Calculation of damages in criminal IP cases : December 2024.
Date: 2025-04-23
Institutions: European Union Agency for Criminal Justice Cooperation
Subjects: EU Member State, criminal proceedings, damages, intellectual property, jurisdiction, report

Calculation of Damages in Criminal IP Cases 

Calculation of 
damages in criminal 
IP cases 

December 2024 

0 

 
 
 
 
 
 
 
Calculation of Damages in Criminal IP Cases 

This document was prepared by the Intellectual Property Crime Project at the European Union Agency for 
Criminal Justice Cooperation (Eurojust). The Intellectual Property Crime Project is funded by the European 
Union Intellectual Property Office (EUIPO) and executed by Eurojust under the terms agreed in the service 
level  agreement  signed  between  the  two  organisations  in  March  2021.  The  IPC  Project  aims  at  boosting 
cooperation and ensuring a more coherent and robust response against IP infringements across the EU. The 
project  also  focuses  on  building,  promoting  and  exchanging  knowledge,  tools  and  expertise,  along  with 
raising awareness and the provision of enhanced legal and operational support to complex cross-border IPC 
investigations. 

This document was prepared by the Intellectual Property Crime Project at the European Union 
Agency  for  Criminal  Justice  Cooperation  (Eurojust).  The  Intellectual  Property  Crime  Project  is 
funded  by  the  European  Union  Intellectual  Property  Office  (EUIPO)  and  executed  by  Eurojust 
under the terms agreed in the service level agreement signed between the two organisations in 
March  2021.  The  IPC  Project  aims  at  boosting  cooperation  and  ensuring  a  more  coherent  and 
robust  response  against  IP  infringements  across  the  EU.  The  IPC  Project  focuses  on  building, 
promoting and exchanging knowledge, tools and expertise, as well as on awareness raising and 
the  provision  of  enhanced  legal  and  operational  support  to  complex  cross-border  IPC 
investigations. 

Disclaimer 

The  designations  and  presentation  of  the  material  used  in  this  publication,  including  their 
corresponding references, do not constitute Eurojust’s expression of any view.  

This document was created using information obtained from online sources, national judgements 
published in open databases and legislation in effect at the time of writing. 

Please note that, for the purposes of preparing the present report, Eurojust used only anonymised 
judgements  published  on  the  internet  by  the  relevant  national  authorities.  Compliance  with 
personal data protection requirements in publicly available judgments is the responsibility of the 
national  authorities  that  upload  the  judgements  onto  the  national  judicial  database.  Eurojust 
cannot  be  held  liable  for  any  subsequent  changes  made  by  the  national  authorities  to  the 
published judgements, or for any personal data protection breach arising from the information 
provided in the selected judgements.  

In  the  event  of  errors  or  inconsistencies  in  this  document,  please  notify  the  IPC  Project  at 
IPCrime@eurojust.europa.eu. 

1 

 
 
 
 
 
 
 
 
 
 
 
 
 
Calculation of Damages in Criminal IP Cases 

Contents 

Executive summary 

Introduction 

Damages in criminal IP cases – what they are and why their calculation is needed 

Calculation of damages when injured parties submit civil claim in criminal 
proceedings 

Calculation of damages to determine aggravating circumstances 

Calculation of damages as mandatory element of the criminal offence  

Purpose and general conditions of damages in criminal IP cases 

Purpose of the damages in criminal IP cases 

General conditions and limitation when the damages can be awarded  

Different methods to calculate damages 

Rights holders’ lost profit 

Copyright violation cases 

Trademark violation cases 

Reasonable royalty 

Non-pecuniary (moral) damages 

Lump sum or predetermined damages  

Conclusions 

Annex   

3 

4 

5 

5 

9 

11 

15 

15 

16 

19 

20 

20 

30 

38 

41 

45 

48 

50 

2 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Calculation of Damages in Criminal IP Cases 

Executive summary 

This  report  explores  the  legal  and  practical  challenges  in  enforcing  intellectual  property  (IP) 
rights  within  criminal  proceedings,  focusing  particularly  on  damage  calculation  and  the 
methodologies employed across various jurisdictions. It highlights the role of compensation for 
damages  and  the  differing  approaches  legal  systems  take  in  calculating  both  the  infringing 
amount and the actual loss. 

Key  findings  emphasise  the  importance  of  determining  the  financial  harm  caused  by  illegal 
activities such as streaming, counterfeiting and piracy. In criminal cases, the primary objective is 
to compensate rights holders, who often are also referred to as victims or injured parties, for their 
losses, restore their financial standing and assess the seriousness of the offense. Courts often rely 
on expert analysis and server data to estimate the number of users and the duration of illegal 
activity in order to calculate damages. 

The report highlights the varying legal frameworks for damage calculation in criminal IP cases 
across the EU. Most Member States address the issue of damage calculation only if a civil claim is 
submitted  by  the injured  party.  However,  in  some  jurisdictions  the  prosecutor  may  introduce 
damage calculations to establish aggravating circumstances or because damages are a necessary 
element of the criminal offense. 

Different  methods  for  calculating  damages  are  analysed,  starting  with  the  most  common 
approach: calculating the financial loss of the rights holder, typically by estimating the profits that 
would  have  been  earned  had  the  infringement  not  occurred.  While  widely  used,  this  method 
presents  challenges  in  accurately  determining  the  actual  loss,  particularly  in  cases  involving 
copyright or trademark violations. The report reviews court practices across various countries 
and the questions that arise from these cases. 

Additionally,  the  report  examines  other  methods  employed  by  courts,  including  calculations 
based on reasonable royalty rates, moral damages, and, as a last resort, lump-sum compensation. 
These approaches vary significantly depending on the specifics of each case, particularities or 
national legislation and national court practices. 

3 

 
 
 
 
 
 
 
 
 
 
 
Calculation of Damages in Criminal IP Cases 

1 

Introduction 

The  calculation  of  damages  in  criminal 
intellectual  property  (IP)  cases  presents  a 
complex  and  multilayered  challenge  across 
jurisdictions.  One  of  the  most 
various 
important objectives is to ensure that rights 
holders,  who  have  a  status  of  victims  or 
injured parties in the criminal case, receive 
fair compensation for the damages incurred 
due  to  criminal  acts  such  as  counterfeiting, 
piracy and other forms of IP crimes. In most 
jurisdictions  across  the  EU,  the  injured 
parties  can  file  a  civil  law  claim  within  the 
criminal 
submit 
comprehensive evidence on the damage they 
suffered related to the alleged crime. 

proceedings 

and 

This  report  will  analyse  the  concept  of 
their  purpose  and  national 
damages, 
legislation on civil law claims in the criminal 
cases.  It  will  further  delve  into  different 
national  approaches  in  handling  civil  law 
claim  in  criminal  IP  cases.  This  report 
explores 
diverse  methodologies 
employed by courts in different EU Member 
States,  highlighting  the  balance  between 
detailed  damage  calculations  and 
the 
practical realities of criminal proceedings. 

the 

There is no established methodology on how 
to calculate damages in criminal IP cases at 
either  the  international,  EU  or  national 
levels. This leads to diverse and sometimes 
contradictory practice in different countries 
and  different  courts.  Traditionally,  courts 
aim to calculate damages based on a detailed 
assessment  of  the  economic  harm  suffered 
by the injured parties. This approach seeks 
to  provide  precise  compensation 
that 
accurately  reflects 
thereby 
avoiding  overcompensation.  Such  detailed 
calculations  often 
involve  financial  and 
economic  analyses,  including  lost  profits, 
hypothetical royalties and other quantifiable 
losses. However, the practical application of 
these methods can be challenging due to the 

losses, 

the 

complexity  of  the  cases  and  the  burden  on 
criminal courts. 

In many instances, the evidence provided by 
injured parties is critical in determining the 
appropriate  level  of  compensation.  Courts 
often  rely  on  submissions  from  injured 
parties, including market analyses, financial 
records and expert testimonies. Despite the 
importance of such evidence, there are cases 
where precise calculations are impractical or 
impossible  due  to  insufficient  data  or  the 
inherent  complexity  of  the  infringement’s 
impact.  In  these  cases,  criminal  courts 
sometimes refer civil claims to civil courts to 
avoid undue delays in criminal proceedings. 
Alternatively, courts may resort to awarding 
lump  sum  compensation  as  a  practical 
solution,  ensuring 
injured  parties 
receive some form of redress. 

that 

faced  by  courts  and 

The  report  will  highlight  a  number  of 
national  cases  and  practical  considerations 
that  the  courts  tend  to  consider  while 
calculating  damages.  Through  comparative 
analysis,  it  aims  to  shed  light  on  the 
effectiveness of different methodologies, the 
challenges 
the 
implications  for  injured  parties  seeking 
compensation.  By  understanding 
these 
diverse  approaches,  this  report  seeks  to 
provide  a  comprehensive  guideline  on 
possible  methodologies  to  address  the 
calculation  of  damages  in  IP  crime  cases, 
which  is  often  very  difficult  to  determine 
precisely,  and  to  demonstrate  how  various 
these 
courts  addressed  and  overcame 
challenges. 

4 

 
 
 
 
 
 
Calculation of Damages in Criminal IP Cases 

2 

Damages in criminal IP cases – 
what they are and why their 
calculation is needed 

In criminal IP cases, calculating damages is a 
serves  multiple 
that 
crucial  process 
purposes.  First,  it  provides  a  basis  for  civil 
claims  submitted  by  injured  parties  within 
criminal proceedings, ensuring they receive 
fair compensation for the harm suffered due 
to  the 
in  some 
infringements.  Second, 
jurisdictions the calculation of damages is a 
mandatory  element  of  the  crime  itself, 
helping to distinguish between criminal and 
administrative  violations  based  on  the 
severity of the harm caused. Lastly, the large 
extent  of  damages  can  also  serve  as  an 
aggravating  circumstance,  which  could 
affect  the  qualification  of  the  criminal 
offence and the severity of the penalties.  

Calculation of damages when 
injured parties submit civil claims 
in criminal proceedings 

IP rights have significant economic value not 
only  for  companies  but  also  for  public  and 
private entities, whose activities to a certain 
degree  are  founded  on  the  use  of  IP  rights. 
The  protection  afforded  by  IP  rights  foster 
culture  and 
innovation,  which  can  be 
seriously jeopardised in case the protection 
offered  by  the  IP  rights  is  not  efficiently 
enforced. 

Compensation of damages in IP infringement 
cases plays a significant role as a remedy for 
the  infringement  itself.  Damages  serve  as  a 
base for calculating the compensation to the 
injured  parties  for  the  negative  economic 
consequences of the infringement and act as 
a general deterrent for future infringements. 

International  treaties  and  EU  legislation 
provide  clear  obligations  for  the  Member 
States to ensure compensations for IP right 

When do 
courts 
assess 
damages? 

Injured parties 
submit civil law 
claims 

Damages are 
mandatory 
elements of the 
crime 

Damages are 
aggravating 
circumstances 

infringements in civil matters. For example, 
Article 45  of  the  Agreement  on  Trade-
Related  Aspects  of  Intellectual  Property 
Rights (TRIPS Agreement) indicates that the 
Member  States  must  set  the  damages  to 
adequately compensate the injury the rights 
owner has suffered. It further indicates that 
the  damages  include  the  expenses  of  the 
rights  owners  and  recovery  of  statutory 
damages,  even  if  the  infringement  was 
committed unknowingly. 

At  the  EU  level,  the  obligation  for  Member 
States to ensure that the competent judicial 
authorities  could  award  the  rights  holders 
the  appropriate  damages  is  also  set  in 
Article 13  of  Directive  2004/48/EC  on  the 
enforcement  of  IP  rights  (Enforcement 
Directive).  This  article  indicates  that  the 
damages are set considering aspects such as 
negative  economic  consequences,  including 
loss of profit; or as an alternative, setting a 

5 

 
 
 
 
 
 
 
Calculation of Damages in Criminal IP Cases 

What is Enforcement Directive 
and is it applicable to criminal IP 
cases? 

This  Enforcement  Directive  concerns 
the 
measures, procedures and remedies necessary 
to  ensure  the  enforcement  of 
intellectual 
property rights. 

the  enforcement  of 

While the directive recognises that the criminal 
sanction  can  also  constitute  a  means  of 
intellectual 
ensuring 
property rights (recital 28), Article 2(b) clearly 
indicates  that  the  provisions  of  the  directive 
cannot affect Member States’ obligations under 
the TRIPS Agreement or national provisions on 
criminal matters. 

CJEU jurisprudence is also consistent in that the 
directive is not applicable in criminal matters.  

However, national criminal courts still refer to 
the  directive  in  calculating  damages,  as  a 
document setting basic principles. 

Examples of such decisions 

to 

the 

related 

section 

entitled 

civil  proceedings. 
mainly 
Article 45 of the TRIPS Agreement is placed 
in 
and 
Administrative  Procedures  and  Remedies’. 
Additionally,  the  Enforcement  Directive  is 
not  applicable 
in  criminal  matters,  as 
confirmed by the European Court of Justice 
(CJEU) in a number of cases (2). 

‘Civil 

While  the  TRIPS  Agreement  has  a  section 
entitled  ‘Criminal  Procedures’,  it  contains 
only  one  provision –  Article 61.  This 
provision sets an obligation for the Member 
States  to  provide  criminal  procedures  and 
penalties 
in  cases  of  wilful  trademark 
counterfeiting  or  copyright  infringement 
committed  on  a  commercial  scale.  This 
shows  that  the  minimum  criteria  set  are 
related to the wilfulness and the commercial 
scale. The term ‘on a commercial scale’ refers 
to  counterfeiting  or  piracy  carried  out  as 
part of a commercial activity, meaning that it 
refers to the commercial gain from the illegal 
activity rather than to the damage caused to 
the  victim.  This  shows  that  the  TRIPS 
Agreement 
binding 
international  obligation  on  the  Member 
States  to set a  mechanism  of  compensation 
of damages in criminal proceedings. 

does 

not 

set 

Bulgarian 
Supreme Court 
of Cassation  

Spanish 
Supreme Court  

lump  sum  based  on  elements  such  as 
royalties or other fees (1). 

to  adopt 

While  these  provisions  oblige  the  Member 
States 
legislation  ensuring 
compensation  of  damages  to  the  victim,  it 
should  be  noted  that  these  provisions  are 

(1) 

(2) 

Article 13,  Corrigendum  to  Directive  2004/48/EC  of 
the European Parliament and of the Council of 29 April 
2004 on the enforcement of intellectual property rights 
(OJ  L 157,  30.4.2004,  https://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=CELEX%3A32004L0048R%28
01%29). 
Judgment  of  the  Court  of  Justice  of  25 January  2017, 
Stowarzyszenie ‘Oławska Telewizja Kablowa’ w Oławie v 

This regulation highlights that the obligation 
to determine damages is primarily set within 
civil  proceedings.  While  criminal  courts 
law  principles  to 
often  reference  civil 
establish  methods  for  calculating  damages, 
the  absence  of  an  internationally  binding 
obligation  to  set  damages  specifically  in 
criminal  proceedings  has  led  to  varying 
approaches across jurisdictions. 

