suggest it was a commissioned assignment. But, in my judgment, the photograph in question is not a reasonable comparable for assessing a reasonable fee for use of the Plaintiff’s copyright in the six photographs. The photograph at P47AB may have had news value but it is, in my experience, typical of many which appear in local newspapers every year during the typhoon season. I do not even know if it was a colour or black and white film. Similarly, I do not regard the Defendant’s evidence of subscriptions to various international press agencies or news services as being of any assistance to me in assessing the fair fee for using the Plaintiff’s photographs without his permission. Even Miss Ho conceded that those obtained from the agencies are supplied on an entirely different basis from those obtained from independent self-employed professional photographers. 13. I am really left with the evidence of the Plaintiff and that of Miss Diana Chua from the agency used by the Plaintiff. The Plaintiff put a value of US$200 on each of his photographs. Miss Chua valued them at HK$1,500 per photograph. She seems to have based that figure on her company’s guidelines for transparencies (W8AB), but I must confess that I found this aspect of her evidence rather confusing. But, I find as a fact that for 1994 the minimum the agency would have charged a local newspaper for a client’s photograph would have been HK$1,950. Charges are increased every year; and the minimum for 1993 would have been about HK$1,750. Although the Plaintiff was never asked what he was paid for the package he sold to the Japanese magazine, he did explain the factors which are normally taken into consideration when arriving at a fee for authorised usage. I recognise that the highly subjective value which the artist places on his own artistic work may tend to inflate the “fair fee”; but it cannot wholly be ignored, because reputation and recognition of the author or creator do go to determine the market price, as, I am sure, experienced members of the legal profession will readily acknowledge! Having rejected the evidence adduced on behalf of the Defendant (as I have) on this aspect of the case, I have no difficulty in accepting the value which the Plaintiff places on his works as the starting point for arriving at a reasonable fee for granting a licence. I do not think that he has exaggerated the value of his photographs to a potential legitimate licensee. I am, however, not so confident about the premium which he claims should be paid for unauthorised use of his artistic works. 14. The Plaintiff and Miss Chua both testified that there exists a world-wide practice of billing unauthorised users of photographs 400% of the fee which would have been charged for authorised use. They further testified that this practice is documented in various publications by professional institutes or agencies operating in the major cities of the world. Regrettably, no such documentary material has been placed before me. It was not disclosed in the Plaintiff’s list of documents. It was not disclosed in the pleadings or any of the correspondence placed before me. It is not a matter of which I can take judicial notice. The first indication that the Plaintiff would seek to rely on this practice within the profession and the industry was given in his witness statement dated the 9th July 1994. I do not know when that was filled or given to the Defendant or their solicitors. Regrettably, neither party complied with directions by the court, given in March 1994, that such statements should be exchanged within 42 days. Accordingly, it may be that the Defendant did not have a reasonable opportunity of challenging that evidence. But, no adjournment was sought in order to do so. I doubt whether the “premium” is 400 per cent throughout the world. There is some degree of discrepancy between the Plaintiff and Miss Chua on this aspect. But, I do not think that I can reject the evidence out of hand, because of Miss Chua’s evidence that her agency has obtained payments, at those rates, for unauthorised usage of their clients’ copyright material from other agencies and one airline. 15. Miss Leong invited me to apply these alleged guidelines on the basis of certain passages in the old case of Penn v. Jack (1867) LR 5 Eq. 81 at 87. However, I am not persuaded that the Plaintiff has produced the sort of evidence which the Vice-Chancellor thought necessary to establish a general practice or system of charging infringers more than the usual licence fee. It may be the case that other infringers have paid the 400% premium in order to avoid the inconvenience and greater cost of legal proceedings. But, in the absence of solid and clear evidence that it is an established custom or practice within the industry, I do not think that I should adopt it as a yardstick for assessing damages in this case. In so far as these alleged guidelines are based upon an implied agreement to compensate the copyright owner for his loss, I envisage that the question of a penal sum being held over the infringers would arise. In the field of copyright infringement I venture to suggest that adoption of such scales as the normal measure of damages would lead courts to encroaching upon the area of additional or conversion damages. There is clearly a “punitive” element in the 400% premium. 16. In the present case, I think that I should depart from the 50% premium apparently applied by the Court of Appeal in the PBI case (Civ. App. 91 of 1987). I do have some evidence as to what would have been charged over and above a normal licence fee. I am not persuaded that it is as high as 400%. But being satisfied that the Plaintiff would not have given a licence to the Defendant, the premium for the Defendant’s infringement of his copyright must, in my judgment, be assessed at a rate which is higher than that adopted in the PBI case. Within the parameters I have touched on in the course of this judgment, I consider that I have to ask myself what a jury, property directed, might reasonably award the Plaintiff in this case. On behalf of the Defendant, Miss Tam submitted that it should be no more than 150%. That is based on the PBI case. I have already indicated that the case is distinguishable on the facts and the premium was selected without any basis of specific evidence. In Chabot v. Davies [1936] 3 All E.R. 221 the court considered the scale fees of £52 were inadequate; and assessed damages at £100. 17. In the present case, accepting (as I do) the Plaintiff’s valuation of his work at US$200 per photograph, I consider that the Defendant should pay twice that amount for infringing his copyright in the six photographs. Converted at the rate of 7.80 I arrive at the figure of $18,720. That is the sum I award the Plaintiff in these proceedings. I direct that it should carry interest at the judgment rate from the date of infringement, viz, the 27th February 1993 until the date of judgment.
Miss Susanna K.Y. Leong, Counsel instructed by Messrs. Kwan & Kwan for Plaintiff. Miss Winnie Tam, Counsel instructed by Messrs. Chris H.M. Yuen & Co. for Defendant. | ||||||||||||||