Calculation of damages when the price of the copyright work is indeterminable.

August 8, 2023

In a recent landmark case in Mexico, the Supreme Court deliberated on an automotive company’s use of a modified version of a song by renowned singer-songwriter Ricardo Arjona in a vehicle advertisement without his consent.

Previously, courts had ordered compensation to be calculated based on 40% of the total income from the vehicle’s sales during the ad campaign’s run, as per Article 216 Bis of the Federal Copyright Law. This law stipulates that compensation should equate to at least 40% of the original product or service’s retail price, with the original product or service defined as those protected by the Federal Copyright Law. If this value cannot be determined using the above criterion, the Judge will set the compensation amount based on expert opinions.

However, in this case, the Supreme Court ruled against tying the vehicles’ price to the compensation calculation. The Court found no clear correlation between the author and the vehicle sales, as one might find with record or video sales containing copyrighted works. Consequently, when the retail price of the original product or service is indeterminable, as in this case, the Judge, aided by experts and evidence provided by the parties, will establish the compensation amount.

The Court further emphasized that using the company’s total income as the basis for compensation could deviate from the Federal Copyright Law’s compensatory intent and result in excessive assessments.

This precedent is significant as it equips our local and federal Judges with guidelines for deciding similar cases. It ensures rulings are proportionate to the damages inflicted while retaining the focus on copyright protection, which in this specific case, does not pertain to the commercialized vehicles.

OLIVARES’ civil, commercial, and copyright litigation teams are continually staying abreast of our Courts’ latest rulings. We’re committed to informing and providing our clients with the most effective opinions and strategies.