In many countries, civil claims are allowed in 
criminal  proceedings,  where  the  injured 
party can come forward asking the judge to 
award the damages suffered as a result of the 
criminal act.  For example, Article 51f of the 

Stowarzyszenie  Filmowców  Polskich  w  Warszawie,  C-
367/15, 
https://eur-
lex.europa.eu/legal-
content/en/TXT/?uri=CELEX:62015CJ0367. 

ECLI:EU:C:2017:36, 

6 

 
 
 
                                                             
 
 
 
 
Calculation of Damages in Criminal IP Cases 

example 

Dutch Criminal Code indicates that a person 
who has suffered direct damage as a result of 
a  criminal  offence  may  file  their  claim  for 
damages as an injured party in the criminal 
is 
proceedings (3).  Another 
Article 100  of  the  Slovenian  Criminal  Code, 
indicating that a civil claim that results from 
a criminal offence has to be dealt with at the 
criminal  proceeding  only  at  the  request  of 
the  beneficiaries  and  only  if  that  does  not 
delay the criminal proceedings (4). Portugal, 
for  example,  uses  a  principle  of  adhesion, 
which  means  that  if  the  injured  party 
chooses  to  bring  a  civil  claim  based  on  the 
criminal offence, the claim has to be brought 
up  in  the  criminal  proceeding  and  can  be 
brought separately before civil court only in 
cases  prescribed  by  the  Criminal  Code (5). 
Portuguese court practice has confirmed the 
principle of adhesion and indicated that the 
criminal  court’s  power  is  limited  by  the 
subject  matter  of  the  proceedings,  thus  the 
claim for civil damages made in the criminal 

General conditions to submit civil 
claims in criminal cases 

A civil claim needs to be initiated by 
the injured parties 

The claim must be linked to the damages 
suffered from the criminal offence 

In some countries, it is required that the 
claim would not prolong the criminal 
proceedings 

Civil courts generally have to wait for the 
conclusion of the criminal case to finalise 
the civil case  

proceedings  must  always  be  based  on  the 
commission of the crime (6). 

the 

The 

These examples show that while civil claims 
are  allowed  in  criminal  proceedings,  they 
usually  have  to  be  initiated  by  the  injured 
parties themselves and need to be connected 
to  the  criminal  proceedings.  At  the  same 
time, some countries set limits on when the 
civil  claims  can  be  heard 
in  criminal 
proceedings. 
above-mentioned 
Slovenian Criminal Code indicates that civil 
claims in criminal proceedings can be heard 
only  if  this  would  not  delay  the  criminal 
proceedings. Similar provisions are also set 
in  the  Slovak  Criminal  Procedure  Code, 
which gives the prosecutor a right to request 
injured  parties  be  excluded  from 
that 
following 
if 
criminal  proceedings 
conditions  are  met:  (a)  there  are  a  large 
number of injured parties (more than 100); 
and (b) the participation of injured parties in 
criminal proceedings could seriously impair 
the  purpose  and  rapid  progression  of  the 
criminal  prosecution (7).  In  a  case  of  illegal 
downloading of protected movies and music, 
the  Slovak  Supreme  Court  upheld  the 
prosecutor’s  request  to  remove  injured 
from  the  criminal  proceedings, 
parties 
the  goal  of  criminal 
indicating 
proceedings  is  to  ensure  that  the  case  is 
adequately investigated and that the accused 
is brought to justice. There were more than 
100 injured parties in this case, most of them 
based  in  the  United  States.  The  court  thus 
concluded  that  the  exercise  of  individual 
injured  parties’  rights  in  large  numbers 
could jeopardise the objective and speed of 
the criminal prosecution (8). 

that 

This shows that while injured parties have a 
right  to  submit  a  civil  claim  in  a  criminal 

(3) 

(4) 

(5) 

(6) 

of 

the 

the 

Dutch 

Criminal 

Article 51f 
Code, 
https://wetten.overheid.nl/BWBR0001903/2024-01-
01/#BoekEerste_TiteldeelIIIA_AfdelingDerde_Artikel5
1f. 
Article 100  of 
https://zakonodaja.com/zakon/zkp/x-poglavje-
premozenjskopravni-zahtevki. 
See Articles 71 and 72 of the Portuguese Criminal Code, 
https://www.pgdlisboa.pt/leis/lei_mostra_articulado.
php?artigo_id=199A0071&nid=199&tabela=leis&pagi
na=1&ficha=1&so_miolo=&nversao=#artigo. 
Judgment  of  the  Court  of  Appeal  of  Guimarães, 

Slovenian  Criminal  Code. 

G1, 

2014, 

2647/06.2TAGMR. 

7 October 
https://www.dgsi.pt/jtrg.nsf/86c25a698e4e7cb7802
579ec004d3832/cf1724642aee90ec80257d4f004d91
6e?OpenDocument. 
Section  47(3) of  the  Slovak  Criminal  Procedure Code. 
https://www.slov-lex.sk/ezbierky/pravne-
predpisy/SK/ZZ/2005/301/20230601. 

(7) 

(8)  Decision  of  Supreme  Court  dated  5.10.2016  in  case 
No 2  Ndt  20/2016  2  Ndt  20/2016 –  návrh  na 
nepripustenie  účasti  poškodených  v  trestnom  konaní 
(judikaty.info). 

7 

 
 
 
                                                             
 
Calculation of Damages in Criminal IP Cases 

case,  there  are  some  safeguards  to  ensure 
that  the  civil  claims  do  not  jeopardise  the 
course  of  the  criminal  case.  In  some 
jurisdictions, it is clearly stated that the civil 
claim can be linked only to the criminal case 
while in other jurisdictions, there are legally 
set  caps  on  how  many  injured  parties  can 
participate  in  criminal  proceedings.  These 
thresholds  are  very  relevant 
in  some 
criminal  IP  cases,  such  as  cases  of  illegal 
IPTV  services,  where 
there  might  be 
hundreds of injured parties. 

This is in line with Article 6 of the European 
Convention  on  Human  Rights  on  fair  trial, 
indicating that everyone is entitled to a fair 
and  public  hearing  within  a  reasonable 
time (9).  The  requirement  of 
‘reasonable 
time’ is intended to counter excessively long 
judicial  proceedings.  If  the  proceedings  are 
unduly delayed, the accused can claim to be 
a  victim  claiming  for  redress.  In  criminal 
cases, this might take the form of a reduction 
of 
in  an  express  and 
measurable manner. 

the  sentence 

In the Netherlands, on the other hand, even 
though  it  is  usually  allowed  for  the  injured 
parties  to  submit  civil  claims  in  criminal 
proceedings,  the  courts  generally  do  not 
accept  civil  claims  in  criminal  IP  cases. 
Various  criminal  courts  have  repeatedly 
stated  that  the  answering  requests  for 
from  civil  parties  would 
compensation 
disproportionally  burden  the criminal case, 
and  therefore  the  requests  of  the  injured 
party  are  declared  inadmissible  before  the 
criminal court (10). The civil party in this case 
is allowed to bring their claim before the civil 
court once the criminal case is finalised. 

Finally, in some jurisdictions, civil claims are 
not  allowed  at  all  in  criminal  cases.  An 
example of such jurisdiction is Malta, where 
the  Criminal  Code  recognises  that  every 

criminal  offence  can  give  rise  to  both  civil 
and criminal action. However, the civil action 
is exclusively tried before civil courts, where 
the compensation for damage caused by the 
criminal  offence  is  thereby  demanded (11). 
Another example is Cyprus, where criminal 
courts have inherent jurisdiction to award a 
limited  amount  of  compensation  to  the 
victim  of  crime  in  criminal  proceedings, 
provided  that  the  accused  is  found  guilty. 
However,  this  provision  is  barely  used  and 
in  recent 
has  not  been  used  at  all 
decades (12). 

calculating 

approaches 

Overall, these examples illustrate the diverse 
and 
to 
legal 
awarding  damages  in  criminal  IP  cases. 
While  some 
jurisdictions  integrate  civil 
claims  within  criminal  proceedings,  others 
maintain a clear separation, highlighting the 
need  for  tailored  approaches  that  balance 
the  rights  of  the  injured  parties  with  the 
efficient  administration  of  justice.  In  most 
cases, the calculation of damages is initiated 
by  claims  submitted  by  the  injured  parties 
themselves.  If  no  such  claim  is  made,  the 
court  is  generally  not  obligated  to  address 
damages  unless  they  are  a  mandatory 
element  of  the  crime  or  serve  as  an 
aggravating  circumstance.  These  scenarios 
will  be  explored  in  detail  in  the  following 
chapters. 

In  contrast,  the  confiscation  or  seizure  of 
illicit  proceeds  of  crime  can  be  done 
regardless  of  whether  there  is  a  claim  for 
damages  submitted  by  the  injured  parties. 
is  designed  to 
Confiscation  or  seizure 
deprive  the  criminals  from  profits  derived 
from their criminal action. If there is a civil 
claim for damages filed in the criminal case, 
the  illicit  proceeds  could  be  used  to  cover 
fully  or  in  part  the  awarded  damages. 
Importantly,  seizure  and  confiscation  can 

(9) 

Article 6  of  European  Convention  on  Human  Rights, 
https://www.echr.coe.int/documents/d/echr/conven
tion_eng. 

https://rechtspraak.io/uitspraken/ECLI:NL:GHSGR:2
011:BR0711. 

(11)  Article 3(3) 

of 

the  Maltese 

Criminal 

Code, 

(10)  District  Court  Gelderland,  18 December  2013, 

https://legislation.mt/eli/cap/9/eng/pdf. 

ECLI:NL:RBGEL:2013:5827, 
https://uitspraken.rechtspraak.nl/details?id=ECLI:NL
:RBGEL:2013:5827;  Appeal  Court  The  Hague, 
ECLI:NL:GHSGR:2011:BR0711, 
2 February 

2011, 

(12)  Claiming  damages  from  the  offender,  Cyprus –  last 
updated 
https://e-
March 
justice.europa.eu/494/EN/claiming_damages_from_th
e_offender?CYPRUS&member=1. 

2024, 

in 

8 

 
 
 
                                                             
Calculation of Damages in Criminal IP Cases 

if  the  criminal  offense 

is 
occur  even 
considered a formal violation, and even if the 
injured  parties  (such  as  the  IP  rights 
holders)  do  not  submit  a  claim 
for 
criminal 
compensation  within 
proceedings. 

the 

A  comprehensive  overview  of  the  right  to 
submit a civil claim in criminal proceedings 
across Member States is provided in  Annex 
at the end of the report. 

Calculation of damages to 
determine aggravating 
circumstances 

as 

the 

offense 

criminal 

a  more 

Often,  determining  the  damages  caused  by 
the  criminal  offense  can  also  be  used  to 
ascertain  aggravating  circumstances  or  to 
qualify 
a 
misdemeanour. This assessment of damages 
plays a crucial role in the judicial process by 
providing 
comprehensive 
understanding  of  the  crime’s  impact.  The 
extent and severity of damages can show the 
true nature of the crime, which might not be 
immediately  evident  from  the  act  itself. 
Conversely,  if  the  damages  are  relatively 
minor and the harm caused is less severe, the 
offense  might 
a 
misdemeanour rather than a crime, leading 
to  lighter  penalties.  This  distinction  is  an 
important  step 
the 
punishment  is  proportionate  to  the  harm 
inflicted. 

in  ensuring 

classified 

that 

be 

as 

Such regulation is in line with the concept of 
proportionality,  requiring  that  sanctions 
should  not  be  disproportionate  to  the 
offence.  The  CJEU  has  indicated  that  while 
the  Member  States  have  the  authority  to 
establish  the  type  and  severity  of  the 

(13) 

Judgment of the Court of Justice of 4 October 2018, Dooel 
Uvoz-Izvoz  Skopje  Link  Logistic  N&N  v  Budapest 
Rendőrfőkapitánya, 
ECLI:EU:C:2023:791, 
C-384/17, 
https://eur-lex.europa.eu/legal-
content/en/TXT/?uri=CELEX:62017CJ0384;  Judgment  of 
the Court  of Justice of 19 October 2023, Case C‑655/21, 
ECLI:EU:C:2023:791, 
https://curia.europa.eu/juris/document/document.jsf?d

these  measures  must  be 
sanctions, 
proportionate to the severity of the criminal 
offence and must be adaptable to the specific 
circumstances of the case (13). 

For  example,  Article 388  of  the  Hungarian 
Criminal Code indicates that infringement of 
industrial property rights is considered as a 
misdemeanour punishable by up to  2 years 
of  imprisonment.  However,  part  3  of  this 
article  qualifies 
infringement  of 
the 
industrial property as a criminal offence if it 
causes financial damage on a different level. 
Depending  on  the  significance  of  this 
damage, the prison sentence could increase, 
even up to 10 years (14). A similar provision 
can also be found in Article 385(3) and (4) of 
the Hungarian Criminal Code regulating the 
copyright 
criminal 
infringements. 

sanctions 

of 

Slovak  Criminal  Code  is  another  example 
where  significant  damages  can  increase 
prison  sentences  from  up  to  3 years  for 
regular  trademark  infringement  to  up  to 
5 years if the trademark infringement causes 
significant  damage (15)  (Article 125  of  the 
that 
Slovak  Criminal  Code 
significant 
least 
EUR 26 600) (16).  Similarly,  the  Bulgarian 
Criminal Code provides for higher sanctions 
(a  prison  sentence  from  2  to  8 years  and  a 
fine)  if  the  criminal  offence  of  copyright, 
trademark or industrial design violation was 
committed  repeatedly  or  caused  harmful 

indicates 
at 

damage 

is 

ocid=278792&mode=lst&pageIndex=1&dir=&occ=first&p
art=1&text=&doclang=EN&cid=2197098. 

