Copyright Compensation in the Finnish Sanctioning System – A Remedy for Ungained Benefit or an Unjustified Punishment?

Abstract

Copyright compensation is a special civil remedy for copyright infringements and the unlawful use of copyright according to Finnish copyright legislation. Its purpose is to ensure compensation to the rightholder in situations where the infringement is evident, but proving the harm or loss is difficult. Copyright compensation aims to prevent the unlawful and infringing use of copyrighted material. This article studies which purposes may be pursued with copyright compensation and which criteria must be fulfilled in this pursuit. The article focuses on studying the level of prevention, which may be pursued with a remedy without it becoming a punishment. The article points out that case law has started to emphasize the preventive function of copyright compensation. Due to this, the remedy (i.e. copyright compensation) has taken on punitive elements, which, according to the Finnish legal system, are prohibited to be given as civil remedies. This jeopardizes foreseeability of the use of law and the protection of the defendant’s legitimate rights. The article suggests that the protection of the legitimate rights of the defendant should be better ensured in imposing copyright compensation, and that strong prevention should be pursued with other measures.

1 Introduction

This article studies copyright compensation as a remedy in the Finnish sanctioning system. The central legislative foundation of the operative Finnish copyright enforcement system, as with other Nordic systems, comes from the Agreement on Trade-Related Aspects of Intellectual Property Rights (the TRIPS Agreement) and the EC Directive 2004/48 on enforcement of intellectual property rights (hereinafter the IPRED1 Directive).¹ Both legal instruments regulate the minimum criteria for effective enforcement measures, which are to be fulfilled on national level.² The Finnish copyright enforcement system consists of several different civil and criminal sanctions,³ and it fulfills the requirements of both the TRIPS Agreement and the IPRED1 Directive.⁴ Copyright compensation⁵ is a special remedy for copyright infringement,⁶ and it corresponds mainly to what is stipulated in Art. 13(1b) IPRED1 Directive.⁷

Copyright compensation as a remedy has often been compared to damages and refund of unjust enrichment,⁸ though it differs from them based on its grounds for determination. Where both damages and refund of unjust enrichment require the existence of a provable harm, loss and/or profit, regarding copyright compensation neither negligence nor causality must be shown, neither does the existence of any kind of consequence of the infringement. The mere existence of an unauthorized act and the recognition of a doer are enough.⁹ In this regard I would characterize copyright compensation to be more of a compensation for a theoretically ungained benefit to the rightholder than a form of damages or refund of unjust enrichment, for any actual loss or profit, or the causality between the act and the consequence need not be shown. Therefore, copyright compensation in Finland is not a form of damages, but a separate remedy that supplements the monetary compensation system of copyright enforcement.¹⁰

Copyright compensation, being a remedy, must be imposed following the rules of civil law.¹¹ However, the existing case law seems to pursue a level of prevention not common to civil remedies, but to criminal punishments. This article focuses on analyzing the limits of prevention of a remedy in the light of protection of the legitimate rights of the defendant. In other words, this article studies the limit between a remedy and a punishment. The grounds for liability being rather simple and designed for the analog world instead of digital world, together with the assumption of the owner of the property being the one who uses it,¹² makes it especially difficult to contradict an act committed in the digital environment, if the act is evidently done through one’s user interface or open Wi-Fi network.¹³ This together with the emphasized pursuit for prevention raises the concern of the adequacy of protection of the legitimate rights of the defendant regarding digital use of copyright protected material.¹⁴

The research question of this article is: which purposes may be pursued with copyright compensation and which criteria must be fulfilled in this pursuit? First, the article will show that the interpretation of the copyright compensation provision has drifted towards executing goals typical of a criminal sanctioning system and procedure, which causes problems from the perspective of foreseeability and the protection of legitimate rights of the defendant. The current interpretation may lead to the perpetrator being punished twice for one act or even being punished for someone else’s crime. Second, it is argued that the current interpretation of the copyright compensation provision may begin to produce for the rightholder unjustified benefits at the expense of the defendant. The principle of full compensation and the principle of non-enrichment define the amount of monetary compensation and apply to determining copyright compensation. The first ensures compensation for all the loss the rightholder suffered unless there are grounds for adjustment. The latter prevents the rightholder from gaining a better financial situation than he was in before the event that triggered the liability.¹⁵

This article studies the research question using the method of legal dogmatics. It concentrates on solving the research question based on theoretical starting points regarding civil and criminal sanctioning systems. The article suggests that the focus should be directed back to executing the purposes of the civil sanctioning system and pursue the wanted goals with other more suitable measures.

This article does not analyze damages or other compensation that are not defined in the Finnish Copyright Act (FCA) Chapter 7 Sec. 57 subsec. 1, for, as Figure (1) below will show, the problems regarding the protection of the legitimate rights of the defendant actualize specifically in applying this section of the law. This section is widely used in sentencing of compensation for unlawful use of copyright, but it can be seen to fall short in ensuring adequate protection of the legitimate rights of all parties. Also, the article does not handle the questions regarding burden of proof or adequate evidence in the procedures per se. The focus of the study will be on the first part of the first sentence of the Finnish copyright compensation provision, for which matters concerning the import of infringing material and private use are not handled in this article. Also, mediation and other forms of alternative dispute resolution (ADR) are not addressed in this article as with contractual forms of compensation, administrative measures and the effects of the situation in the light of the ne bis in idem principle.

The following sections will analyze the problems starting with illustrating the more specific legal framework of the problem and themes outlined in case law in Sect. 2. Section 2 defines the central concepts of civil and criminal law and their relationship to each other in the research context of this article. Section 2 also clarifies the linguistic issues related to the matter. Section 3 analyses the pursuit of prevention by using copyright compensation in current case law in the light of prevention theories and objectives of different forms of procedure. Section 4 discusses the reasonableness of copyright compensation from the perspective of the protection of the legitimate rights of the defendant.

2 Legal Framework of the Research and Central Concepts

2.1 Framework of the Research

The Finnish copyright enforcement system aims to prevent the misuse of protected material and incentivize creativity.¹⁶ As the procedure exists for the execution of substantive law, the pursuit to fulfil the objectives of civil and criminal procedure and their outcome must follow the norms and general principles of civil and criminal law.¹⁷ The goals of the norms cannot be reached unless breaches are sanctioned and remedies realizable.¹⁸ Criminal law is strictly bound by the principle of legality,¹⁹ and criminal procedure mainly executes the state’s power against an individual in the form of a punishment for a situation in which the social peace has been violated. Thus, the need to protect the legitimate rights of an individual is accentuated.²⁰ Civil law and civil procedure mostly target private conflicts between individuals allowing the freedom of contract to be actualized without the interference of the state.²¹

