How are damages calculated in a copyright infringement case in Japan?

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Winning a copyright infringement action in Japan usually entitles the copyright owner to money damages from the infringing party. The three main types of damages awarded in copyright infringement cases are: damages based on the unlawful profit, damages based on the lost profit and damages based upon a reasonable license fee.  Which type of damages a copyright owner chooses to pursue can have a big impact on the amount of money recovered in successful litigation.

The first type of damages is based on the infringing party’s profit.  The judge might order the infringing party to pay the copyright owner all of the profit that the infringing party received from the unauthorized use.  This type of damage removes all benefits from the infringing party but may not necessarily undue all the damage done to the copyright holder.

The second type of damages is similar to the first but it is based on the amount of profit the copyright owner would have received for every infringing product sold.  This type of damage attempts to directly compensate the copyright owner for the money that he or she would have made.  In some cases it can be larger than damages calculated based upon the infringing party’s profit.

For example, if the infringing party sold 100 fake CDs at a $1 per CD profit, the damages as calculated based on the infringing party’s profit would be $100.  However, if the copyright owner would have made $2 profit per CD, then the damages based upon the copyright owner’s expected profit would be $200 for the same 100 CDs.

The last type of damages calculation is based upon what a reasonable licensing fee would have been.  This calculation can be especially useful if the parties plan to continue in a licensing relationship after the litigation is over.  Depending on whether the parties are able to cooperate and work together over a long period, this type of damages may be the most lucrative of all.

If you have a question regarding what damages are available in a copyright infringement action, please contact our office for a legal consultation.