(14)  Article 388  of 

the  Hungarian  Criminal  Code, 

https://net.jogtar.hu/jogszabaly?docid=a1200100.tv. 

(15)  Article 281 

of 

the 
https://www.slov-lex.sk/ezbierky/pravne-
predpisy/SK/ZZ/2005/300/20231020. 
Ibid, Article 125. 

Slovak 

Criminal 

(16) 

Code. 

9 

 
 
 
 
 
                                                             
Calculation of Damages in Criminal IP Cases 

Examples of provisions setting damages as an 
aggravating circumstance 

Hungary  

Slovakia  

(3) If the infringement of industrial property rights: 
a) results in substantial financial loss, the penalty shall be 
imprisonment of between 1 to 5 years; 
b)  results  in  particularly  considerable  financial  loss,  the 
penalty shall be imprisonment of between 2 to 8 years; 
c)  results  in  particularly  substantial  financial  loss,  the 
penalty shall be imprisonment of between 5 to 10 years. 

(3) An offender shall be liable to imprisonment 
for  a  term  of  1  to  5 years  if  they  commit  an 
offence referred to in paragraph 1 or 2: 
a) and causes substantial damage thereby; 
b) for a special motive; or 
c) in a more serious manner. 

Article 388(3) of the 
Criminal Code 

Article 281(3) of 
the Criminal 
Code 

Article 459 of the Criminal Code defines the losses. 

- Substantial financial loss. Between HUF 5 million plus one 
and 50 million (approximately EUR 12 000 to 125 000). 
loss.  Between 
-  Particularly  considerable 
HUF 50 million  plus  one  and  500 million  (approximately 
EUR 125 000 to 1 125 000). 
-  Particularly 
HUF 500 million (approximately EUR 1 125 000). 

loss.  Over 

substantial 

financial 

financial 

aggravating 

circumstances 

consequences (17).  While 
the  Bulgarian 
Criminal  Code  does  not  define  ‘significant 
harmful  consequences’,  it  indicates  that 
crimes  that  cause  such  consequences  and 
other 
are 
considered 
serious 
crimes (18). 
The Polish Industrial Property Law indicates 
that  if  the  offender  has  earned  regular 
the  criminal  offence  of 
income 
trademark  infringement  or  committed  the 
offence  in  respect  of  goods  of  significant 

particularly 

from 

as 

Article 125  of  the  Criminal  Code  defines  the 
loss. 

Minor damage means damage  exceeding the amount 
of  EUR 266.  Greater  damage  means  an  amount 
reaching  at  least  10  times  that  amount.  Substantial 
damage means an amount reaching at least 100 times 
that  amount.  Damage  of  a  large  scale  means  an 
amount reaching at least 500 times that amount. 

These  aspects  will  be  used  equally  to  determine  the 
amount  of  the  benefit,  the  value  of  the  item  and  the 
scope of the act. 

value, 
the  courts  can  award  higher 
sentences – imprisonment from 6 months to 
5 years (19). 

of 

in 

case 

However, 
unauthorised 
distribution  of  copyright-protected  works, 
the  Polish  Law  on  Copyrights  and  Related 
Rights 
aggravating 
circumstances: making this criminal activity 
a permanent source of income and being an 
organiser  of  unauthorised  distribution  of 
copyright-protected  material (20),  which 

these 

only 

sets 

(17)  Article 172b  of 

the  Bulgarian  Criminal  Code, 

https://lex.bg/bg/laws/ldoc/1589654529. 
Ibid., Article 93(8). 

(18) 
(19)  Article 305(3)  of  the  Polish  Industrial  Property  Law, 
https://isap.sejm.gov.pl/isap.nsf/DocDetails.xsp?id=w

du20010490508. 

(20)  Article 116 of the Polish Law on Copyrights and Related 

rights, 
https://isap.sejm.gov.pl/isap.nsf/DocDetails.xsp?id=w
du19940240083. 

10 

 
 
 
                                                             
 
 
 
 
 
 
Calculation of Damages in Criminal IP Cases 

indicates  that  significant  damage  is  not 
included among aggravating circumstances. 
There  are  more  examples  of  criminal 
provisions which do not consider significant 
damages  as  an  aggravating  circumstance. 
For  example,  Article 337  of  the  Dutch 
Criminal  Code  and  Article 31b  of 
the 
Copyright  Act  provide  higher  sanctions 
(imprisonment not exceeding 4 years and a 
fine)  if  the  criminal  offence  is  committed 
during  the  course  of  business  or  causes 
common danger to persons or property (21). 
This shows that damage caused to the victim 
is  not  considered  as  an  aggravating 
circumstance. 

circumstances 

These  examples  demonstrate  a  diverse 
approach  to  integrating  the  requirement  of 
calculation  of  damages  into  legal  systems. 
While  some  Member  States  mandate  the 
to  establish 
assessment  of  damages 
aggravating 
and 
consequently  to  adjust  the  severity  of 
legal  systems  do  not 
sanctions,  other 
the  assessment  of 
necessarily  require 
damages 
aggravating 
circumstances.  Instead,  these  systems  may 
focus on other factors, such as whether the 
crime  was  committed  as  part  of  a  business 
perpetrator 
operation,  whether 
conducted this business as their permanent 
income  or  if  it  posed  a  common  danger  to 
persons or property. 

determine 

the 

to 

Calculation of damages as a 
mandatory element of the 
criminal offence 

In  some  rare  instances,  criminal  codes  set 
damages  as  a  constituent  element  of  the 
criminal offense itself. This approach is used 
to establish a clear threshold for the severity 
of 
to 
determine  whether  the  offense  should  be 

thereby  helping 

the  violation, 

(21)  Article 337(3)  and  (4)  of  the  Dutch  Criminal  Code, 
https://wetten.overheid.nl/BWBR0001854/2022-10-
01. 
Act, 
https://wetten.overheid.nl/BWBR0001886/2022-10-
01. 

Article 31b 

Copyright 

the 

of 

the 

criminal 

or 
addressed  within 
administrative 
jurisdiction.  By  defining 
specific  financial  thresholds  or  levels  of 
harm that categorise an offense as criminal 
legal 
rather  than  administrative,  these 
provisions  ensure  that  only  more  serious 
infringements, which cause damage above a 
certain  monetary  threshold,  are  subject  to 
criminal prosecution and penalties. 

for 

are  managed 

Certain  IP  laws  might  specify  that  only 
causing  damages  above  a 
violations 
particular  monetary  value  are  treated  as 
criminal  offenses,  while  violations  causing 
less  damage 
through 
administrative  penalties.  For  example,  the 
Lithuanian  Criminal  Code  sets  a  material 
damage threshold for the IP infringement to 
qualify  as  a  criminal  offence.  Article 204  of 
the  Lithuanian  Criminal  Code 
foresees 
criminal  sanctions 
illegal  use  of 
trademark  on  a  large  quantity  of  goods  or 
goods of considerable value when such use 
causes  serious  damage.  The  term  ‘serious 
damage’  is  defined  in  Article 212  of  the 
Criminal  Code  as  damage  exceeding  400 
is 
minimum 
EUR 22 000 (22).  The  material  damage 
threshold was increased from EUR 5 500 to 
and 
EUR 22 000 
Criminal 
Administrative 
changes,  which 
intended to reform a somewhat outdated IP 
protection system, strengthen IP protection, 
reduce the illegal use of IP-protected content 
and reduce the workload of law enforcement 
agencies. 

levels,  which 

salary 

Code 

with 

The  requirement  to  determine  material 
damage  as  part  of  the  elements  set  by  the 
criminal  code  has  also  been  confirmed  in 
Lithuanian  court  practice.  A  Lithuanian 
appellate  court  indicated  that  the  criminal 
offence  set  in  Article 204  of  the  Criminal 
Code required to prove not only an illegal act 
but  also  illegal  consequences,  which  in  this 
case is defined as serious damage. If the set 

(22)  As of 1 January 2024, one minimum salary level equals 
https://e-
EUR 55, 
tar.lt/portal/lt/legalAct/9a6ec240981111eea5a28c81
c82193a8. 

11 

 
 
 
 
 
                                                             
Calculation of Damages in Criminal IP Cases 

2023 amendments of the 
Lithuanian Criminal and 
Administrative Codes – element 
of damages 

The  main  objective  of  the 
reform  was  to  strengthen  the 
protection  of  copyrights  and 
trademarks, reduce illegal use 
goods 
and 
of  protected 
reduce 
the 
and 
content 
workload 
law 
the 
enforcement agencies. 

of 

Main  issues  identified  during 
the reform: 

-
-
-
-

a lack of case law; 
cases do not reach courts; 
IP crime is not a priority; 
of 
lack 
a 
knowledge.  

technical 

Main changes: 

-

-

-

crime 

expanded 
against 
copyrights:  unlawful  action  of 
content 
copyright 
making 
available online; 
material damage threshold raised 
from EUR 5 500 to 22 000; 
lower threshold is covered by 
administrative law. 

The result is immediately visible: 
as  of  1 July  2023,  50  people  in 
Lithuania got administrative fines 
for  illegally  downloading  music, 
copyrighted 
other 
films 
content.  

or 

(23)  Siauliai  District  Court,  Case  No 1A-143-309/2015, 
https://liteko.teismai.lt/viesasprendimupaieska/tekst
as.aspx?id=2a6dff27-6f3f-4b49-a39e-9095d3d5ddd0. 
(24)  Article 589.8 of the Lithuanian Administrative Offences 
https://www.e-
Code, 
tar.lt/portal/lt/legalAct/4ebe66c0262311e5bf92d6af
3f6a2e8b. 
(25)  Article 206 

Criminal 

Latvian 

Law, 

of 

criteria of the material damage are not met, 
criminal sanctions cannot be applied and the 
case  needs 
to 
administrative or civil courts (23). 

to  be  referred  either 

also 

reform 

strengthened 

The 
the 
administrative IP protection by empowering 
the  Lithuanian  Radio  and  Television 
Commission to directly apply administrative 
liability  for  copyright  infringements  that 
cause  damage  lower  than  EUR 22 000 (24). 
This  shows  a  very  important  distinction 
between 
administrative 
liability,  which  sets  high  thresholds  for 
criminal 
legal  regulation 
requires  the  determination  of  damages  in 
each  criminal  case,  to  ensure  the  inflicted 
damage  meets  the  set  requirement  for  the 
case to be prosecuted at a criminal court. 

liability.  This 

criminal 

and 

indicates 

Latvian  Criminal  Law  also  has  a  similar 
provision: Article 206 
that 
criminal sanctions can be imposed for illegal 
use  of  trademark  if  it  was  done  on  a 
significant  scale  or 
it  has  caused 
substantial harm (25). The element of damage 
was a mandatory element until the Criminal 
Code changes introduced in 2022, where the 
legislator  set  an  alternative  quantitative 
element:  significant  scale.  This  allows  the 
prosecutor to prove either of the elements. 

if 

Court  practice  has  been  consistent  in  that 
this criminal offence is a substantive offence, 
where not only harmful acts but also harmful 
consequences that have occurred because of 
these acts, is a mandatory element (26). The 
element of substantial harm was introduced 
in Article 206 of the Latvian Criminal Law in 
2011  to  show  the  difference  between 
criminal  and  administrative  cases (27).  This 
shows  that  in  the  Latvian  criminal  system, 
criminal responsibility for IP crimes cannot 

https://likumi.lv/ta/en/en/id/88966-criminal-law. 

(26)  Kurzeme  Regional  Court,  30 November  2015, 
https://manas.tiesas.lv/eTiesasMvc/nolemumi/pdf/2
46252.pdf. 

(27)  Kurzeme Regional Court, Case No. KA02-0181-15/6, 30 
November 
2015, 
https://manas.tiesas.lv/eTiesasMvc/nolemumi/pdf/2
46252.pdf. 

12 

 
 
 
                                                             
Calculation of Damages in Criminal IP Cases 

emerge 
demonstrated. 

if  detrimental  effects  are  not 

the 

In  the  description  of  Article 206  of  the 
legislator 
Latvian  Criminal  Law, 
provided that the substantial damage can be 
only  caused  to  the  interest  of  the  person 
protected  by  the  law.  Thus,  the  claim  that 
this  offence  may  endanger  the  economic 
interests of the state or economic growth of 
the state in relation to the IP, damage to fair 
competition  or  violation  of  the  security 
interest  of  the  consumers  goes  beyond  the 
objective  part  of  the  criminal  offence  of 
trademark  violation (28).  One  of  the  criteria 
to  define  significant  harm  is  to  assess 
material  loss,  which  at  the  time  of  the 
commission of the criminal offence was not 
less  than  10  minimum  monthly  salaries 
(EUR 7 000) (29). 

legislation 
In  other  countries,  national 
that  criminal  sanctions  are 
indicates 
imposed  only  when  the  actions  of  the 
offender  bring  substantial  material  gain  or 
cause  significant  damage.  This  shows  that 
the requirement to prove the damages is one 
of  the  alternatives,  and  might  not  be  a 
required  element 
is  evidence 
showing significant gain from illegal use of IP 
rights.  Examples  of  such  regulations  are 
Articles 284  and  288  of 
the  Croatian 
Criminal  Code (30)  or  Article 227  of  the 
Estonian Criminal Code (31). 

if  there 

These examples demonstrate that, in certain 
cases,  the  court  is  required  to  calculate 
damages  as  a  fundamental  element  of  the 
criminal offense. The extent of the damages 
suffered  by  the  rights  owners  becomes  a 

(28)  Ogres  Regional  Court,  Case  No 11816012211, 
2016, 

10 November 
https://www.at.gov.lv/files/uploads/files/6_Judikatu
ra/Tiesu_prakses_apkopojumi/2018/Apkopojums_but
isks %20kaitejums_15_03_2018.docx. 