Enforcement must be foreseeable and coherent to allow individuals abide by the legislation. This also maintains legal certainty. Legal rules must be clear and precise. The use of discretion in applying rules must be such that their effects are foreseeable, especially in situations which may cause negative consequences to private parties.²² The right to fair and public trial is secured in Art. 6 of the European Convention on Human Rights (ECHR) and specifically regarding the enforcement of intellectual property rights (IPRs) in Art. 42 of the TRIPS Agreement. Article 6 EHRC guarantees a certain level of protection of legitimate rights of an individual, which varies somewhat between different forms of procedure. The key to fulfilling the requirements of an adequate protection is in the sufficient investigation and determination of matters. In criminal procedure, this is mainly handled by the authorities, whereas in civil procedure, the parties provide the trial materials.²³

Punitive damages are damages that are determined in addition to (and apart from) compensatory damages, but in a civil procedure. The purpose of punitive damages is to punish the wrongdoer and create a deterrence that prevents him/her, and other potential wrongdoers, from (re)engaging in unwanted behavior, i.e. to pursue effects typical to punishments. Traditionally, punitive damages are a common law concept.²⁴ The EU legislator’s position regarding punitive damages is somewhat unclear. There is not any specific regulation for (or against) them, though the Court of Justice of the Euoropean Union (CJEU) has recognized elements of them in its cases. However, the use of punitive damages has been left to be enacted in national legislation.²⁵

In the field of IPRs, the OTK judgment²⁶ of the CJEU confirms that the IPRED1 Directive permits, though does not require,²⁷ imposition of damages or other compensation, which may exceed the amount of actual provable damage.²⁸ Even though the OTK judgment does not specifically comment on whether punitive damages are allowed according to Art. 13(1b) IPRED1 Directive, it does confirm that fixed compensation that is twice the amount of the hypothetical royalty, or amount exceeding the price of legal use, is allowed based on the Directive.²⁹ Then again, the more recent M.I.C.M. judgment³⁰ confirms that an infringer may be sentenced to pay damages corresponding to the actual harm³¹ suffered by the rightholder due to the infringement, providing that the infringer knew or with reasonable grounds should have known an infringement was at hand.³²

Punitive damages are an unfamiliar remedy to Finnish and other Nordic legal systems. The Nordic tort law systems are based on the principle of full compensation which limits the maximum amount of compensation to no more (or less) than what the victim has suffered.³³ In Finland, the principle of non-enrichment operates more as a separate legal principle than in other Nordic countries.³⁴ It prevents both the defendant from gaining a better financial position through the act than without it, and the victim from benefitting from the compensation.³⁵ Therefore, it prohibits the use of civil law remedies that exceed the provable damage, harm, loss or ungained benefit, and anything exceeding them is considered punitive. This includes a predetermined lump-sum compensation similar to the OTK judgment.

As described above, the purpose of copyright compensation is to guarantee compensation for infringement to the rightholder in situations where proving causality between the act and consequence is difficult, but the existence of the infringement is evident.³⁶ The application of the copyright compensation provision in case law has started to emphasize the preventive function of copyright compensation instead of its reparative function.³⁷ This can be illustrated with Fig. 1.

Fig. 1

copyright compensation provision in Finnish case law

The application of the

To be able to pursue similar preventive effects and punitive elements with copyright compensation that is typical to criminal sanctions, the grounds for liability³⁸ and guarantees of protection of the legitimate rights of the defendant must also be those of criminal law. Criminal liability cannot be based merely on the act fulfilling the essential elements of a crime.³⁹ It requires the possibility to direct a certain level of societal reproach towards the defendant in the form of a punishment. This demands the existence of guilt and the possibility to behave differently.⁴⁰ Primarily, every punishment must be a part of the criminal law sanctioning system and fulfill the requirements set both for targeting criminal liability and for criminalizing behavior.⁴¹ Therefore, if a remedy in reality is given punitive elements⁴² and becomes a punishment without evidentially fulfilling the grounds for criminal liability, it violates the operative legislation and core principles of our judicial system.⁴³

The Supreme Court of Finland (Korkein oikeus, hereinafter “KKO”) has outlined the principles of the imposition of copyright compensation and the amount of it in various cases. To show, how the emphasis of the preventive function exceeding the central goals of remedies is perceivable in the case law, the outlines must be analyzed further. For this purpose, the outlines can be categorized under the two following themes:

These two outline themes are analyzed in Sects. 3 and 4 with cases KKO 2010:47 and KKO 2007:63. These example cases show the difficulties of drawing a line between remedies and punishments in this context. Both example cases are criminal cases, in which the perpetrators were also adjudicated to a remedy on the side of a punishment.⁴⁴ The case KKO 2010:47 concerned the maintaining of an illegal file distributing system on the internet and enabling illegal downloading of copyright-protected material. The perpetrators were convicted to a punishment for copyright misdemeanor according to the Copyright Act (CopA) Art. 56a(1). The case KKO 2007:63 concerned the selling of forged paintings signed with name of the original artist. The defendants were not aware at the moment of sales that the paintings were forgeries. The case concerned whether the acts of the defendants were of such character that they would be obliged to pay compensation to the rightholders according to CopA Art. 57(1).

2.2 Central Concepts

This research examines the interface of two very different fields of law,⁴⁵ for which it is important to recognize the different nuances of similar legal concepts of those fields and separate the concepts from each other.⁴⁶ The first pair of concepts is the principle of equity (civil) and the principle of proportionality (criminal). The principle of equity⁴⁷ depicts general equity required from contracts and indemnification liability. The principle emphasizes actual equality between parties, and it endeavors to correct the parties’ intellectual and economic imbalances without interfering with the freedom of commerce.⁴⁸ The principle of proportionality, which is defined in Chapter 6 Sec. 4 of the Finnish Criminal Code (FCC), requires the punishment to be in just proportion to the harmfulness and dangerousness of the act, the motives for the act, and other culpability of the offender.⁴⁹ The central difference is that the principle of equity defines the situation solely from the perspective of an individual whereas the principle of proportionality must proportional to the act and also to the harm caused to society.⁵⁰

Second, it is important to separate the concepts of (civil) remedy and (criminal) punishment from each other. A remedy in the context of this research means monetary compensation. Generally, the justification of a remedy is based on correcting the erroneous legal state between parties and it does not include an element of reproach as such. Intent and negligence being the main grounds for liability for remedies⁵¹ indicate societally reprehensible behavior and do express the existence of prevention.⁵² However, other principles regarding the imposition of a remedy such as the principle of full compensation and the principle of non-enrichment define limits in its pursuit.⁵³ Therefore, the main purpose of a remedy is reparation and not prevention, and prevention exists merely as it does regarding any legal or illegal act: acts have consequences, and if you do not wish to suffer them, do not commit the act. A stricter emphasis on prevention in imposing monetary compensation would lead to exceeding full compensation and therefore the rightholder gaining monetary advantage, which would be against our current legal system.

