Compensation Liability for Copyright Infringement

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The author or the owner of a work is entitled to claim compensation in the case of violation of economic and moral rights arising from the ownership of the work protected under Law No. 5846, the Intellectual and Artistic Works (the “LIAW”), in addition to other legal remedies. 

Article 70 of the LIAW regulates compensation that may be claimed based on violation of economic and moral rights, separately. Accordingly, the author whose moral rights have been infringed, is entitled to file a court action for his/her moral damages. Although Article 70/1 creates the impression as if only moral damages may occur when moral rights are infringed, it is accepted by the scholars and in court precedents that if the infringement of moral rights also caused material damages, the author may file a court action based on general terms that are applicable according to Tort Law for the recovery of material damages.

In the case of the infringement of economic rights, the author may claim not only for his/her actual damages, but also for the loss of profit by proving the fault of the infringer, incurred damages, and the casual link therein between. The author may also claim compensation for moral damages, if any, when economic rights are violated.

The LIAW also provides other pecuniary claims which are even more advantageous for the author, where the liability of the infringer is not subject to fault.

According to Article 68 of the LIAW, the author (or the owner) may demand from the infringing party payment in compensation up to three times of the amount that could have been paid by the infringing party if the rights had been granted through a contract where the copyright protected work was reproduced, distributed, or publicised, without the permission of the right holder.

Even though this pecuniary claim is evaluated as a compensation claim, in practice, in fact, it is a one of the mechanisms employed by the LIAW for the cessation of copyright infringement. In other words, the LIAW legalises the infringing act by creating a fictitious contractual relation between the infringing party and the right holder in return for payment made by the infringer. In consequence, for example, reproduced works without the permission of the right holder could continue to be sold as if they were legally reproduced under the contact between the parties. Certainly, this may only be applied if the right holder prefers to apply this remedy. Another important issue while applying this pecuniary claim as to Article 68, is that it does not require the right holder to prove the infringer’s fault; namely, it sets strict liability for the infringer.

On the other hand, as per Article 70/3 of the LIAW, the infringed party may also claim the profits gained by the infringing party due to the infringing activity, in addition to the compensation claims for its material and moral damages. This claim should be defined as an additional pecuniary claim rather than compensation, itself. Doctrinal resources define the legal basis of this claim as “Agency without Authority.” Therefore, the right holder whose rights are violated may seek payment of the profits that arose from the infringing act, in a similar way that a person whose business conducted without his/her authority by a third party would ask for the transfer of the benefits gained through this unauthorized agency. The infringed party is not required to prove the infringer’s fault while asking for the transfer of the profits realized. In addition, the infringed party may demand payment of the profits made by the infringer, even if the act has not caused any harm to the right holder. Similarly, the transfer request of the right holder shall be accepted as it is, even if the amount of profit gained by the infringer is greater than the right holder’s loss, or even if it exceeds the profit, by comparing the right holder’s loss, if it reaches significant amounts. This remedy, which aims to prevent the party who violates the economic and moral rights of the right owner, from profiting, as it is an independent remedy for compensation claims for material and moral damages, and it may also be sought even there is no harm to the copyright holder due to the violating act.

As is clear from the above, the copyright owner holds additional pecuniary claims to its compensation options when economic and moral rights are violated. However, it should be noted that these claims cannot be made all together by the copyright owner. Thus, in a scenario where the right owners base their claims on Articles 68 and 70/3, the Code sets the deduction of the amount that the right owners may demand under Article 68, as if there were a contract for the amount that the right owners may claim, as to Article 70/3 of the Code, as a transfer of the profit gained by the infringer.

Lastly, it should be stated that following the enactment of Law No. 7155 on the Initiation of Enforcement Proceedings Regarding Monetary Claims Arising from Subscription Agreements, mandatory mediation processes have started to be applied in compensation claims and/or any other monetary claims. Accordingly, the right owner must first apply for mediation process prior to initiating a court case.

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