(29)  Significant harm is defined in Article 23 of Law on the 
procedure for the entry into force and application of the 
Criminal  Law,  https://likumi.lv/ta/id/50539-par-
kriminallikuma-speka-stasanas-un-piemerosanas-
kartibu.  As  of  14 November  2023,  the  minimum 
monthly salary in Latvia is set to EUR 700 – Regulations 
regarding  the  amount of the  minimum  monthly  wage 
within the framework of normal working time and the 
calculation  of  the  minimum  hourly  tariff  rate, 
https://likumi.lv/ta/id/278067-noteikumi-par-

decisive  factor  in  determining  whether  the 
infringement  should  be  classified  as  a 
criminal  offense  or  an  administrative 
violation.  This  process  ensures  that  only 
violations  causing  harm  that  the  legislator 
considers significant enough are elevated to 
the criminal justice system. 

to 

calculating  damages 

In Bulgaria, the courts have taken a different 
approach 
in 
counterfeiting  cases.  Initially,  an  appellate 
court stated that a request for damages could 
only be brought before the criminal court if 
damages  were  a  mandatory  element  of  the 
criminal offense (32). Since Article 172 of the 
Criminal Code does not include damages as a 
mandatory  element  of 
the  crime  of 
counterfeiting,  the  court  dismissed  the 
claims of the injured parties as inadmissible. 
This  practice  was  later  clarified  by  the 
Bulgarian Supreme Court of Cassation in its 
interpretative decision on the application of 
Article 172  of  the  Criminal  Code (33).  The 
court indicated that injured parties have the 
right to compensation for damages that are a 
direct  consequence  of  the  criminal  offense, 
regardless  of  whether  damages  are  an 
element  of  the  criminal  offense.  In  cases  of 
trademark  violations,  the  criminal  offense 
inherently results in a negative impact on the 
conditions 
exclusive 
trademark  rights.  Calculating  damages  is 
essential in criminal cases, as it often helps 
determine  the  scale  of  the  criminal  offense 
and  distinguish 
from  administrative 
offenses. Additionally, the court emphasised 
that ensuring appropriate compensation for 
damages  is  mandated  by  Article 45  of  the 

exercising 

for 

it 

minimalas-menesa-darba-algas-apmeru-normala-
darba-laika-ietvaros-un-minimalas-stundas-tarifa-
likmes-aprekinasanu. 

(30)  Articles 284  and  288  of  the  Croatian  Criminal  Code, 

https://www.zakon.hr/z/98/Kazneni-zakon. 

(31)  Article 227 

of 

the  Estonian  Criminal  Code, 

https://www.riigiteataja.ee/en/eli/ee/52201201500
2/consolide/current. 

(32)  District Court of Pazardzhik, 22 June 2012, Решение на 
Окръжен  съд  гр.Пазарджик  по  чл.172б  от  НК.  – 
Кантора ‘ЮСАУТОР’. (iusauthor.com). 

(33)  Supreme Court of Cassation of the Republic of Bulgaria, 
31 May  2013.  https://www.vks.bg/talkuvatelni-dela-
osnk/vks-osnk-tdelo-2013-1-reshenie.pdf. 

13 

 
 
 
                                                             
Calculation of Damages in Criminal IP Cases 

TRIPS  Agreement  and  the  Enforcement 
Directive. 

The Bulgarian Supreme Court of Cassation’s 
interpretation  shows  the  importance  of 
compensating injured parties irrespective of 
whether damages are a statutory element of 
the  crime,  aligning  with 
international 
agreements  such  as  the  TRIPS  Agreement 
and the Enforcement Directive. 

While  the  primary  goal  of  this  damage 
assessment  is  to  establish  the  necessary 
elements of the criminal offense, it can also 
provide  a  basis  for  setting  appropriate 
compensation  for  the  injured  parties.  This 
dual purpose ensures that the rights owners 
are fairly compensated for their losses, and 
reinforces  the  offender’s  accountability.  By 
integrating damage assessment into both the 
classification  of 
the 
determination  of  compensation,  the  legal 
system upholds the principles of justice and 
proportionality, 
the 
punitive  and  restorative  aspects  of  legal 
redress. 

the  offense  and 

addressing 

both 

14 

 
 
 
 
 
Calculation of Damages in Criminal IP Cases 

3 

Purpose and general 
conditions of damages in 
criminal IP cases 

Purpose of the damages in 
criminal IP cases 

In  criminal  cases,  the  primary  purpose  of 
compensating  damages  is  to  restore  the 
victim to the position they were in prior to 
the  commission  of  the  crime.  This  can 
include  lost  profits  from  sales  or  licenses 
that  the  victim  would  have  earned  if  the 
infringement had not occurred. Additionally, 
the awarded compensation can address the 
harm made to the company’s reputation and 
public  image,  which  in  turn  devaluates  the 
protected goods and works, particularly the 
marketability  and  perceived  value  of  the 
protected  product.  By  ensuring  that  the 
offenders  compensate  the  damages  they 

Purpose of damages in IP cases 

01 

02 

03 

04 

Remedy financial losses of the rights 
holders, such as economic loss or the 
loss of a company’s image and 
reputation 

Deter individual perpetrators and 
others in the community from 
engaging in similar wrongful activities 
in the future 

Determine the seriousness of the case 
and whether it merits a criminal or 
administrative investigation 

Help courts to determine the 
appropriate penalties, taking into 
consideration the impact of the 
criminal offence 

have  caused,  justice  upholds  the  economic 
rights of creators and encourages respect for 
IP  protection,  thereby  fostering  innovation 
and creativity. 

At the EU level, Article 13 of the Enforcement 
Directive plays a crucial role in ensuring that 
rights  holders  can  obtain  appropriate 
compensation  for  damages.  This  article 
mandates 
that  Member  States  ensure 
competent  judicial  authorities  can  award 
damages that take into account all relevant 
aspects,  such  as  the  negative  economic 
consequences, including  lost  profits and,  as 
an  alternative,  a 
lump  sum  based  on 
royalties  or  fees  typically  due.  While  the 
directive  is  exclusively  applied  to  civil 
proceedings, 
as 
criminal 
demonstrated later in the report, often refer 
to  the  principles  enshrined  in  the  directive 
and subsequent CJEU practice to determine 
the damages in criminal cases. For example, 
criminal courts, when addressing civil claims 
submitted by injured parties, might refer to 
the  directive’s  standards  to  ensure  that 
compensation 
and 
proportionate  to  the  harm  suffered  by  the 
rights  holder.  This  cross-reference  helps 
maintain consistency in the enforcement of 
IP  rights  across  different  types  of  legal 
proceedings  and  reinforces  the  deterrent 
effect of awarding damages. 

adequate 

courts, 

is 

Determining  damages  in  criminal  cases  is 
also crucial for establishing the seriousness 
of  the  offense.  By  quantifying  the  financial 
loss  and  impact  on  the  victim,  courts  can 
assess  the  gravity  of  the  criminal  act  and 
determine  the  appropriate  penalties.  The 
calculation  of  damages  reflects  the  scale  of 
the  wrongdoing,  which  can  lead  to  more 
severe legal consequences and ensures that 
the sanctions imposed are proportionate to 
the harm caused. 

15 

 
 
 
 
 
Calculation of Damages in Criminal IP Cases 

to 

pay 

defendants 

For  example,  the  Court  of  Appeals  in  Paris 
ordered 
over 
EUR 22 million in damages to injured parties 
for making their copyright-protected works 
available for download on their websites (34). 
Such significant financial penalties not only 
compensate  the  victims  but  also  highlight 
the  serious  nature  of  the  offense,  ensuring 
that the punishment is aligned with the harm 
done. 

In  summary,  the  calculation  of  damages  in 
criminal  IP  cases  is  a  critical  step  in 
recognising  the  financial  harm  suffered  by 
victims  or  injured  parties,  determining  the 
seriousness  of  the  offense  and  assisting 
courts in setting appropriate penalties. This 
approach  ensures 
for  victims, 
reinforcing a legal environment that protects 
IP  rights  while  promoting  innovation  and 
creativity. 

justice 

General conditions and limitations 
on when damages can be awarded 

if 

that 

indicates 

Infringing  act.  As  the  first  step  to 
claim damages in the criminal proceedings, 
there has to be an alleged infringing act that 
qualifies  as  a  criminal  offence.  National 
legislation  often 
the 
defendant is acquitted, the court leaves the 
claim for damages as unheard. For example, 
Article 115  of 
the  Lithuanian  Criminal 
Procedure Code indicates that when passing 
the  acquittal,  the  court  leaves  the  claim  for 
damages unexamined because there is no act 
having  the  characteristics  of  a  crime  or  a 
misdemeanour.  In  this  case,  the  injured 
parties  have  the  right  to  bring  the  claim 
before  civil  courts (35).  Lithuanian  courts 
have  used  this  provision  consistently  and 
noted that if the elements of the criminal act 
are  not  established,  the  criminal  court 
cannot assess the request for compensation 

of damages. Both the purpose of criminal law 
and the general principles of law enshrined 
in  the  jurisprudence  of  democratic  legal 
states  presuppose  the  impossibility  of  the 
formation of such a legal practice when the 
rules  of  criminal  law  are  applied  in  the 
resolution of civil disputes and the conduct 
of a person in a purely civil legal relationship 
is assessed as the commission of the relevant 
criminal act. Criminal offences are violations 
of  the  law  that  violate  the  rights  and 
freedoms  of  people  and  other  values 
protected  by 
in  a 
particularly serious way. Thus, every time it 
is  necessary  to  decide  whether  an  act  is  a 
crime or other violation of the law, it is very 
important  to  assess  what  results  can  be 
achieved by other means that are not related 
to  the  application  of  criminal  penalties 
(administrative, 
civil 
sanctions, etc.) (36). 

the  Constitution 

disciplinary 

or 

that 

Damages caused. In criminal cases, 
the burden of proof regarding damages can 
rest  on  different  parties  depending  on  the 
context. If damages are a mandatory element 
instance,  when  the 
of  the  crime –  for 
prosecution  needs 
the 
to  prove 
defendant’s actions caused financial harm to 
secure a conviction – the prosecution bears 
if  the 
the  burden  of  proof.  Similarly, 
demonstrate 
seeks 
prosecution 
aggravating 
as 
circumstances – 
significant  financial  harm  or  damage  to 
reputation  that  could  show  the  severity  of 
the  criminal  case – 
it  must  provide 
compelling  evidence  to  establish  the  extent 
of those damages and their impact. This may 
include financial reports, market analyses or 
expert testimony to substantiate the scale of 
the harm caused by the offense. 

such 

to 

However,  when  a  civil  claim  is  submitted 
within  a  criminal  case,  the  injured  party 
(often  the  IP  rights  holder)  carries  the 
burden  of  proving  that  the  defendant’s 

(34)  Court  of  Appeals  of  Paris,  22 January  2019, 
https://www.legalis.net/jurisprudences/cour-dappel-
de-paris-pole-5-ch-14-arret-du-22-janvier-2019. 
(35)  Article 115 of the Lithuanian Criminal Procedure Code, 

https://e-

seimas.lrs.lt/portal/legalAct/lt/TAD/TAIS.163482/as
r. 

(36)  Siauliai  District  Court,  Case  No 1A-143-309/2015, 
https://liteko.teismai.lt/viesasprendimupaieska/tekst
as.aspx?id=2a6dff27-6f3f-4b49-a39e-9095d3d5ddd0. 

16 

 
 
 
 
 
     
                                                             
    
Calculation of Damages in Criminal IP Cases 

link  between 

actions  directly  caused  the  damage.  This 
requirement  is  crucial  in  establishing  the 
causal 
the  defendant’s 
wrongful conduct and the harm suffered by 
the  injured  party.  The  injured  party  must 
provide  clear,  detailed  evidence 
that 
demonstrates  the  nature  and  extent  of  the 
damage,  as  well  as  how  the  compensation 
sought has been calculated. 

is 

For  example,  Article 85  of  the  Bulgarian 
Criminal Procedure Code indicates that one 
of  the  mandatory  elements  of  the  claim  for 
damages is the indication of the nature and 
amount  of  the  damage  for  which  the 
sought (37).  Similarly, 
compensation 
Article 351  of 
the  Latvian  Criminal 
Procedure  Code  indicates  that  the  injured 
party  must  justify  the  amount  they  are 
requesting,  both  for  material  and  moral 
damages (38).  This  means  that  the  injured 
party  must  provide  detailed  evidence,  such 
as  financial  statements,  invoices,  expert 
reports and other relevant documentation to 
substantiate  their  claims.  In  case  of  moral 
damages, the injured party can demonstrate 
damage  to  reputation,  consumer  confusion 
and other aspects. For instance, in a case of 
copyright  infringement,  the  injured  party 
lost  sales, 
might  present  evidence  of 
decreased  market  share  or  diminished 
licensing opportunities. The court will then 
examine  this  evidence  to  determine  the 
validity and extent of the damages claimed. 

   Causal  link  between  the  infringing  act 
and  damages.  Most  jurisdictions  set  a 
requirement of the causal link between the 
infringing  activity  and  the  damage  suffered 
by  the  victim.  For  example,  the  appellate 
court  in  Portugal  indicated  that  the  most 
important element for civil compensation in 

criminal  proceedings  is  that  the  damage 
arises from a crime. The court continued that 
it  would  be  legally  inadmissible  in  the 
criminal court to hear a civil claim that is not 
based  on  compensation  for  damage  caused 
by  the  crime.  A  civil  claim  that  adheres  to 
criminal  proceedings  has  only  one  object, 
which is compensation for damages arising 
from  the  crime.  Compensation  for  damage 
that  does  not  arise  from  a  crime  no  longer 
has a penal effect of the conviction and thus 
needs to be assessed in accordance with civil 
law (39). 

Most  of  the  time,  there  are  provisions 
indicating that the civil claim in the criminal 
case will be dismissed if the link between the 
civil claim and the crime is not established. 
in  Greece,  France  and 
For  example, 
Luxembourg, the court can dismiss the civil 
action  if  the  injured  party  did  not  have 
damages resulting directly from the crime or 
if the civil party fails to prove the causal link 
between  the  defendant’s  actions  and  the 
injury suffered (40). 

is  often 

Intent.  The  intentional  violation  of 
IP  rights 
the  main  element 
separating criminal and civil proceedings. In 
civil cases, the primary focus is typically on 
the  occurrence  of  the  infringement  and  the 

Intentional violation of IP rights 
is one of the main elements 
separating civil and criminal 
proceedings. In civil cases, it is 
enough to prove negligence, 
while in criminal cases it is 
essential to prove that the 
perpetrator intentionally 
violated IP rights. 