A punishment means causing a negative experience or suffering on the part of the perpetrator together with a limitation of civil rights as a consequence of breaking the law, and it always includes a societal reproach targeted towards the perpetrator.⁵⁴ Punishment and imputation of blame are justified only if the perpetrator has had the possibility to act differently.⁵⁵

The distinction between a remedy and a punishment is found in societal reproach. A remedy aims to stop the norm-breaking behavior and/or rectify the legal state. In addition to these elements a punishment includes societal reproach in the form of a negative experience, suffering and limitation of civil rights. Even though societal reproach could be seen to be included in every sanction merely because society has enacted behavioral norms, all norm-breaking behavior is not sanctioned with such an unpleasant and negative consequence which comprises punishment from a societal perspective. Based on this, I argue that the criminal law reproach and civil law reproach are not similar in content and for this reason they will not be equated to each other. Further, it is in fact the element of reproach that forms the line between a punishment and a remedy.

The bona fides principle is about the absence of knowledge. It includes both the element of a party having relevant information and with reasonable effort trying to find out relevant information. The principle also acknowledges a party’s personal resources to obtain and perceive such information. The starting point is that everyone bears the harmful consequences of an accident themself unless there are some specific legal grounds for receiving compensation from someone else. Therefore, pure accidents and behavior in bona fides are mainly non-sanctionable, ergo bona fides is protected.⁵⁶ Copyright compensation is an abnormality because it includes a form of action conducted in pure ignorance of its illegality, or that an action is even happening at all. Normally negligence is required and therefore, bona fides protected, but in copyright compensation the mere happening of certain actions is enough for conviction. So, negligence is not investigated and is not a ground for liability. This creates problems which are analyzed further in the following Sections.⁵⁷

3 Pursuing Prevention

3.1 Different Objectives for Different Forms of Procedure: What to Pursue with Respect to Copyright Compensation?

As described in Fig. 2, case law has defined a level of prevention uncommon to a remedy as a goal to be pursued with copyright compensation. To analyze, whether the permissible limits of prevention for remedies and civil procedure in general are exceeded, one must briefly discuss where these limits come from. The objectives of procedure depict what may be pursued with a certain form of procedure;⁵⁸ whereas penal theories explain the effects and justification of punishments (including prevention).⁵⁹ Even if the theoretical objectives of procedure could not be seen to have use as such in applying the law,⁶⁰ I would argue that they limit the goals and operations, which can be pursued with certain form of procedure in the first place and illustrate why a certain form of procedure exists.⁶¹ Therefore, for further analysis of the permissible limits of prevention regarding remedies, it is necessary to briefly discuss these matters.

Fig. 2

copyright compensation in the KKO’s case law

Categories and themes in imposing

Primarily, the purpose of civil procedure is to provide legal protection to the private law interests of individuals. Through civil process the state protects the execution of a party’s subjective right. Providing legal protection is more about enforcing one’s legal right to, e.g. property or some other interest than protecting the legitimate rights of an individual during the process.⁶² I would, though, argue that the responsibility to protect the legitimate rights of the defendant exists in civil procedure as well, due to the right to a fair and public trial, even though its position is not as accentuated as in criminal procedure.

Civil procedure also aims to restore the public peace by solving the conflict between individuals and maintaining legal security. The aim is to solve disputes with minimum inconvenience and maximum efficiency.⁶³ Civil procedure directs people’s behavior through the existence of remedies by increasing moral obligations of people to follow the law. It aims to prevent conflicts rather than merely concentrate on solving them.⁶⁴ The prerequisite for this is that the procedure is efficient, just and prompt, which can be seen to increase people’s trust to the certainty of a sanction. The aim to direct people’s behavior can be pursued with the functionality of the procedure as a whole, not merely with the severity of the result.⁶⁵

The key objectives of criminal procedure are to execute criminal liability and promote justice in society.⁶⁶ The execution of criminal liability consists of ensuring the efficiency of procedure, solving the material truth, and applying the provisions of criminal legislation properly.⁶⁷ The procedure directs people’s behavior through deterrence⁶⁸ and/or creating and strengthening morality.⁶⁹ Criminal procedure must fulfil the requirements of international human rights conventions and protect the legitimate rights of an individual.⁷⁰ Particularly important is to ensure that innocent people are not targeted with coercive measures or criminal charges and are under no circumstances convicted for punishment.⁷¹ The objective of executing criminal liability is not fulfilled properly by just punishing someone but the punishment must encounter the actual perpetrator. Under uncertain circumstances, protecting the legitimate rights of an individual must be prioritized (the principle of the protection of the innocent).⁷² Criminal procedure provides legal protection on account of the committed crime⁷³ and resolves conflicts that are caused by the crime.⁷⁴

Considering Figs. 1 and 2 presented in Sect. 2 and the framing of the research question, the key objectives to consider are securing the legitimate rights of the defendant and directing people’s behavior. Protecting the legitimate rights of the defendant sets requirements for the content of the judgment, and fulfilling those requirements helps to legitimize the outcome. It is not enough that the judgment is formally lawful, but it must also fulfil the requirements of human rights conventions. Procedure binds jurisdiction to fulfilling the guarantees of this protection.⁷⁵ Understandably, the need to secure the legitimate rights of the defendant is more accentuated in criminal than in civil procedure. Criminal procedure potentially targets the state’s power towards an individual due to the norm-breaking behavior, while civil procedure mostly corrects an error between the relationship of two individuals. However, in imposing copyright compensation, it seems that rendering a criminal judgment is attempted without ensuring an adequate criminal investigation in a situation.⁷⁶

Similarly, the objective of directing people’s behavior is not the same in content in civil and criminal procedure, because of the different protected interests. Civil procedure protects the interests of private parties, whereas criminal procedure concentrates on securing societal order and societal interests. The interest of private parties can never be protected with similar measures as societal interests, for it would lead to a situation in which a private party’s interest would be positioned higher or as more important than that of another and society would thus not treat its members equally.

3.2 Acceptable Limits of Prevention Regarding Copyright Compensation

Prevention and deterrence belong more strongly to the field of criminal law; whereas, in the field of civil law, as explained above, the procedure and remedies “only” direct people’s behavior.⁷⁷ These concepts can be specified through justification of the use of punishments which derives from penal theories. These theories define the situations and conditions in which the use of punishment is permissible,⁷⁸ and are divided into retribution theories and prevention theories.⁷⁹

Traditionally, retribution theories justify the use of punishment with past events and exigency of justice. The use of punishment is legitimized because the perpetrator deserves such based on his illegal act. The punishment serves as a just expiation of the crime.⁸⁰ Retribution theories also have a future-oriented dimension, which legitimizes the punishment through repentance, reform and reconciliation that arise in a perpetrator as a result of a communicative process of imposing a penitential burden on him. A punishment is seen as an indication of societal disapprobation towards the perpetrator’s conduct. The purpose of the punishment and the disapprobation included in it is to make the perpetrator face his action, understand its unlawfulness and consequences, and repent of it.⁸¹ Reform is a part of repentance, for to be able to repent his action, the perpetrator must recognize the wrong included in it and the need to avoid such behavior in the future. The idea is to make the perpetrator (through societal disapprobation) perceive the existing need of self-reform and to answer this need by changing his thinking, attitudes and behavior. Reconciliation is included in the punishment and society sees it to be fulfilled after the perpetrator has completed the penalty to which he was sentenced.⁸²

