Damages for Infringement of Image Rights – Fundamentals and Calculation

The use of third-party image material is regularly unlawful and obligates the infringer – in addition to cessation – to pay damages. The calculation thereof is a science in itself and is fraught with certain uncertainties. Below we provide a brief overview of the calculation methods and give examples of typical cases of unauthorised photographic image use.

Compensation for Actual Damage

The injured photographer or entitled licensee may assert the actual damage incurred against the infringer. This is the loss of assets resulting from a comparison of the hypothetical financial position without the infringing act with the actual financial position resulting from the infringement. The calculation of damages is naturally difficult because unauthorised photographic image use does not automatically lead to a loss of assets on the part of the rights holder. This requires special circumstances, which are regularly not present. In any case, the assertion of damages calculated according to this method frequently fails due to lack of corresponding evidence. Such evidence could succeed, for example, if an anticipated licence agreement fails because the affected photographic images appear and the (future) contracting party interested in exclusive rights of use withdraws as a result. In this case, the damage would consist of lost licensing income.

Disgorgement of the Infringer's Profit

Insofar as the infringer of image rights has generated profit through the infringing act, the rights holder may also "disgorge" this. Since the necessary knowledge for this is regularly lacking initially, the injured party has a corresponding right to information, which covers all facts and circumstances necessary for the calculation of the profit and thus the damage. The disadvantage of this calculation method is that the photographic image use often has only indirect economic benefit, because the photographic images are used in the design of offers, brochures, websites and other business documents or are even used privately without any economic benefit whatsoever. In all these cases, it is scarcely possible to demonstrate concrete economic advantage to the image user – even if appropriate information is provided regarding the duration and extent of the image use. The calculation of damages according to this method usually only makes sense if the unauthorised photographic image itself is offered as a product (e.g. reproduction, wall-to-wall photo mural, etc.) and the profit generated is directly and demonstrably based on the infringing act.

Hypothetical Licence Fees (Licence Analogy)

If damage calculation according to the calculation methods presented above is not possible, the injured party can always resort to the so-called licence analogy, which is also alternatively applicable (e.g. if this calculation method results in higher damages). Within the framework of the licence analogy, damages are owed in the form of a hypothetical licence fee, that is to say what the injured party would have had to pay for the use of the photographic images in the event of licensing. The remuneration is based on customary market rates, for which the annual licensing fee recommendations issued by the Mittelstandsgemeinschaft Foto-Marketing (MFM) are regularly used. Insofar as customary remuneration rates are ascertainable, these are to be applied, which may also include the "in-house" licence fees of image agencies and other image rights exploitation entities. Insofar as the photographic image infringement – as is almost always the case – is moreover carried out without naming the author (photographic image creator/photographer), according to settled case law, a surcharge of 100% is to be applied to the calculated (hypothetical) licence fees. For example, for the unauthorised use of product photographs within the framework of an online shop, damages of as much as € 500.00 per photographic image can easily be incurred. The concrete amount of damages depends on the nature and extent of the infringing use.

It should be clarified that within the framework of this calculation method, resort is had merely to a hypothetical licence agreement. This therefore does not mean that by asserting damages calculated according to the licence analogy, a licence agreement actually comes into being and the infringer is henceforth entitled to use the photographic images. The cessation claims triggered by the infringement nonetheless subsist.

Immaterial Damages

Insofar as the compensation of material damages according to one of the three calculation methods is insufficient for full reparation of the damage, the author or photographic image creator may, in certain circumstances, also claim compensation for immaterial damages. A prerequisite is a substantial interference with the moral rights of the author. We will devote a separate contribution to this subject shortly.