(37)  Article 85  of  the  Bulgarian  Criminal  Procedure  Code, 

https://justice.government.bg/home/normdoc/2135
512224. 

(38)  Article 351  of  the  Latvian  Criminal  Procedure  Code, 
https://likumi.lv/ta/id/107820-kriminalprocesa-
likums. 

(39)  Court of the District of Leiria, Case No 68/11.4TAPNI. 
2017, 
18 October 
C1, 
https://www.dgsi.pt/jtrc.nsf/8fe0e606d8f56b228025
76c0005637dc/54441c99a1d44d12802581c2004e4c
01?OpenDocument. 

(40)  See summary of claiming damages from the offence in 
https://e-
Luxembourg: 
justice.europa.eu/494/EN/claiming_damages_from_th
e_offender?LUXEMBOURG&member=1; 
in  France: 
https://e-
justice.europa.eu/494/EN/claiming_damages_from_th
e_offender?FRANCE&member=1;  and 
in  Greece: 
https://e-
justice.europa.eu/494/EN/claiming_damages_from_th
e_offender?GREECE&member=1. 

17 

 
 
 
                                                             
    
Calculation of Damages in Criminal IP Cases 

resulting  harm  to  the  victim.  The  intention 
behind  the 
is  often  of 
infringing  act 
secondary  importance.  Civil  proceedings 
aim to provide remedies such as injunctions, 
monetary  compensation  and  the  return  or 
destruction of infringing goods. The goal is to 
restore the injured party to the position they 
were  in  before  the  infringement  occurred, 
regardless  of  whether  the  infringer  acted 
intentionally or negligently. 

However, in criminal cases, intent becomes a 
critical factor. For instance, Article 61 of the 
TRIPS  Agreement  mandates  that  Member 
States  provide  criminal  procedures  and 
in  cases  of  wilful  trademark 
penalties 
counterfeiting  or  copyright  piracy  on  a 
commercial  scale (41).  This  requirement 
underscores the international recognition of 
intent  as  a  defining  element  of  criminal  IP 
violations. Thus, for an IP infringement to be 
classified  as  a  criminal  offense,  it  generally 
must be proven that the infringer acted with 
deliberate 
intent  to  violate  the  rights 
holder’s  IP.  This  means  that  the  offender 
knowingly and wilfully engaged in activities 
or 
counterfeiting, 
such 
unauthorised  distribution  of  protected 
works, with the awareness that their actions 
were illegal and harmful. 

piracy 

as 

(41)  World  Trade  Organization, 

‘Agreement  on  Trade-
Related  Aspects  of  Intellectual  Property  Rights’, 

https://www.wto.org/english/docs_e/legal_e/27-
trips_01_e.htm. 

18 

 
 
 
 
 
                                                             
Calculation of Damages in Criminal IP Cases 

4 

Different methods to 
calculate damages 

rights – 
IP 
the  nature  of 
to 
Due 
encompassing 
trademarks, 
copyrights, 
patents and industrial designs – the financial 
harm  caused  by  infringement  can  vary 
widely.  Damages  must  be  calculated  to 
accurately reflect the loss experienced by the 
rights  holder,  which  can  include  direct 
financial  losses,  lost  profits  and  harm  to 
reputation. Due to the varied nature of the IP 
rights  and  the  harm  suffered  by  the  rights 
holder,  the  calculation  of  the  damages  may 
encompass  a  number  of  methods  and 
approaches,  which  unfortunately  lead  to 
different results. 

The most common approaches in calculating 
the damages include the assessment of lost 
profit,  assessment  of  royalties  that  would 
have  been  due  if  the  infringer  had  legally 
licensed IP rights, market value analyses and 
assessment of non-pecuniary damages. Each 
of  these  methodologies  has  its  advantages 
and  challenges,  and  the  choice  of  method 
often  depends  on  the  specifics  of  the  case, 
the  type  of  IP  right  involved  and  the 
jurisdiction’s  legal  framework.  Courts  often 
opt  for  different  methodologies,  which  can 
create  legal  uncertainty  and  might  lead  to 
very different approaches in similar cases. 

In  the  following  sections,  the  report  will 
further  analyse  each  of  these  methods, 
exploring  how  they  are  applied  in  practice 
and  examining  notable  case  studies  that 
illustrate their implementation. 

Methods to calculate the 
damage 

Rights holder’s lost 
profit 

-  What is the lost profit of the rights 

- 

- 

holder?  
Is value added tax (VAT) included in 
this calculation? 
Is there damage to rights holders if 
the goods did not reach the market? 

Reasonable 
royalty   

Moral  
damage 

Lump  
sum 

-  How to assess potential royalties? 
-  Can royalties be awarded instead of 

lost profit?  

-  Can  moral  damage  be  awarded  in 

criminal IP cases? 

-  How to assess the moral damage? 

- 

In which cases can the court award 
a lump sum? 

-  How  to  determine  a  reasonable 

- 

lump sum? 
Is evidence from a rights holder still 
necessary to award the lump sum? 

19 

 
 
 
 
 
 
Calculation of Damages in Criminal IP Cases 

Rights holders’ lost profit 

despite 

Almost  all  Member  States  consider  rights 
lost  profits  when  calculating 
holders’ 
damages awards in IP cases. Lost profits are 
generally  defined  as  the  earnings  the 
rights  holder  would  have  earned  if  the 
criminal  offence  had  not  occurred.  This 
concept aims to restore the rights holder to 
the financial position they would have been 
in  if  their  IP  rights  had  been  respected. 
However, 
the  widespread 
recognition  of  lost  profits  as  a  critical 
component  of  damages, 
is  no 
standardised  method  for  calculating  them. 
Courts across different jurisdictions employ 
a  variety  of  theories  and  approaches,  often 
inconsistent  and  sometimes 
leading  to 
contradictory  results.  Additionally, 
the 
calculation of lost profits in criminal IP cases 
varies significantly, depending on the type of 
IP  right  involved.  In  this  section,  we  will 
analyse  the  most  common  practices  for 
calculating 
copyright 
infringement and trademark violation cases. 

lost  profits 

there 

in 

Copyright violation cases 

In  copyright  cases,  the  most  common 
method  to  calculate  lost  profit  is  based  on 
the assumptions that each infringing sale or 
download  directly  substitutes  a  legitimate 
sale. In this case, the rights holder needs to 
demonstrate the number of infringing copies 
sold  or  the  number  of  times  the  copyright-
protected  work  was  downloaded  or 
streamed,  and  apply  their  profit  margin  to 
those lost sales. 

The baseline for calculating 
damages in copyright violation 
cases is that one illegal sale or 
download equals one legal sale. 

(42)  Paris 

2019, 
Appeal, 
https://www.legalis.net/jurisprudences/cour-dappel-

22 January 

Court 

of 

This  is  the  method  applied  by  the  French 
appellate  court  to  calculate  damages  in  a 
case  involving  illegal  movie  downloads (42). 
The  court’s  process illustrates how  the  lost 
profit can be assessed in copyright cases by 
estimating  the  profit  the  movie  companies 
would have made from each download if the 
copyright infringement had not occurred. 

The French court took a five-step approach 
in  assessing  a  large-scale  illegal  streaming 
service. 

Step 1 

The  first  step  for  the  French  court  was  to 
determine  the  basis  for  the  calculation,  i.e. 
the  loss  of  the  movie  industries  from  each 
illegal  download.  In  this  regard,  the  court 
took the average price of the DVD at the time 
of  the  illegal  activities  (EUR 14.53)  as  the 
basis for the calculation of the lost profit. 

Step 2 

The  second  step  was  to  consider  the 
deductions.  The  court  considered  that  the 
following costs should not be considered as 
part  of  the  average  amount  of  the  loss  per 
download. 

-  VAT.  This  is  subtracted  from  the  gross 
price to reflect the net value that would 
have been received by the rights holder. 

-  Royalties. Payments made to collective 
the 
management  organisations 
distribution 
copyrights  were 
deducted,  ensuring  that  only  the  rights 
holder’s net earnings were considered. 

for 

of 

-  Distribution 

commission. 

The 
commission paid to distributors was also 
deducted,  as  it  represents  a  cost  that 
would have been incurred even in legal 
sales. 

de-paris-pole-5-ch-14-arret-du-22-janvier-2019. 

20 

 
 
 
 
 
     
                                                             
 
 
Calculation of Damages in Criminal IP Cases 

Having taken all these additional costs out of 
the DVD price, the court set the loss of profit 
to EUR 10 per download. 

Step 3 

The  third  step  was  to  consider  different 
types  of  copyright-protected  works  that 
were affected by illegal downloading. In this 
regard,  the  court  indicated  that  the  rights 
holders  suffer  greater  prejudice  when 
movies exclusively available in cinemas are 
made available for illegal downloading. This 
calculation is less straightforward, but could 
potentially be more harmful due to the high 
value  of  initial  box  office  earnings.  In  this 
case, the injured parties did not submit any 
calculation to show the loss per download, so 
the court set a fixed amount of loss of profit 
per  download  to  EUR 8.  The  court  also 
applied the same deductions to this amount 
and concluded that the loss of profit for each 
download amounts to EUR 5. 

Step 4 

The fourth step was to equate the downloads 
to the DVD sales. The court took the position 
that each illegal download should be equated 
to the sale of one DVD. This straightforward 
equivalence  allowed  the  court  to  use  the 
adjusted DVD price as a basis for calculating 
damages per illegal download. Similarly, the 
court  concluded  that  each  download  of  the 
movie  exclusively  available 
in  cinemas 
should  be  multiplied  by  the  set  amount  of 
loss of profit per film.  

Step 5 

The  fifth  and  final  step  in  awarding  the 
damages was multiplication by  the number 
of  downloads.  Once  the  loss  of  profit  per 
download  was  established, 
the  court 
multiplied this amount by the total number 
of illegal downloads. This method provided a 
clear  and  quantifiable  way  to  measure  the 
financial  impact  on  each  movie  producer 
affected by the piracy. 

Final result 

Columbia 
Pictures 
Industries 
Inc. 

29 131 downloads of 
movies available only in 
cinemas 

EUR 2 2
80 933 

409 577 downloads of 
other movies 

Disney 
Enterprises 
Inc. 

48 106 downloads of 
movies available only in 
cinemas 

EUR 3 9
39 023 

710 835 downloads of 
other movies 

Paramount 
Pictures 
Corporations 

100 418 downloads of 
movies available only in 
cinemas 

EUR 3 0
08 229 

440 977 downloads of 
other movies 

Tristar 
Pictures Inc. 

22 877 downloads of 
other movies 

EUR 11
4 385 

Twentieth 
Century  Fox 
Corporation 

120 739 downloads of 
movies available only in 
cinemas 

EUR 5 7
26 257 

952 069 downloads of 
other movies 

Universal 
City  Studios 
LLP 

232 558 downloads of 
movies available only in 
cinemas 

EUR 3 6
87 809 

365 469 downloads of 
other movies 

Warner 
Bros Inc. 

57 353 downloads of 
movies available only in 
cinemas 

EUR 3 3
26 474 

573 530 downloads of 
other movies 

21 

 
 
 
 
 
Calculation of Damages in Criminal IP Cases 

to  precisely  calculate 

This  method  applied  by  the  French  court 
highlights  several 
important  aspects  of 
damage calculation in IP cases. It is of utmost 
importance 
the 
financial aspect of the case, i.e. which aspects 
were  considered  in  determining  the  price 
per download and which elements should be 
excluded  to  be  able  to  reflect  actual 
economic  loss.  The  court  further  needs  to 
precisely  determine 
the  number  of 
downloads  of  each  category  of  movie  to  be 
able to determine the precise amount for the 
damages. 

The key element is to determine 
the actual economic loss of the 
rights holder 

To  accurately  assess  the  damages  suffered  by 
rights  holders  in  copyright  infringement  cases, 
courts require specific and detailed information. 

Can the calculation of damages in 
follow  the  same 

illegal  IPTV  cases 
principles? 

damages 
cases 

in 
involving 

The  French  appellate  court’s  approach  to 
copyright 
calculating 
illegal 
infringement 
downloads  serves  as  a  strong  example  of 
how lost profits can be assessed. By carefully 
considering  various  factors,  such  as  the 
average  price  of  a  DVD,  necessary 
deductions  and  the  specific  context  of  the 
infringement,  the  court  ensured  that  the 
damages awarded were fair and reflective of 
the  actual  harm  suffered  by  the  rights 
holders.  This  approach  might  be  useful  in 
calculating  the  damages  in  cases  of  illegal 
downloading  via  torrents;  however,  with 
evolving technology, online piracy is moving 
towards  subscription-based 
illegal  IPTV 
services.  In  these  cases,  the  calculation  of 
damages  based  on  each  download  could 
disproportionally raise the evaluation of the 
lost profit of the rights holders. 

01 

02 

03 

The number  of  illegal  downloads, 
streams or sales. This data is crucial 
for  quantifying  the  extent  of  the 
infringement  and  estimating  the 
potential revenue loss. 

The  exact  cost  of  a  legitimate 
view  or  purchase.  This  includes 
determining  the  price  of  a  legal 
transaction,  whether 
through 
cinema  tickets,  DVDs  or  streaming 
services.  This  helps  establish  the 
baseline 
lost 
revenue. 

calculating 

for 

Exclusion  of  certain  costs.  Costs 
such  as VAT,  distribution  expenses 
and rights management fees should 
be excluded from the calculation to 
ensure  that  only  the  net  revenue 
loss is considered. 

courts.  The 

the  Swedish 

The calculation of damages in cases of illegal 
IPTV services was addressed in great detail 
by 
courts 
recognised  that  illegal  streaming  causes 
significant  harm  to  the  injured  parties 
because the subscription fees, which are an 
essential  part  of  their  business,  are  not 
collected.  Swedish  court  practice  follows  a 
model  for  calculating  fair  compensation 
based  on 
the  affected 
companies  would  have  received  through 
subscriptions  for  the  actual  use.  It 
is 
irrelevant  how  much  the  service  was 
actually used; the main consideration is that 
the  service  was  illegally  made  available  to 
users. This model also generally excludes the 
VAT. 

that 

fees 

the 

This model has been approved and used by 
Swedish courts in multiple cases, providing a 
consistent  and  equitable  method 
for 
assessing  damages.  By  incorporating  these 
the 
factors, 
the 
compensation 
the 
accurately 
financial  loss  suffered  by  the  legitimate 

that 
reflects 

courts  ensure 

22 

 
 
 
 
    
 
Calculation of Damages in Criminal IP Cases 

Swedish model for 
calculation of damages in 
illegal IPTV cases 

Swedish  courts  generally  accepted  that  fair 
calculated  by 
should  be 
compensation 
considering three key factors. 