Prevention theories, which can be divided into general prevention and special prevention, are forward-looking and emphasize the societal benefits achieved with a punishment.⁸³ General prevention reflects the general societal impact of a punishment, that is, the effect of it on people other than the perpetrator, whereas special prevention is the effect of the punishment on the perpetrator’s future behavior.⁸⁴

General prevention⁸⁵ consists of deterrence of the punishment and the threat of it, the impact of the sanctioning system that creates, strengthens and sustains morality, and the formation of habit.⁸⁶ Traditionally, deterrence is seen to force the potential perpetrator to behave differently in a situation, preventing him from committing a crime. For deterrence to realize this goal, the threat of a penalty must be large enough to force a person in a situation of choice to waive a crime. In addition to deterrence, the purpose of the threat of penalty is to signal to the members of society that crime does not pay and to get them to voluntarily adopt behavioral models that do not violate the norms, that is, affect morality.⁸⁷ These two aims of the threat of penalty are not exclusionary, for understanding that crime does not pay, does not mean that the person in question still could not refrain from committing a crime merely due to deterrence and vice versa.⁸⁸ The formation of habit comes from the presumption of people constantly choosing similar behavior in similar situations. Constant similar choices form a habit and people start to behave following automatically the same pattern. Therefore, a norm-following behavior chosen due to deterrence or morality can transform into a habit.⁸⁹

Based on the “Pursuing Prevention” section in Fig. 2 and both example cases KKO 2007:63 and KKO 2010:47, the KKO points out that the purpose of copyright compensation is to effectively prevent infringements of copyright and the unlawful use of protected material.⁹⁰ However, the KKO does not specify the measures with which this goal may be pursued. The same goal is consistently repeated in the KKO’s case law. The reason for this repetition remains somewhat unclear, for the KKO does not directly base the amount of imposed copyright compensation on it. One begins to ponder, whether the purpose of repeating the goal is to attempt to direct people’s behavior and increase prevention in an atypical way. If so, one continues to ponder whether this attempt stays within the limits of and utilizes measures acceptable to civil procedure and remedies. In the light of what has been stated above regarding the norms and principles of civil law, I would argue that this goal should not affect the amount of copyright compensation, for it seems that the evaluation of the amount of it is in fact based on similar grounds of which the principle of proportionality consists.⁹¹ If the purpose of repeating the goal is not to affect the amount of compensation, it is not clear what the KKO is pursuing with repeating the same goal over and over again in its case law. Unfortunately, the reasons for using these grounds are not given very comprehensively in the rulings, for which it is not possible to confirm the purposes of any of the above.

It should also be pointed out here that deterrence, i.e. adopting behavioral patterns that do not break the norms and formation of habit, requires that one actually recognizes (or ought to have recognized) a situation of choice and/or the possibility of breaking the norms being at hand, and that there is an actual risk of being caught during the norm-breaking behavior.⁹² Deterrence cannot be achieved, if the perpetrator does not know that there is a sanction to be feared. Formation of habit requires a choice, which cannot be made if one does not know that there is a situation of choice at hand. Also, unknowingly “choosing” certain behavior can hardly be considered voluntary, for voluntariness includes an informed choice.⁹³ Therefore, an unknowingly performed act cannot lead to adaptation of norm-following behavioral patterns. Thus, I would argue that the benefits of these three elements cannot be reached amongst completely ignorant doers.⁹⁴ Therefore, the pursuit of these elements by using a form of liability that does not require any awareness or recognition (that is negligence) of the existence of an unlawful act, in this case copyright compensation, seems useless.⁹⁵

Special prevention means the effect of a punishment on the individual perpetrator in a way that he would refrain from norm-breaking behavior in the future and as a result be integrated back into the norm-following society.⁹⁶ This effect cannot be realized if the doer is ignorant of his norm-breaking behavior in the first place and therefore unable to recognize similar situations in the future.

3.3 Severity and Certainty of a Sanction as Tools for Prevention

Prevention and deterrence are dependent on the severity and certainty of a sanction.⁹⁷ Severity and certainty of a sanction are concepts that are mostly relevant regarding criminal sanctions; however, certainty of a sanction can be also valid to elaborate the situation in the field of civil law also. The more severe and certain the potential perpetrators consider the sanctions to be, the higher the deterrence. The severity of a sanction relates to the enacted limits of the punishment for a specific criminal act and the previous sentencing practice of equivalent acts. The certainty of a sanction relates to the effectivity of the procedure and the risk of being caught. The certainty of a sanction is the primary factor in achieving the preventive effect, because if the perpetrator considers it to be certain that there is absolutely no risk of being caught and convicted, no amount of severity of a sanction would be enough to make the perpetrator refrain from action.⁹⁸

As stated above, the objective of civil procedure in directing people’s behavior can be considered to operate through certainty of a sanction, whereas regarding monetary remedies, such as copyright compensation, the severity of a sanction is tied to the proved monetary loss or harm caused to the rightholder by the defendant’s act. A monetary remedy must have a provable and concrete quantitative basis in a form of loss or harm, and it cannot be determined based on the nature of an act.⁹⁹ Otherwise, such remedy will violate the law in force and the principles of full compensation and non-enrichment. Therefore, the severity of a sanction cannot be used to create deterrence in a similar way as in the field of criminal law without the remedy becoming a punishment.

I would argue that concerning civil procedure and remedy, prevention (or guidance of behavior) is based on people perceiving the process to be effective and believing that certain consequences follow certain actions,¹⁰⁰ rather than on the severity of an individual remedy. The function of monetary remedies¹⁰¹ is, as a rule, to rectify and repair the disparity in a specific legal relationship between certain individuals. Another aim would lead to an unjust benefit at the other party’s expense and develop into unfamiliar consequences such as punitive damages. This would rather erode the credibility of the legal system than sustains it. Therefore, it is against the principles of our judicial system to pursue prevention merely through the severity of a remedy.¹⁰²

As has been shown, the case law defines the purpose of copyright compensation to be, on the one hand, to prevent the defendant from gaining a better financial position by utilizing illegally obtained material than he would have been in had he obtained the same material legally. On the other hand, the purpose of copyright compensation is to prevent infringements of copyright and the unlawful use of protected material with considerable monetary remedy.¹⁰³ This raises two questions: first, is it acceptable for the rightholder to gain a better financial position based on the defendant’s actions than he would have gained had the defendant obtained the material legally? This is where the situation potentially leads, e.g. because copyright compensation is paid to the rightholder instead of society, and the evaluation of the amount is based, among other things, on the scope of the act. Second, can this type of prevention through a considerable sanction be targeted to actors in bona fides in the light of foreseeability and the protection of the legitimate rights of the defendant?

