For every copyright cease-and-desist letter, the same question hangs in the air: how high is the claim — and is it justified in amount? The sums demanded often appear arbitrary because the recipient lacks the calculation logic. In fact, damages in copyright law follow a clear scheme with three calculation methods — and each of them has its own attack points for the defence.

Three methods of calculation — the statutory framework

The central provisions are §§ 86 and 87 UrhG. They give the injured party the choice between three methods of calculation:

  • Actual damages — the proven actual financial loss of the rights holder (lost profit, market displacement etc.). Rarely chosen in practice because hard to quantify.
  • Licence analogy — the fee that a reasonable licensee would usually have paid for an orderly use. By far the most common method in cease-and-desist and litigation matters.
  • Infringer’s profit — the profit obtained by the infringer through the breach. Particularly relevant in commercial infringements with a clear causal link between the breach and the profit.

In case of culpable infringement, the injured party can claim twice the appropriate fee — the notorious “double licence fee” in practice.

The licence analogy — the standard case

The licence analogy estimates damages by asking: what would a reasonable user have paid for a comparable licence? Common references are:

  • Photo licences — image fees of the Federal Guild of Professional Photographers, stock-photo tariffs, industry conventions for press photos
  • Music licences — tariffs of collecting societies (austromechana, AKM), sync licence fees
  • Software licences — list prices, comparable licence offers
  • Texts and descriptions — fee schedules for translators/copywriters, publishing customs

Important in practice: the other side often takes the highest conceivable licence values as the basis in cease-and-desist letters — e.g. photographer fee tariffs for the use of an unremarkable stock photo on a small website. Such approaches are routinely contestable.

Double appropriate fee as damages

In culpable infringement, double the licence-analogy value applies. Culpable means: intentional or negligent — though the bar for negligence is low. Anyone who as a business uses images without checking licences is regularly considered (at least slightly) negligent.

In cease-and-desist letters, culpable infringement is often assumed blanket-wise. With the right defence, however, the conditions can be questioned in individual cases — for instance with a plausible assumption that a licence existed, or with very short usage without market effect.

Defence approaches against inflated claims

From our long-standing practice, several adjustment screws emerge:

  • Level of the licence analogy — the tariffs demanded are often set too high; comparable stock-photo licences, industry customs and the specific scope of use can correct the licence analogy significantly downwards
  • Fault question — anyone who successfully contests (or reduces) culpable infringement takes the doubling away from the other side
  • Standing — is the sender actually entitled? With licence-chain constellations (main licensee, sub-licence, collecting society), the rights chain merits a look
  • Scope of use — short usage period, small reach, non-commercial sphere are classic arguments for reduction

The bottom line: anyone who does not accept a claim without review, but defends with the right strategy, in our experience pays significantly less than the initial demand.

What clients can expect

In practice, damages claims can be in most cases significantly reduced — especially with short use, small reach or licence analogies set at the upper end of the range. Guarantees, however, are out of the question — that would be unserious. What we promise: a sound assessment of your position and the right strategy on that basis. And that usually pays off financially for you as well.

Anyone who has received a specific claim will find on our dedicated copyright cease-and-desist landing page the further procedural framework — from free initial information to defence in proceedings. For photo cease-and-desists, also see the upstream article Using images legally safely — it explains how ideally such claims don’t arise in the first place.

This article is for general information and does not constitute legal advice in any specific case.