The number of users who purchased 
illegal subscriptions 

The duration (in months) for which 
these users paid for the subscriptions 

The fees that the affected companies 
would have received for equivalent 
services if the subscriptions had been 
legal 

service  providers  due  to  illegal  streaming 
activities (43). 

A notable example of this model of damage 
calculation  can  be  found  in  a  criminal  case 
involving  both  illegal  card-sharing  services 
and IPTV (44). In this case, several individuals 
were  found  guilty  of  illegally  decoding 
protected broadcasting services and making 
for  a  paid 
them  available 
subscription.  Over  time,  these  individuals 
expanded their operations to include illegal 
IPTV services. The illicit activities impacted 
several broadcasting companies in Sweden, 
specifically  three  companies  related  to 
illegal  card  sharing  and  another  three 
companies  related  to  illegal  IPTV.  Upon 

to  users 

determining that the individuals had indeed 
violated  the  IP  rights  of  these  broadcasting 
companies, the court applied the established 
model to calculate the damages. 

Step 1 

the 

submitted  by 

The  first  step  was  to  determine  the 
average  price  of  subscription  of  legal 
services.  This  step 
involved  reviewing 
affected 
evidence 
companies  to  determine  a  comparable 
subscription  fee  for  the  services  that  were 
illegally.  The  courts  carefully 
provided 
evaluated the documentation supporting the 
amounts  proposed 
affected 
companies. In the absence of any objections, 
the  amounts  as 
the  courts  approved 
indicated.  It  should  be  noted  that  based  on 
previous  court  practice,  these  amounts 
excluded the VAT. 

the 

by 

Based  on  this,  the  subscription  fees  for  the 
illegal  card-sharing  services  were  set  as 
follows:  SEK 651  (approximately  EUR 56) 
per  month  for  Canal  Digital,  SEK 1 063 
(approximately EUR 92) per month for Com 
Hem,  and  SEK 485  (approximately  EUR 42) 
per  month  for  NENT.  For  the  illegal  IPTV 
services,  the  monthly  fees  were  set  at 
SEK 279  (approximately  EUR 24)  for  C-
More,  SEK 510  (approximately  EUR 44)  for 
NENT and SEK 63 (approximately EUR 5) for 
Discovery. 

Step 2 

The  second  step  was  to  determine  the 
number of users. In this regard, the courts 
relied  on  the  information  stored  on  the 
network’s customer data (customer server), 
which contained detailed files for each user, 
marking them either active or passive (also 
known as ‘past’) subscribers to the criminal 
service. For the illegal card-sharing services, 

(43)  See, for example, Case No. B-2019-15448, Case No. B-
2020-7020, Case No. B-2017-16838, Case No. B-2020-
6674 and Case No. B-2021-15213. 

(44)  Patent  and  Market  Court,  Case  No 6674-20,  16 April 

2021. 

23 

 
 
 
                                                             
  
Calculation of Damages in Criminal IP Cases 

the user count was broken down as follows: 
4 601  users  accessing  Canal  Digital’s 
channels, 1 602 users accessing Com Hem’s 
channels and 4 600 users accessing NENT’s 
channels.  For  the  illegal  IPTV  services,  the 
numbers  were  1 609  users  accessing  C-
More’s  channels,  1 601  users  accessing 
NENT’s channels and 1 457 users accessing 
Discovery’s channels. 

However, these numbers did not reflect how 
the user base changed over the duration of 
the  illegal  operations.  To  address  this,  the 
court  assumed  a  linear  growth  model, 
starting with one user at the beginning of the 
services  and  increasing  steadily  to  the 
numbers  recorded  at  the  end  of  the  illegal 
activities.  This  method  allowed  for  an 
estimation  of  the  average  number  of  users 
per  month,  thereby  providing  a  more 
accurate  reflection  of  the  total  usage  over 
time. 

the 

the 

this 

approach, 

Despite 
court 
acknowledged  that  there  could  have  been 
instances  where  a  single  user  had  multiple 
subscriptions  or  other  complicating  factors 
that  could  affect  the  accuracy  of  the  user 
count.  Recognising 
importance  of 
compensating the affected companies for the 
actual  use  of  their  services,  the  court 
determined  that  reasonable  compensation 
should  include  a  reduction  to  account  for 
these  uncertainties.  To  ensure  fairness  and 
accuracy,  the  court  decided  that  a  well-
balanced  reduction  would  be  30 %  of  the 
total  calculated  users.  This  reduction  was 
that 
intended 
adequately 
potential 
considered 
discrepancies and ensured that the affected 
companies are not overcompensated. 

to  provide  a  margin 

After considering these aspects, the court set 
the  number  of  users  for  the  illegal  card-
sharing  services  to  the  following:  1 566 
users accessing Canal Digital’s channels, 546 
users  accessing  Com  Hem’s  channels  and 
1 566 users accessing NENT’s channels. For 
the illegal IPTV services, the numbers were 
470 users accessing C-More’s channels, 461 

users  accessing  NENT’s  channels  and  403 
users accessing Discovery’s channels. 

Step 3 

The  third  step  was  to  determine  how 
many  months  the  users  paid  for  the 
illegal service. In this regard, the court used 
the  statements  of  the 
injured  parties 
claiming  that  the  period  during  which  the 
available 
transmissions  were  made 
corresponded  to  the  timeline  of  the  crime. 
Thus, based on the statements of the injured 
parties, the number of months for the illegal 
card-sharing  service  was  set  to  35 months, 
while  for  the  illegal  IPTV  it  was  set  to 
29 months. 

Final result 

Following 
the  court 
this  method, 
multiplied the price of subscription by 
the number of users and the number of 
months  the  users  paid  for  the  illegal 
services.  This  led  to  awarding  nearly 
SEK 94 million 
(approximately 
EUR 8 million)  in  damages  to  affected 
companies, both for illegal card sharing 
and IPTV services.   

This calculation was later confirmed by the 
appellate court and used in other cases. This 
was  the  first  case  in  Sweden  to  follow  this 
comprehensive  model  of  calculation  of 
damages  in  illegal  card  sharing  and  IPTV 
cases, and almost exclusively followed in the 
other cases. 

effectiveness 

The  model’s  consistency  across  multiple 
cases  highlights 
in 
its 
illegal 
addressing  the  harm  caused  by 
streaming  and  ensuring 
that  affected 
companies  receive  fair  compensation  for 
their financial losses. This approach relies on 
detailed  analysis,  allowing  for  a  reasonable 
estimation  of  the  number  of  users  and  the 
duration of illegal service usage. Courts often 

24 

 
 
 
 
Calculation of Damages in Criminal IP Cases 

and 

involve  experts  to  examine  evidence  from 
servers 
comprehensive 
provide 
explanations  for  the  figures  derived.  The 
importance  of 
thorough  analysis  was 
confirmed in a recent decision by a Swedish 
appellate  court,  which  upheld  the  damage 
calculation model used by the first instance 
court but adjusted the number of users due 
to insufficient evidence presented in the first 
instance court’s conclusion (45). 

the  methodology  of 

A  similar  approach  has  been  used  in  other 
countries.  An  example  is  the  US  Gears  TV 
case,  where 
the 
calculation  of  damages  is  laid  down  in  the 
sentencing memo of the US Gears case (46). In 
this  case,  several  defendants  fraudulently 
obtained  copyrighted  content 
from  a 
number of cable providers and streamed it to 
paid  subscribers  as  an 
internet 
streaming  service  known  as  Gears  TV.  The 
defendants  generated  tens  of  millions  of 
dollars of illicit revenue. 

illegal 

to  determine 

In the US legal system, two distinct terms are 
used in IP crime cases: ‘infringing amount’ 
and ‘actual loss’. The infringing amount is 
used 
the  sentence  and 
represents  the  overall  scale  of  the  illegal 
activity,  while  actual  loss  refers  to  the 
financial  damage  caused  to  the  injured 
parties 
calculate 
compensation.  In  the  Gears  TV  case,  the 
court applied a methodology similar to that 

used 

and 

to 

is 

In US court practice, the infringing amount in IP 
cases is calculated using this formula: 

Number of 
infringing 
items 

Retail 
value of 
genuine or 
legitimate 
items 

may 

apply 

of  the  Swedish  case  for  calculating  the 
infringing  amount,  focusing  on  the  number 
of  users  and  the  duration  of  illegal  service 
usage. However, for actual loss, the US court 
added  an  extra  consideration –  how  many 
users  would  have  subscribed  to  legal  IPTV 
services.  This  case illustrates  how  different 
varying 
jurisdictions 
methodologies  in  calculating  damages  in 
IPTV cases. While the Swedish court did not 
address the question of how many users of 
illegal  streaming  services  would  have 
switched to legal services, this issue can be 
relevant  in  some  jurisdictions.  In  those 
cases,  determining  how  many  users  would 
have  opted  for  legitimate  services  is  an 
important  step  to  demonstrate  the  actual 
impact of illegal streaming on rights holders. 

is 

typically 

calculated 

In  the  US  court  system,  the  infringing 
amount 
by 
multiplying  the  number  of  infringing 
items by the retail value of the genuine or 
legitimate 
is 
straightforward  in  cases  involving  tangible 
goods, such as a specific number of illegally 
sold movie DVDs, as demonstrated with the 
French  court’s  decision  above.  However, 

item.  This 

calculation 

How was the model for 
infringing amount adapted to 
illegal IPTV cases? 

Number of 
infringing 
items 

Retail value 
of genuine 
or legitimate 
items 

Number of 
months 
customers 
subscribed to the 
illegal services 

Price of 
legitimate 
monthly 
subscription 

(45)  Patent and Market Court of Appeal, Case No 14039-23, 

(46)  United States District Court, Sentencing Memorandum, 

5 July 2024. 

Case No 21-367-1, 27 February 2023. 

25 

 
 
 
                                                             
 
 
 
 
 
 
Calculation of Damages in Criminal IP Cases 

How to determine the number of months of illegal IPTV use if 
the beginning of the illegal act is unknown? 

Revenue model 
This  model  is  based  on  the  illegal  revenue 
earned by the defendants from the illegal IPTV 
services. The defendants earned approximately 
USD 34 million  from  monthly  subscriber  fees. 
Initially,  the  monthly  subscription  fee  was  as 
low as USD 5, increasing to USD 15 in 2018 and 
to  USD 19 
in  2019.  Various  subscription 
packages  were  available,  some  cheaper  and 
the 
some  more  expensive.  To  simplify, 
prosecution averaged the monthly subscription 
fee  to  USD 19.  By  dividing  the  total  revenue 
(USD 34 million)  by  the  average  monthly  fee 
(USD 19),  they  calculated  a  total  of  1 832 968 
subscriber  months.  Multiplying  this  figure  by 
the  average  subscription  price  per  month  for 
legitimate  services  (USD 120.68),  the  total 
estimated 
is 
approximately USD 221 million. 

infringement 

amount 

Subscriber records model 

is  based  on  the  number  of 
This  method 
subscribers  in  Gears  TV’s  customer  database. 
The database contained the start and end dates 
of services for each customer and their last login 
date.  However,  it  did  not  include  information 
about  approximately  150 000  customers  who 
purchased  subscriptions  through  resellers.  For 
these customers, the prosecution conservatively 
estimated a single month of subscription. Based 
on  this,  they  calculated  a  total  of  1 390 595 
subscription months. Multiplying this number by 
the  average  subscription  price  per  month  for 
legitimate  services  (USD 120.68),  the  total 
estimated 
is 
approximately USD 167 million. 

infringement 

amount 

determining  the 
individual  retail  value 
becomes  significantly  more  challenging  in 
cases of illegal streaming, especially when it 
involves  hundreds  of  TV  channels  over  an 
extended period, such as 3 years. 

the  illegal  service,  the  prosecution  could 
estimate  the  total  financial  impact  of  the 
infringement.  This  method  provided  a 
practical and justifiable means of calculating 
damages. 

In the Gears TV case, the  prosecution faced 
difficulties in  assessing  the  retail  value  due 
to  the  sheer  volume  and  duration  of  the 
infringing  activity.  Instead  of  attempting  to 
determine the retail value of each individual 
stream,  the  prosecution  opted  to  base  the 
calculation  on  the  cost  a  user  would  have 
paid  to  lawfully  access  the  services.  In  this 
scenario, the price of a legitimate monthly 
cable  or  satellite  subscription  was  used 
as the ‘retail value of infringed goods’. 