Further, if the amount of copyright compensation exceeds that which can be shown based on harm, damage, loss or otherwise ungained profit, the excessive part can be seen to indicate societal reproach, and the remedy becomes a punishment.¹⁰⁴ The imposition of punishments, regarding the procedure and the magnitude, must follow the rules of criminal law. The situation appears to be the same if the amount of compensation stays within acceptable limits, but the purposes pursued with the remedy are in fact those of a punishment, for it seems that copyright compensation may be used to pursue the goals of a punishment without systematically investigating and evaluating the fulfilment of the grounds for criminal liability and, therefore, without ensuring adequate protection of the legitimate rights of the defendant.

If one pursues prevention through the severity of copyright compensation, the imposition of which does not require verifying the imputability of the act, one ends up with arbitrariness rather than a just and credible sanctioning system. The idea of prevention is that a person has the possibility to refrain from committing the act. In the imposition of copyright compensation, negligence is neither investigated nor evaluated. This raises the question of how can a person who does not know (or even ought to know) he is committing an unlawful act should refrain from it. Further, how is the preventive effect achieved if the person, without knowledge, may commit an unlawful act in the future and still not be able to refrain from it due to that (excusable, if investigated) ignorance. It is understandable why the pursuance of stronger preventive effect with copyright compensation is intriguing due to the rather easily fulfillable grounds for liability enacted for it. However, I would argue that it is not the correct means to try to direct people’s behavior, for it does not protect the legitimate rights of the defendant adequately and its effectiveness in achieving this goal can be questioned.

The position of copyright compensation as a tool to pursue prevention concerning copyright infringements is argued based on very old preliminary works of copyright legislation¹⁰⁵ without giving any specific grounds for those preliminary works still being valid with respect to today’s digitalized environment. Regarding these arguments, one can question how well the preparatory committees in the 1950s and 1960s were actually able to anticipate the future digital development and pre-evaluate the impact of this development in the field of copyright. I would argue that they could not. Therefore, I would also argue that they could not have assessed properly, whether the protection of bona fides should be evaluated differently in the digital environment than in the analog. It has been argued that regarding illegal downloading of music, the downloader always knows that downloading music from the internet is an infringement.¹⁰⁶ However, this presumption does not take into consideration situations in which the downloader does not know or even ought to have known that he, or actually his device with an internet connection, is downloading (or distributing) something.¹⁰⁷ In a digital environment, an unskillful user may undeniably without knowing it manufacture a copy of a work and communicate it to the public; whereas, in the analog environment, making a copy always requires an actual act of copying and a concrete contribution to perform it.¹⁰⁸ What should be considered is, what is pursued with a copyright compensation provision and at whose expense, instead of continuing to follow the rather outdated existing system, which does not fit very well into the modern digital environment. In addition to this, it should be re-evaluated whom these substantial remedies in the end target, and do they have effect on those defendants who are actually the most significant problem in the industry. There is a danger of the effect impacting those actors who are generally law-abiding citizens and who commit such unlawful acts by excusable mistake, or people who are merely ignorant of the activity being done through their user interface. There are no grounds why the interests of the rightholder should be emphasized on the expense of the protection of the legitimate rights of the (ignorant) defendant, which is where the current interpretation of copyright compensation provision leads.

4 Reasonableness of the Amount of Copyright Compensation

4.1 Case Law Starting Points for Defining the Reasonable Amount of Copyright Compensation

This chapter analyses more specifically the reasonableness evaluation in determining the amount of copyright compensation as depicted in Fig. 2. The reasonableness of copyright compensation links to the pursuit of prevention analyzed above, for the amount equals the severity of a sanction.

In the example case KKO 2010:47, the KKO outlined the price of legal use (that is the normal license fee), or some equitable amount of money by which the rightholder would have given the permission to use the copyright protected material, as a starting point in defining the amount of copyright compensation. The KKO specified the outline regarding the special features of the case. The Court stated that a regular license fee cannot in every situation be set as the basis for copyright compensation if the infringing use deviates significantly from the use that would have been the purpose of the license. Hence, case-specific special features must be taken into consideration. In this case, the special features to be noted include the purpose of the illegal use as well as the manner of execution and the harmfulness of the infringement.¹⁰⁹ The KKO also outlines that the starting point of copyright compensation should be the pricing of that form of distribution which most closely corresponds to the infringing action, reduced by VAT and other fees¹¹⁰ that do not belong to it due to them being paid to someone other than the rightholder.¹¹¹

I agree with the KKO that the price of legal use is a fair starting point in defining the amount of copyright compensation.¹¹² I also agree that case-specific special features should be taken into consideration, and that copyright compensation should not contain additional costs. However, the special features the KKO defines as the basis for the evaluation of reasonableness are somewhat questionable. In case law, the special features seem to follow guidelines that are more typical to criminal cases than civil ones, while the definition and evaluation of them¹¹³ should follow the evaluation of the principle of equity (as well as the general principles of tort law). The statement regarding VAT and other fees not belonging to copyright compensation because they are not paid to the rightholder in relation to legal use, depicts that the purpose of copyright compensation is indeed to afford some reimbursement to the rightholder for the infringement and not to punish the defendant.

The purpose of copyright compensation as reimbursement to the rightholder has already been outlined in earlier case law. In the example case KKO 2007:63, the KKO states that even though copyright compensation is not a form of damages¹¹⁴ and the amount of it is not reliant on the harm or damage caused with the act, copyright compensation attempts to reinstate the rightholder to the position where he would have been had the infringement not been committed. On the other hand, copyright compensation also includes the idea that the defendant must not achieve a better (financial) position through the unlawful act than he would without it.¹¹⁵ This statement, on the one hand, defines the limit between damages and copyright compensation and, on the other hand, equates copyright compensation to damages (and further as a part of the monetary compensation system) on a principled level. From the perspective of this research, this verifies copyright compensation as a part of a civil monetary sanctioning system and that the general principles of civil law, and more specifically tort law, apply and must be followed also in the imposition of copyright compensation.

The government’s bills as preliminary works of the FCA have interpreted it to be possible to impose a copyright compensation that exceeds the price of legal use. This interpretation has been justified with the goal of advancing creativity and the fact that if the amount of compensation was automatically set to correspond to the price of legal use, the user of the protected material, who knows that he will always get away with the price of legal use, would not have any reason to apply for a license or any other ways to acquire permission to use it.¹¹⁶ Exceeding the price of legal use would without doubt increase the preventive effect of the remedy. However, I would argue that the idea of copyright compensation being given this type of overcompensatory features violates the central civil law principles presented in this study, and therefore is not justifiable.

The principle of equity is written into the copyright compensation provision, for which a separate adjustment of the compensation is neither possible¹¹⁷ nor necessary. I would though argue that the evaluation of equity in copyright compensation should be undertaken using the same requirements as regarding the general principle of equity, even though the provisional basis differs between these two situations. The tort law provision of equity depicting similar basic principles than the general equity clause¹¹⁸ supports this argument. Thereby, the actual content of equity appears to be the same in all situations. Even though equity is evaluated in every situation based on different case-specific elements, the result must always be equitable to both parties. In any case, the evaluation should not be undertaken using the requirements of the principle of proportionality, as it in some instances seems to be the case.

There has been discussion regarding the automatic evaluation of equity in copyright compensation without any special reasons and why it is possible, also regarding intentional and negligent acts. The discussion has extended to the justification of two different adjusting systems concerning the same infringement.¹¹⁹ I would approach the matter slightly differently and would say that this can be justified through protecting the legitimate rights of the defendant. In imposing copyright compensation, the guarantees of protecting the legitimate rights of the defendant (e.g. bona fides, negligence or guilt) are neither evaluated nor investigated. In order for the consequence (copyright compensation) to be just, it must be reasonable directly, when it is imposed, that is it must be reasonable as such and should not need any additional measures, etc. to guarantee its reasonableness. Also, the existence of negligence or intent, even if investigated or proved, should not affect the imposition of copyright compensation, for it was enacted as a ground for liability. Therefore, regarding proved intent or negligence, I would not necessarily say that there are two separate evaluations of equity, but the evaluation of it in imposing copyright compensation and damages actually supplement each other. Copyright compensation and damages, though separate remedies, should be seen as a part of one unified sanctioning system. Copyright compensation guarantees a minimum compensation for ungained benefit, whereas damages supplement compensation for the part of provable damage. The fairness of sanctions in addition to the principle of full compensation and the principle of non-enrichment require that monetary sanctions are not overlapping but adjoining.

One noteworthy aspect regarding the equity of copyright compensation is the position of intent and negligence in the situation. Both the general adjustment provision and the tort law adjustment provision suggest that the grounds for adjustment would be stricter (though still possible) regarding intentional acts. However, regarding copyright compensation, intent and negligence are not investigated. This raises the question: can they be used to intensify the remedy? I would argue they cannot, due to the protection of legitimate rights of the defendant, equality and acceptable limits of civil law prevention. First, intent and negligence are not necessarily substantiated in court, because they are not grounds for liability for copyright compensation. Therefore, the effect of them in imposing copyright compensation becomes random and unforeseeable. Second, the defendants, who are targeted also with criminal investigation end up in an unequal position regarding imposing copyright compensation compared to other defendants, who are only targeted with civil suits. In criminal cases, intent and negligence are always investigated. If they are allowed to also affect the amount of copyright compensation, similar situations merely from the perspective of the remedy might be treated differently. The defendant would be sentenced to a larger amount of copyright compensation based on intent in the criminal procedure, because in civil procedure intent is neither investigated nor substantiated, and therefore cannot affect the amount of compensation. Lastly, based on the existing case law, the concern of the amount of copyright compensation being used to pursue something outside the acceptable limits of civil law prevention, when imposed with respect to a crime, is justified. Even if the pursuit of prevention could be justified regarding the crime, it cannot be justified in purely civil cases and, therefore, cannot be pursued in copyright compensation.

To take a step back, a monetary remedy must have some justifiable quantitative basis. It cannot be sentenced arbitrarily, but it must either correspond to an amount agreed in advance or be proportional to the harm caused to the rightholder. The justifiable amount must be shown, and the definition of this amount must follow the general principles of civil law.¹²⁰ The purpose of monetary remedies naturally follows the objectives of civil procedure analyzed in Sect. 3, which is (in addition to other objectives) to pursue a correction in a disturbance to the legal order. The justification for this comes from correcting the consequences of an unlawful act, which result verifiably from the intentional or negligent behavior of the defendant. This means, that a link between a consequence and the wrongdoing must be shown (causality), as must the defendant’s negligent behavior which resulted in the unlawful act and its consequences (negligence).¹²¹ Copyright compensation does not quite fit in this traditional illustration of monetary civil remedy, especially concerning causality and negligence being the grounds for liability. However, this does not exclude the applicability of general principles in the field, because copyright compensation is indeed a monetary remedy.

Copyright compensation has sometimes been equated to a refund of unjust enrichment.¹²² A refund of unjust enrichment does not require negligence or any unlawful act, but is based on correcting an error that appears in the form of a false transfer of property. Conditions for this form of monetary compensation to occur are the formation of benefit, groundlessness of the benefit, and profiting at the expense of someone else, that is, the causality between the gained benefit and the loss.¹²³ However, I do not consider them to be of a corresponding nature. The purpose of copyright compensation is, indeed, to compensate for ungained profit that is in some situations also someone else’s benefit. A compensation corresponding to the price of legal use (minus additional costs¹²⁴) could be justified through the refund of unjust enrichment, because the defendant has gotten the piece of work to use (benefit) without paying the valid price for it (groundlessness of the benefit), and the rightholder can be seen to have lost this valid price (causality). However, if the unlawful act is undertaken by digitally distributing copyright protected material, the defendant hardly gets any measurable benefit from the distribution.¹²⁵ In these situations, the compensation is based only on theoretical loss to the rightholder, without any burden of proof of the benefit, the groundlessness of the benefit, or the causality between the benefit and the loss. In addition to this type of act, I would argue that the lack of burden of proof in copyright compensation regarding gained benefit, loss or any kind of causality rules out the option of copyright compensation being a form of refund for unjust enrichment. Therefore, I would characterize it to be more of a compensation for an ungained benefit.

It has been argued that the principle of full compensation is not applicable regarding copyright compensation because the amount of loss or damage does not have to be proved, and therefore the rules of tort law do not apply.¹²⁶ I do not consider the situation to be that simple, because copyright compensation has been equated to damages on levels of principles and objectives by the KKO.¹²⁷ Also, the principle of full compensation together with the principle of non-enrichment as general compensation law principles have had effect regarding other forms of monetary compensation than damages, e.g. the refund of unjust enrichment. This supports the argument that due to the consistency of the sanctioning system, they should also have effect regarding copyright compensation. I would even argue that these two principles, together with the principle of equity, actually define the maximum amount of copyright compensation, which must not be exceeded. Full compensation would be the amount that corresponds to the price of legal use (minus additional costs) the rightholder would have recieved had the material been acquired legally as the KKO has outlined.¹²⁸ The starting point is that the rightholder is entitled to compensation of the entire purchase price he lost (the principle of full compensation) unless there are reasons to adjust this amount (the principle of equity).¹²⁹ However, this does not justify compensation that exceeds the price of lawful purchase, which would be overcompensation. Overcompensation is also against the principle of non-enrichment, because the rightholder would achieve a better financial situation with it than he would have achieved had the right to use the piece of work been acquired legally. This leads to the rightholder profiting at the expense of the defendant. As I have argued before, when monetary compensation exceeds the amount of loss or damage caused through the action or the amount that is otherwise considered reasonable and justified, it becomes a punishment. When a remedy becomes a punishment, the grounds for liability regarding imposing it must fulfil the criteria for imposing punishments. Therefore, I would also argue that, e.g. sentencing the defendant to pay copyright compensation that exceeds full compensation can never be equitable from the perspective of the defendant and should instead be considered as a punishment. Even if we do not consider the limits set by the principle of non-enrichment, to force someone to overcompensate the loss or harm he has caused can never be considered reasonable or just. Even less, when considered that for copyright compensation there need not be any certainty of a caused harm or loss to begin with.