To  calculate  the  infringing  amount,  the 
prosecution  considered  the  number  of 
months that customers subscribed to the 
illegal  services  as 
‘number  of 
the 
infringing 
legitimate  monthly  subscription  fee  by  the 
total number of months each customer used 

the 
items’.  By  multiplying 

Having  established  the  methodology,  the 
next  step  was  to  estimate  the  price  a  user 
would have had to pay to legitimately obtain 
the  content  provided  by  the  Gears  TV 
services. To accomplish this, the prosecution 
examined each of the affected providers and 
estimated  how  much  each  provider  would 
charge  for  the  services  in  question.  This 
various 
estimation  was 
subscription  plans  and  billing  information 
provided by the legitimate service providers. 
The resulting figures were averaged, leading 
to an estimated monthly subscription cost of 
USD 120.68. This amount was reached after 
deducting taxes, fees and additional charges 
for items such as set-box rental. 

based 

on 

This  case 
is  an  example  of  how  the 
prosecution  addressed  the  situation  when 

26 

 
 
 
Calculation of Damages in Criminal IP Cases 

the  precise  beginning  of  the  illegal  IPTV 
services  in  unknown.  To  determine  the 
number  of  months  the  subscribers  used 
illegal  IPTV  services,  the  prosecution  used 
two  methods:  the  revenue  model  and  the 
subscriber  records  model.  Based  on  the 
revenue  model, 
estimated 
the 
infringement  amout  was  calculated  as 
USD 221 million,  while  based  on 
the 
subscriber  records  model,  the  total  amout 
was approximately USD 167 million. 

total 

Ultimately,  the  prosecution  chose  the  more 
conservative  estimate  of  USD 167 million. 
This  approach  underscores  the  complexity 
in  accurately 
involved 
and  challenges 
assessing the financial impact of illegal IPTV 
services,  while  also  ensuring  a  fair  and 
the  damages 
justifiable  estimation  of 
incurred. 

in  copyright 

Despite  this  calculation,  the  prosecution 
indicated that the infringement amount can 
only  be  used  to  determine  the  defendants’ 
sentences.  The  restitution  for  the  injured 
parties should be based on the ‘actual loss’, 
infringement  cases 
which 
equates to the profit the victim lost on sales 
that  were  directly  diverted  from  the  victim 
as  a  result  of  the  defendant’s  criminal 
activity (47).  In  the  Gears  TV  case,  the 
calculation of the actual loss suffered by the 
legitimate  providers  involved  several  steps 
and  required  the  expertise  of  an  appointed 
expert. The expert considered the following 
elements. 

infringing  products.  This 
Number  of 
involved  determining  the  total  number  of 
subscriptions to the infringing service. 

Sales  diversion  analysis.  The  expert 
assessed  how  many  sales  of  the  infringing 
products  were  diverted  from  legitimate 
service providers. This was based on market 
data  regarding  individuals’  likelihood  to 
purchase cable subscriptions, segmented by 
age  cohort  and  market  share  of  the 
respective  companies.  A  key  element  was 
defining  how  many  people  would  have 

purchased  legitimate  services  if  the  illegal 
IPTV  service  had  not  been  available.  The 
expert analysed the age group demographics 
and  used  existing  research  to  estimate  the 
percentage  of  individuals  who  would  have 
opted for legitimate cable TV services. Based 
on this analysis, the expert excluded around 
40 % of the subscribers, indicating that these 
individuals  would  not  have  purchased 
legitimate  cable  plans,  regardless  of  the 
availability of illegal IPTV. 

Adjustment  for  profit  margin.  The  final 
step was to adjust the estimated lost revenue 
by  the  profit  margin  of  each  provider.  The 
profit  margins  were  estimated  based  on 
publicly  available  information  from  each 
company.  The  analysis  concluded  that  the 
actual  lost  profit  of  the  injured  parties  was 
approximately USD 24 million. 

The terms of infringing amount 
and the actual loss experienced by 
the rights holder differ 
significantly.  

While the infringing amount does 
not require assessing how many 
illegal service users would have 
used legal alternatives, calculating 
this is essential to determine the 
actual loss. 

infringement 

In the Gears TV case, the prosecution faced 
the challenge of determining the retail value 
of illegal streaming services and opted to use 
the legitimate monthly subscription fee as a 
basis  for  calculation.  This  resulted  in  an 
estimated 
of 
USD 167 million,  reflecting  the  economic 
impact of the illegal operation. However, for 
restitution  purposes,  the  actual  loss  was 
calculated based on diverted sales and profit 
to  a  more  accurate 
margins, 
assessment of USD 24 million in lost profits 
for the legitimate providers, highlighting the 
broader 
difference 

between 

amount 

leading 

the 

(47)  United States District Court, Restitution Memorandum, 

Case No 21-367-1, 27 February 2023. 

27 

 
 
 
                                                             
Calculation of Damages in Criminal IP Cases 

infringement cost and the specific actual loss 
incurred by the injured parties. 

The methodologies  for  calculating  damages 
in  cases  of  copyright  infringement  reveal 
significant  differences  between  traditional 
media piracy, such as selling illegal DVDs or 
downloading  movies  via  torrent  websites, 
and  modern  digital  piracy,  such  as  illegal 
IPTV  services.  The  Swedish  court  system 
sets  a  strong  example  of  how  damages 
should  be  calculated  in  cases  of  illegal 
broadcasting  via  card  sharing  or  IPTV 
services. This model focuses on the price of 
subscription  fees  that  would  have  been 
charged for legal services, multiplied by the 
number  of  users  and  the  duration  of  the 
illegal services. A similar approach is used in 
the  US  court  system  to  determine  the 
infringement  amount.  However,  when 
calculating  the  amount  of  damages  to  be 
compensated  to  the  injured  parties,  the  US 
courts  incorporate  the  concept  of  ‘actual 
loss’.  This  involves  adding  an  additional 
element  to  the  calculation:  estimating  how 
many  users  of  illegal  services  would  have 
actually subscribed to legal services. 

28 

 
 
 
 
 
 
Calculation of damages in copyright violation cases 

Calculation of Damages in Criminal IP Cases 

1
P
E
T
S

2
P
E
T
S

3
P
E
T
S

Determine 
the price of 
the genuine 
or legal 
product 

 Price of the cinema 

ticket. 

 Price of a legitimate 

subscription. 

 Price of a legitimate 

movie rental. 

it 

To  avoid  overcompensation, 
is 
crucial to determine the exact price of 
the  genuine  product.  The  primary 
source for this information is typically 
provided  by 
injured  parties, 
though  expert  opinions  may  also  be 
used to establish the accurate price. 

the 

Determine the 
number of illegal 
downloads or the 
time period 
illegal services 
were used 

 Number of illegal 

sales. 

 Number of illegal 

streams or 
downloads. 

 Time period illegal 
services were used. 

The number of illegal sales, downloads 
or  streams  can  be  estimated  through 
expert analysis of data from the illegal 
services’ records and servers.  

If the duration of the illegal activity is 
unknown,  two  approaches  can  be 
used: 

-

-

a revenue model based on the 
illegal gains; or 
a  subscriber  records  model 
based  on 
the  number  of 
subscribers. 

Number of users 
of illegal services 
and how this 
number grew 
over time 

 Number of 

subscribers to illegal 
services over the 
entire time period. 

 Consider an analysis 
on how many users 
would have actually 
purchased legal 
services. 

 Consider a general 
reduction of this 
number to avoid 
overcompensation. 

This information can be derived from 
the illegal service’s user records. 

In  case  only  the  final  number  is 
subscribers is known, a linear growth 
model  is  generally  used  to  calculate 
the  growth  of 
the  number  of 
subscribers  over  the  period  of  illegal 
use of the service.  

While it is not common in EU countries 
to  assess  how  many  users  of 
illegitimate 
services  would  use 
legitimate  service,  this  is  a  common 
practice in the US, where this is done 
as an expert’s opinion. 

4
P
E
T
S

Determine which 
costs should be 
excluded  

 Exclude VAT. 

 Exclude related 

distribution and rights 
management costs. 

These are usually the costs associated 
with  legal  distribution  of  services, 
which  the  rights  holders  do  not 
experience  in  case  of  illegal  services. 
For  this  reason,  the  courts  generally 
tend 
the 
calculation of damages methodology.  

to  exclude 

them 

from 

29 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Calculation of Damages in Criminal IP Cases 

Trademark violation cases 

In trademark violation cases, calculating lost 
profit  as  a  measure  of  damages  is  a  crucial 
element.  The  determination  of  damages  in 
these  cases  relates  to  the  unique  nature  of 
trademarks as intangible assets, whose value 
stems  from  the  resources  and  time  the 
trademark  holder  invests  in  creating  a 
product  and  building  its  reputation.  This 
makes  it  challenging  to  quantify  the  actual 
economic 
trademark 
consequences  of 
infringement.  Although  many  factors  must 
be  considered  in  calculating  damages,  the 
most  common  approach  is  to  estimate  the 
loss  of  profit  incurred  by  the  trademark 
holder. This involves assessing the financial 
impact  on  the  trademark  holder’s  business 
due 
the 
trademark,  which  often  requires  detailed 
analysis  and  expert  testimony  to  ensure 
accuracy  and  fairness  in  the  compensation 
awarded. 

the  unauthorised  use  of 

to 

How to determine the lost profit? 

As  for  the  factors  used  to  undertake  the 
calculation of lost profits, it is often the net 
profit  that  is  taken  into  consideration.  The 
is 
number  of 
sometimes reduced due to the difference in 

infringing  products  (this 

The main formula for calculating the lost profit 
in counterfeiting cases  

Number of 
infringing 
items 

Price per 
product as 
determined 
by the court 

quality  and  higher  price  of  the  original 
product) is multiplied by a price per product 
as  determined by the  court. However, this 
formula  is  not  always  straightforward  and 
there are many factors that the courts need 
to 
before 
determining the price of the product. 

consideration 

take 

into 

Can the courts use the 
retail price of the 
original product? 

In  counterfeiting  cases,  one  of  the  biggest 
challenges 
is  accurately  calculating  the 
financial  loss  incurred  and  determining 
whether  those  who  bought  counterfeit 
goods  would  have  actually  purchased  the 
genuine  products.  This  complexity  arises 
because  genuine  products  are  typically 
much more expensive than their counterfeit 
counterparts. As a result, it is often unclear 
whether  consumers  who  opted  for  the 
cheaper counterfeit items would have been 
willing  or  able  to  pay  the  higher  prices  for 
authentic  goods.  This  discrepancy  makes  it 
difficult to assess the true economic impact 
on legitimate manufacturers and to estimate 
the 
sales  accurately.  Moreover, 
consumer  behaviour  varies  widely,  with 
some 
choosing 
counterfeits  for  cost  reasons,  while  others 
might  purchase  genuine  products  if  the 
counterfeit options were unavailable. 

knowingly 

buyers 

lost 

Despite  these  complexities,  quite  often  the 
national  courts  choose 
to  determine 
damages  based  on  the  value  of  the  original 
goods.  For  example,  in  a  case  involving  the 
sale of counterfeit pesticides, the Lithuanian 
appellate  court  confirmed  that  the  retail 
value  of  the  genuine  products  should  be 
considered when calculating damages (48). In 
this instance, the court relied on an expert’s 
the  cost  of 
to  determine 
assessment 

(48)  Siauliai  Regional  Court,  Case  No 1A-1  43-309/2016, 
2015, 

9 April 

https://liteko.teismai.lt/viesasprendimupaieska/tekst
as.aspx?id=2a6dff27-6f3f-4b49-a39e-9095d3d5ddd0. 

30 

 
 
 
    
 
                                                             
 
Calculation of Damages in Criminal IP Cases 

of 

authentic 

pesticides. 
9 kilograms 
Additionally,  the  court  followed  previous 
legal  practice  by  including  VAT  in  the  final 
calculation. 

in 

counterfeiting 

The  Bulgarian  Supreme  Court  of  Cassation 
adopted  a  similar  approach  to  determining 
damages 
cases, 
emphasising  the  retail  value  of  original 
goods  as  a  key  factor  in  compensating 
injured parties (49). The court referred to the 
Bulgarian  Trademarks  and  Geographical 
Indications  Act,  which  provides  guidelines 
for  calculating  damages,  suggesting  that  all 
circumstances,  including  the  perpetrator’s 
revenue, should be considered (50). In cases 
where 
the 
damages should be based on the retail value 
of  lawfully  produced  products  that  are 
identical  or  similar  to  the  counterfeited 
goods. 

information 

insufficient, 

is 

subsequent  Bulgarian 

court 
However, 
decisions indicate  that  using  retail  value  as 
an absolute presumption for the amount of 
damages 
is  not  always  accurate.  For 
instance,  in  a  case  involving  counterfeit 
Rolex watches, the court relied on Article 13 
of the enforcement directive, which outlines 
several criteria for determining damages in 
counterfeiting cases. 

that  all 

The  court  emphasised 
these 
elements must be considered to establish the 
actual loss to the rights holder (51). The price 
of  the  original  goods,  especially  in  cases 
where  the  counterfeit  goods  were  sold  for 
much  less,  can  lead  to  unfair  profit  of  the 
rights  holders.  In  this  particular  case,  the 
court  established  that  the  retail  value  of 
Rolex 
BGN 45 000 
(approximately  EUR 23 000)  per  watch 
while the counterfeit watches were sold for 
BGN 300  (approximately  EUR 150)  per 
watch.  In  the  situation  when  the  price 
difference  between 
the  original  and 
counterfeit goods is so great, the element of 

watches 

is 

(49)  Supreme Court of Cassation of the Republic of Bulgaria, 
31 May  2013,  https://www.vks.bg/talkuvatelni-dela-
osnk/vks-osnk-tdelo-2013-1-reshenie.pdf. 

(50)  Articles 76a  and  76b  of 

Geographical 

the  Trademarks  and 
Act, 

Indications 

Article 13 of the Enforcement 
Directive sets criteria for 
calculation of damages 

01 

Damages can be based on the actual 
prejudice  (e.g.  the  rights  holder’s 
lost  profits,  the  infringer’s  unfair 
profits,  moral  prejudice  and  other 
negative economic consequences). 

Lost  profits  are  usually  defined  as  profits  which 
would have been earned by the rights holder in the 
absence of the infringement, or which could have 
been justifiably expected. Rights holders appear to 
find it very difficult to prove that they would have 
infringers, 
earned  the  same  profits  as  the 
particularly  where  the  infringers  offer  their 
products under conditions that significantly differ 
from those of the legal channels (e.g. lower prices, 
lower  manufacturing  costs,  absence  of  related 
services). 

02 

Alternatively,  damages  can  be 
awarded as a lump sum based on 
at  least  the  (single)  amount  of 
royalties  which  would  have  been 
due  if  the  infringer  has  requested 
authorisation to use the intellectual 
property right(s) in question (e.g. if 
an 
infringer  had  concluded  a 
licensing  agreement  with  a  rights 
holder). 

Awarding  a  lump  sum  is  still  not  allowed  in  all 
jurisdictions.  However,  courts  generally  tend  to 
award  a  lump  sum  when  deciding  on  potential 
royalties  or  moral  damages.  Often  lump  sum 
damages are available only if damages cannot be 
calculated  otherwise,  for  example  in  cases  when 
the  actual  prejudice  cannot  be  calculated 
precisely. 

https://lex.bg/en/laws/ldoc/2134680576. 