4.2 Substantial and Reasonable?

The KKO has on multiple  occasions argued that the effectivity of the remedy itself and the sanctioning system as a whole requires the amount of copyright compensation to be substantial.¹³⁰ This argument can be interpreted to mean different things. First, it can be seen to indicate that the amount of copyright compensation should be something more than the price of legal use, that is, overcompensatory. Overcompensation is not acceptable regarding remedies; hence a substantial compensation becomes a punishment. Second, the argument can be understood to suggest that copyright compensation, though staying within the acceptable limits regarding full compensation, forms to be a substantial payment from the perspective of the defendant’s personal situation. Copyright compensation must be equitable; hence it becomes a punishment.

The substantiality of the amount of copyright compensation is often grounded with the scope of the act¹³¹ or even the intent of the defendant.¹³² These grounds are acceptable as they are, however, they are not enacted as grounds for liability regarding copyright compensation. They seem to follow the requirements of the principle of proportionality, which could be interpreted as an attempt to give copyright compensation a punitive element and to pursue stricter prevention with it than is acceptable for remedies. However, the KKO does not specify the purposes that are pursued with these arguments, thus they can only be speculated.

The same grounds have been in use in the evaluation of reasonableness of the amount of copyright compensation. This evaluation should not apportion the amount of copyright compensation to the purpose and scope of the illicit use, and the nature and harmfulness of the infringement as has been done in many cases,¹³³ because these features still are those of the principle of proportionality (missing basically only the guilt of the defendant), instead of the key elements of the principle of equity. This leads to the reasonableness of the copyright compensation not being evaluated based on the personal situation of both the defendant and the rightholder, and the special features of their relationship, as should be the case according to civil law principles. Even though this evaluation must often be undertaken in relation to the crime at hand, the KKO should not use the crime as a basis to intensify the remedy. The perpetrator already reconciles the crime by serving a punishment. Using these features again in the evaluation of the amount of copyright compensation, with the attempt to impose a remedy of a substantial amount, raises the question of whether the nature of this form of compensation in fact changes from remedy to punishment and whether the perpetrator, due to this change, is actually punished twice for the same act. If this turns out to be the situation, it is very difficult to find a justification for it.

In addition to the problems stated above in Sect. 3 regarding the protection of legitimate rights of the defendant, equality and acceptable limits of civil law prevention, sentencing a substantial remedy instead of an equitable remedy and the remedy thereinafter becoming a punishment, create significant conflicts with central rules of criminal law. Both interpretations above may lead to the defendant being punished twice for the same act, i.e. that copyright compensation becomes the second punishment. If we extend the analysis further to the digital environment, the lack of investigation regarding the grounds for criminal liability may in fact lead to the defendant being punished for someone else’s crime. As stated above, copyright compensation has been created for situations where the unlawful act itself is evident, but proving causality and actual loss or harm or disputing the presumption of a doer is difficult. In criminal law it is not possible to convict based on assumption, rather there must be undeniable evidence of all elements of the crime. Copyright compensation becoming a punishment moves it from the field of civil law to the field of criminal law activating the grounds for criminal liability as the grounds for its imposition as depicted in Fig. 1.

In addition to the requirement of substantiality, copyright compensation is outlined as being defined based on the price of legal use of the copyright protected material. It seems that these two aims are somewhat in conflict with each other and that the KKO pursues something that should not be pursued with the “method” in use, that is copyright compensation as a remedy not a punishment. This raises two questions: (i) how can the effectivity of the sanctioning system (or the remedy) be pursued with the expense of protecting the legitimate rights of the defendant, for copyright compensation as a remedy does not adequately guarantee it; and (ii) how can a substantial amount be justified in the light of civil sanctioning system, to which copyright compensation belongs? In the light of what has been argued above, the answers are that the effectivity of the sanctioning system cannot be pursued on the expense of protecting the legitimate rights of defendant, for these legitimate rights must be secured in all forms of procedure. Also, the general principles of civil law inhibit the justification of substantial remedy in situations in which “substantial” leads to the remedy exceeding full compensation. On the other hand, the principle of equity inhibits sentencing the defendant to a remedy that becomes unreasonable in relation to his personal situation.

4.3 Position of the Bona Fides Principle

In case KKO 2007:63, the KKO states that liability for compensation concerns also those in bona fides, which indicates that in order to protect the rightholder’s rights, the use of works contrary to the sections of the Copyright Act is as a rule compensable by copyright compensation.¹³⁴ Here they seem to consider negligence and bona fides as synonyms, as the KKO states in its reasoning that CopA Art. 57(1) obliges even a person acting in bona fides to pay compensation,¹³⁵ even though all the provision does is to leave negligence out of the grounds for liability. I disagree with the KKO and would argue that negligence as a basis for liability and acting in bona fides are not precisely the same thing. Negligence is about the carelessness of the act, how it affects the consequence, and whether the doer should realize that.¹³⁶ While bona fides is about the ignorance of the doer of the state of things in the first place.

The differing opinion in case KKO 2007:63 illustrates the difficulty rather well. The justices who had a different opinion argue that due to the defendants acting in bona fides and that the act was minor in nature, that no form of compensation would be reasonable¹³⁷ in this case. Their approach seems to be slightly different than that of the majority of the justices, as the minority sees the idea behind the CopA Art. 57(1) to be that copyright compensation must always be paid unless it becomes unreasonable.¹³⁸ This approach fulfills the requirements of legal certainty better, because protecting bona fides promotes the foreseeability of the use of law. If bona fides is not protected, people could be convicted based on matters of which they are not even expected to be aware of, and their attempts to behave according to legislation would become meaningless. The use of law would become arbitrary. Even though negligence as a ground for responsibility has been excluded regarding copyright compensation, I would argue that protection of bona fides as a general private law principle should somehow be acknowledged. Bona fides being entirely overlooked hinders the foreseeability of the use of law and the fairness of judgments, because excusably ignorant defendants can only retrospectively (if even then) evaluate what type of behavior in the situation would have been in conformity to law. So, to answer the question presented in Sect. 3.3, prevention pursued with the severity of a sanction cannot be targeted on defendants in bona fides without jeopardizing foreseeability and protection of their legitimate rights.

The CJEU’s GS Media judgment¹³⁹ also serves as an excellent example of the potential difficulties regarding copyright compensation. In the judgment the CJEU interprets the concept of communication to the public by linking. The Court confirms that communication to the public as set out in Art. 3(1) of EC Directive 2001/29 on the harmonisation of certain aspects of copyright and related rights in the information society (InfoSoc Directive) is only fulfilled, if the defendant knew or ought to have known that the linked webpage contains infringing material, ergo only negligent types of acts are sanctionable and bona fides is protected.¹⁴⁰ However, regarding the fulfillment of the copyright compensation provision in FCA Sec. 57(1), negligence is not investigated nor is bona fides protected. Therefore, according to a strictly literal interpretation of the provision, the defendant could be sentenced to pay compensation even if he/she was excusably or genuinely ignorant, which leads to an opposite result than in the GS Media judgment.¹⁴¹

As stated above, the starting point in evaluating the amount of equitable copyright compensation should be the amount of the price of legal use minus additional costs. The ideas behind justifying higher copyright compensation than the amount of legal use presented in case law and preliminary works (government bills) are reasonable and acceptable. However, they do not take into consideration the doers who do not know that they are committing an unlawful act, or more specifically do not know that any act is being committed. The lack of having the required knowledge leads to impossibility to choose to act according to the law. In addition to this, the argument of ensuring the application to license or some other way to acquire the permission to use protected material as basis for higher compensation than what the price of legal use would be, is in conflict with the principle of equity, the principle of full compensation, and the principle of non-enrichment as well as with the acceptable limit of civil law prevention, objectives of civil procedure in general, and protection of the legitimate rights of the defendant. This answers the second question posed in Sect. 3.3: the rightholder shall not gain a better financial position based on the defendant’s acts, even if the acts were unlawful.

5 Conclusions

This article studies copyright compensation as a remedy. The research question of the study is: “Which purposes may be pursued with copyright compensation and which criteria must be fulfilled in this pursuit?” The article examines the research question by first positioning copyright compensation in the sanctioning system as a remedy. Second, the article defines the theoretical and legislative limits to be followed in the use of both remedies and punishments, how they differ from each other, and what their position should be in imposing copyright compensation. Third, the article analyzes the imposition of copyright compensation in the light of the KKO’s case law and identifies and examines the problems in it in the light of the theoretical framework of the study.

The article points out, how the case law and legal literature emphasize that the defendant must not gain a better financial position through the unlawful use or infringement than he would have gained without it. The article also highlights how none of the sources express the concern of the rightholder in achieving a better financial position through receiving copyright compensation than he would have without it. The goals of IPR legislation are generally very rightholder-centered for a reason. However, the imposition of legal consequences requires the consideration of the ground rules of the entire legal system altogether. The current interpretation seems to emphasize just one perspective. The article states that, even if the aim of the exclusive right is legitimately to maximize the financial gain of one party, it must not be done at the expense of others. A judgment including substantial compensation may lead to overcompensating the loss or harm in contradiction to the principle of non-enrichment or even in accordance with unjust enrichment or punitive damages. Protecting the legitimate rights of an individual regarding both parties must be acknowledged in imposing remedies – arbitrariness is prohibited. Therefore, there is no legitimate reason why this could or should be overlooked regarding the defendant in imposing copyright compensation. There is also no legitimate reason for imposing an overcompensatory monetary remedy. Being forced to overcompensate someone else’s loss can never be equitable from the perspective of the defendant.

In criminal procedure, the sanction serves as a punishment for violating the norms, and evidence of a precisely calculated amount of damage or harm need not to be presented. The punishment is proportioned to the severity of the act according to the principle of proportionality and in accordance with other general guidelines of the criminal sanctioning system. A punishment includes the element of reconciliation, which appears in the length or scope of the punishment. This reconciliation is done for society, for disturbing societal tranquility, not to the individual rightholder for causing annoyance. Remedies, on the other hand, must always be based on a calculation due to the above-presented civil law principles and objectives of civil procedure. If one wishes to pursue the purposes defined in the KKO’s case law (assuming the grounds for criminal liability are fulfilled), the portion of payment of the “substantial” copyright compensation that exceeds the price of regular use should actually be paid to society, rather than to the individual rightholder. If one pursues the objectives of criminal law, one must also follow the rules and principles of criminal law.

The article shows the lack of protection of bona fides regarding the imposition of copyright compensation to be especially problematic concerning the digital environment. The article exemplifies the problems with situations in which the fulfillment of liability would be uncertain, even if an evaluation of negligence was made, much less if the case of bona fides was at hand. In these situations, the question remains as to how a person could have obeyed the law and avoided liability if he already excusably thought he was acting according to the law and was not even expected to understand that he was not. The effectivity of the sanctioning system must not be secured at the expense of those acting in bona fides. This will happen if the defendant does not have as much as a possibility to choose to act according to the law or have the required knowledge of the situation. This is very problematic from the point of view of foreseeability. More effective prevention should not be pursued with copyright compensation, because the risk of a “wrong” judgement is rather high, and the protection of the legitimate rights of the defendant remains inadequate. Generally, convicting one innocent party is considered worse than releasing any amount of guilty. Regarding copyright compensation (as a punishment) this would mean that convicting even one person in bona fides to overcompensatory sanction is worse than releasing any number of intentional infringers from liability.

The article argued that the amount of copyright compensation that exceeds the amount of compensation for legal use reduced with additional costs is in fact a punishment, because it is imposed without any causal connection to the rightholder’s financial loss, harm or damage, or an unjust financial benefit to the defendant. Imposing a punishment requires the fulfilment of the grounds for criminal liability, for punitive damages are forbidden. Therefore, the imposing of higher copyright compensation than the price of legal use also requires the fulfillment of the grounds for criminal liability. Based on this it can be argued that the only purpose the institution of copyright compensation can have, is to give the rightholder what could be seen to be legally his, that is a minor reimbursement for ungained benefit, and this is how it should be used. Everything exceeding that must be proven as damages. Punishments must be handed out in conformity with the criminal sanctioning system.

The system must treat everyone equally. Even if one presumes that most infringers who, for instance, unlawfully download or distribute copyrighted material online, are aware of the illegal nature of their behavior, copyright compensation cannot be used as a general preventive measure due to the flaws it has in protecting the legitimate rights of an individual, i.e. the defendant. Not one ignorant doer should have his rights violated due to the norm-breaking behavior of others. The problem regarding the use of copyright compensation is not so much in the intentional and aggravated forms of an act, but on the lowest level of liability, in other words defining what is tolerable and what is not. Copyright compensation cannot be imposed based on different grounds in acts of different severity, but the grounds for liability are the same regardless of the level of aggravation of the act. Therefore, the grounds for liability must be justifiable also regarding minor unlawfulness.

The article argues that to ensure the protection of the legitimate rights of the defendant, copyright compensation should not be used to strengthen the effects of the objective of influencing people’s behavior. In imposing copyright compensation, the court is not obliged to verify the level of knowledge or the intentions of the defendant who allegedly committed the unlawful act; the mere existence of the act and recognition of a doer are enough for the copyright compensation to actualize. Also, proving one’s innocence may be difficult, if someone else has used the defendant’s open Wi-Fi network or technical device to commit an unlawful act. The article has shown that regarding copyright compensation, the internal procedural measures of ensuring protection of legitimate rights of the defendant are not adequate. If copyright compensation can be imposed exceeding the price of legal use, that is, as a punishment, the worst-case scenario could be that the defendant is convicted of someone else’s crime in a civil procedure. Protection of the legitimate rights of the defendant does not cease even if the act was easily carried out in the digital environment.