(51)  Nessebar  District 

Case  No 246/2023, 
Court, 
26 September  2023,  https://dela.bg/Acts/64c61f48-
8773-44a5-a0e3-647a605b7a00. 

31 

 
 
 
                                                             
  
 
Calculation of Damages in Criminal IP Cases 

deception  of  the  customer  is  clearly  not 
present. Each buyer was clearly aware of the 
counterfeit nature of the goods and intended 
to purchase them. For this reason, the court 
trademark  owner 
concluded 
objectively  could  not  suffer  the  damage 
equal to the total price of the original goods. 

that 

the 

A similar conclusion was reached by Polish 
courts in a case involving counterfeit goods 
sold  in  a  local  market (52).  The  court  noted 
importance  of  considering  whether 
the 
buyers  of  counterfeit  goods  would  actually 
purchase the original goods if the counterfeit 
versions were unavailable. It concluded that 
the value and quality of the counterfeit goods 
indicated  that  these  customers  would  not 
have  bought  the  genuine  goods,  and  thus, 
selling  such  counterfeits  did  not  deprive 
luxury  brands  of  potential  customers.  This 
suggests  that  calculating  damages  based 
solely  on  the  retail  value  of  original  goods 
does not always accurately reflect the actual 
loss suffered by rights holders. 

the 

The  French 
Intellectual  Property  Code 
established similar elements to Article 13 of 
the enforcement directive and indicates that 
to  determine  damages,  the  court  must 
consider 
economic 
consequences of the infringement, including 
loss  of  profits,  non-material  damage  and 
profits  made  by  the  infringer (53).  This 
demonstrates  that  the  retail  value  of  the 
goods is just one of several factors that can 
help ascertain the actual damage incurred. 

negative 

incorporating  civil 

The  Bulgarian  case  is  a  good  example  of  a 
criminal  court 
law 
principles  to  establish  the  standard  for 
calculating 
criminal 
damages 
a 
enforcement 
proceeding,  despite 
directive being exclusively applicable to civil 
matters. By integrating these civil guidelines, 
the court demonstrated a commitment to a 
comprehensive  and  equitable  approach  to 
determining  damages,  ensuring  that  the 

in 
the 

(52)  District  Court  for  Kraków-Podgórze  in  Kraków,  Case 
2016, 

No. 
20 December 
651/16/P, 
https://www.saos.org.pl/judgments/270337. 

II 

K 

(53)  Article L716-14  of  the  French  Intellectual  Property 

that 

also 

shows 

losses  while  addressing 

compensation  accurately  reflects  the  rights 
holders’ 
the 
complexities  of  criminal  counterfeiting 
cases.  This 
the 
determination of damages in counterfeiting 
cases  cannot  follow  only  one  pre-defined 
criterion. This often requires a look into the 
case  as  a  whole  and  the  consideration  of 
various aspects, including (a) whether there 
was  an  element  of  deception,  (b)  whether 
the  customers  buying  counterfeit  goods 
would  buy  genuine  luxury  goods,  and  (c) 
whether  the  rights  holder  would  give  a 
license  to  sell  the  product  where  it  was 
confiscated, if the licensing fee is included in 
the calculation of damages. 

A general principle in assessing loss of profit 
is  to  compare  the  actual  situation  with  the 
hypothetical 
the 
scenario 
counterfeiting did not occur. To this end, the 
Paris Court of Appeals has developed a series 

where 

Retail value cannot be 
the only element in 
assessing damages 

While  the  retail  price  of  genuine  goods  is  an 
important  factor  for  courts  to  consider  when 
determining  damages,  relying  solely  on  this 
criterion  could  lead  to  overcompensation.  In 
counterfeiting cases, where proving lost profits 
is  challenging –  especially  when  infringing 
activities  diminish  the  value  of  legal  sales – 
courts must also consider other factors.  

The  price  of  counterfeit  goods  and  the  profits 
made by the perpetrator are examples of such 
factors, which should be evaluated on a case-by-
case basis. 

https://www.lexbase.fr/texte-de-loi/art-

Code, 
l71614-code-de-la-propriete-
intellectuelle/L7016IZU.html. 

32 

 
 
 
                                                             
Calculation of Damages in Criminal IP Cases 

US sentencing guidelines – how 
to assess retail value 

According to the Federal Sentencing Guidelines 
on counterfeiting, courts should use either the 
retail value of the trademark-protected item or 
the  counterfeit 
the 
infringement amount. These guidelines specify 
criteria for when the retail value of the original 
product should be used. 

to  determine 

item 

The infringing item is identical or substantially 
equivalent to a potential customer. 

The retail price of the counterfeit item is 
difficult to evaluate without unduly prolonging 
criminal proceedings. 

The retail price of the counterfeit item is not 
less than 75 % of the original item’s price. 

The retail value of the original item provides a 
more accurate assessment of the pecuniary 
damage to the rights holder. 

In cases involving counterfeit labels or 
packaging not affixed to goods but which, if 
used, would appear identical or substantially 
equivalent to a potential customer. 

In other cases, the guidelines suggest using 
the retail price of the counterfeit good. 

in 

damage 

financial  methods 

of  factsheets  to  guide  courts  on  calculating 
economic 
counterfeiting 
cases (54). These factsheets apply to both civil 
and  criminal  cases  and  employ  complex 
to 
accounting  and 
calculate the damage. The main principle is 
to  determine  what  the  rights  holder  would 
have  earned  if  the  infringing  act  had  not 
taken place. This method requires a detailed 
assessment  of  the  rights  holder’s  financial 
records  and  an  understanding  of  market 
changes,  compelling  the  courts  to  employ 
competent  experts 
to  make  accurate 
determinations. 

While this approach seems to offer the most 
accurate calculation of lost profit, it is also a 
very  complex  assessment  that  criminal 
judges are often reluctant to undertake. For 
example,  Polish  courts  have  acknowledged 
in several cases that while there is no doubt 
that  damage  occurs  to  the  rights  holder  in 
cases of counterfeiting, precisely calculating 
this  damage 
task (55). 
Nonetheless, the courts have also concluded 
that  the  difficulty  in  determining  the  exact 
amount of compensation cannot be a reason 
to  withhold  compensation  entirely.  The 
nature  of 
the  crime  of  counterfeiting 
requires  the  court,  or  a  court-appointed 
expert, to adopt a methodology that arrives 
at a reasonable amount. 

is  a  difficult 

The  Polish  court  emphasised  that  the 
primary source of information should be the 
injured party’s estimation of their loss due to 
the  crime  of  counterfeiting.  They  are  the 
most  knowledgeable  about  their  business 
and  the  costs invested in  the  production  of 
the particular item. These estimations need 
to  be  assessed  against  several  factors, 
particularly the evaluation of the profits the 
injured  party  would  have  made  if  the 
harmful  event  had  not  occurred.  Other 
factors  could  include  the  value  of  the 
counterfeit 
the 
perpetrators made from selling counterfeits 

income 

goods, 

the 

(54)  Compensation  for  economic  damage,  Methodological 
(2024), 

and  Glossary – 

Sheets 
3rd  Edition 
https://www.cours-appel.justice.fr/paris/la-
reparation-du-prejudice-economique. 

(55)  Regional Court in Piotrków Trybunalski, IV Ka 746/18, 
15 February 
https://orzeczenia.piotrkow-
tryb.so.gov.pl/content/$N/152515000002006_IV_Ka_
000746_2018_Uz_2019-02-15_002. 

2019, 

33 

 
 
 
                                                             
 
Calculation of Damages in Criminal IP Cases 

and  an  analysis  of  the  company’s  financial 
statements to determine the potential profit 
it  would  have  made  if  the  crime  had  not 
occurred. 

Assessing  all  of  these  elements  allows  the 
courts to reach a compensation amount that 
not only ensures appropriate reparation for 
the  injured  party  but  also  prevents  undue 
compensation.  By  considering  the  injured 
party’s insights, the perpetrator’s gains and 
a thorough financial analysis, the courts can 
determine the true extent of the damage and 
the 
compensation  more 
accurately  and  fairly.  This  comprehensive 
fair 
approach  balances 
restitution with the complexity of calculating 
economic 
in  counterfeiting  cases, 
ultimately  contributing  to  a  more  just  legal 
process. 

appropriate 

the  need 

loss 

for 

A general principle in assessing 
loss of profit is to compare the 
actual situation with the 
hypothetical scenario where the 
counterfeiting did not occur 

01 

02 

Assess  the  injured  party’s  financial 
records 
to  determine  potential 
profits  the  company  would  have 
made  if  the  crime  of  counterfeiting 
did not occur.  

Such an assessment requires detailed 
analysis  of  the  company’s  financial 
records,  which  are  often  deemed 
business secrets. To do so, the expert 
in  financial  matters  could  make  the 
assessment and provide the opinion 
to the court.  

The  Swedish  court  has  taken  a  different 
approach  in  calculating  the  actual  loss (56). 
As a first step, the court rejected the model 
provided  by  the  injured  parties,  which  was 
based  on  the  retail  value  of  the  original 
goods  multiplied  by 
the  number  of 
counterfeit  goods.  The  court  indicated  that 
retail  price  needs  to  be  evaluated  against 
several elements specific to each case. In this 
case, the court noted that the injured parties 
did not have a single set retail price, as this 
could  vary  based  on  discounts  regularly 
applied to different retailers, which could be 
even  up  to  49 %.  Taking  this  aspect  into 
account, the court set a retail price of 56 % of 
the  price  to  the  consumer,  excluding  the 
VAT. 

illustrate 

the  diverse 
These  examples 
practices  within  EU  courts  concerning  the 
calculation  of  damages  in  counterfeiting 
cases. While most courts consider the loss of 
profits as the primary criterion, the methods 
for  calculating  this  loss  vary  significantly. 
Typically, courts start their analysis with the 
retail  price  of  the  original  goods multiplied 
by the number of infringing items. However, 
they  also  recognise  that  this  alone  cannot 
capture the full extent of the damages. 

Overall,  while  there  is common  recognition 
of the need to compensate for lost profits, the 
methods  and  criteria  used  to  determine 
losses  vary.  This  highlights  the 
these 
complexity  of  addressing  IP  infringements 
and  underscores 
importance  of 
considering  multiple  factors  to  ensure  fair 
for  rights 
and  accurate  compensation 
holders.  By 
specific 
considering 
circumstances of each case and employing a 
detailed  and  nuanced  approach,  courts  can 
better 
in 
just 
counterfeiting cases. 

outcomes 

achieve 

the 

the 

(56)  Patent  and  Market  Court,  Case  No.  B6871-14, 
2016, 

13 October 

https://lagen.nu/dom/pmod/2018:7. 

34 

 
 
 
                                                             
 
 
Calculation of Damages in Criminal IP Cases 

How  to  assess  whether  the  counterfeit 
goods were placed in the market 

Court  practices  across  various  jurisdictions 
vary  significantly  in  determining  whether 
counterfeit  goods  that  never  reach  the 
market can still cause damage to victims. The 
primary  question  revolves  around  whether 
the  victim  suffers  any  damage 
if  the 
counterfeit products are intercepted before 
being  sold.  The  issue  of  compensation  for 
damages  often  differs  from  the  assessment 
of the crime of counterfeiting itself. 

is 

considered 

In  cases  where  the  criminal  offense  of 
counterfeiting 
formal – 
meaning  that  it  does  not  require  harmful 
the  crime’s 
consequences  as  part  of 
elements – the offense is completed with the 
mere use of the counterfeit goods. Therefore, 
the sale of the goods in the market is often 
not  a  required  element  of  the  criminal 
offense.  In  such  instances,  it  is  sufficient  to 
identify the counterfeit goods and establish 
their value, which is often used to determine 
the  scale  of  the  criminal  offense.  For 
example, 
the  Spanish  Supreme  Court 
indicated  that  the  Spanish  Criminal  Code 
does  not  require  determining  the  specific 
number of counterfeit products, nor does it 
mandate  consideration  of  the  goods’  value. 
The key element of this article is the use of 
trademarks for commercial purposes, which 
infringes  on  the  rights  of  the  trademark 
holders (57). 

However,  when  determining  the  amount  of 
compensation,  it  is  necessary  to  assess 
whether the victims were genuinely harmed. 
In  this  regard,  and  in  the  absence  of  clear 
guidance 
legislation,  court 
practices  vary  significantly.  Some  courts, 

in  national 

such  as  those  in  the  Netherlands,  place 
substantial  emphasis  on  whether 
the 
counterfeit  goods  were  actually  placed  on 
the market (58). The Dutch courts view this as 
a  complex  issue  that  can  unduly  burden 
criminal courts, often referring civil claims in 
IP  cases  to  civil  courts  for  resolution. 
Similarly,  Latvian  courts  have  ruled  that 
there is no evidence of damage if counterfeit 
goods  were  never  offered  for  sale  or  sold, 
thus negating claims of harm (59). 

the  number  of  products 

In  contrast,  the  Swedish  court,  when 
assessing 
to 
consider  in  calculating  damages,  indicated 
that not only counterfeit products that were 
sold, but also those still in stock but placed 
for sale, should be considered (60). The court 
reasoned  that  once  such  products  are 
marketed,  they  are  considered  as  being 
offered for sale. 

Polish  courts  have  also  taken  a  more 
nuanced  approach.  In  a  case  concerning  an 
attempt  to  sell  counterfeit  goods,  the  court 
acknowledges  that if  the sale of counterfeit 
goods is halted before the products reach the 
market,  it  cannot  be  objectively  concluded 
that  the  original  products’  sales  were 
negatively impacted (61). However, they also 
allow  for  the  possibility  of  damages  if  the 
injured  party  can  demonstrate  lost  income 
from  licensing  fees  if  the  injured  parties 
prove such loss. 

Furthermore, Polish courts have recognised 
that  merely  offering  counterfeit  goods  for 
sale can harm the injured party’s reputation, 
cause  consumer  confusion  and  reduce 
consumer 
the  original 
products.  In  addition,  offering  products 
marked with identical trademark signs at a 
much  lower  price  than  the  official  price 
affects  the  market  behaviour  of  consumers 

confidence 

in 

(57)  Spanish  Supreme  Court,  Case  No.  STS  611/2023, 
13 June 2023, https://vlex.es/vid/939916136. 
(58)  District  Court  Gelderland,  18 December  2013, 

ECLI:NL:RBGEL:2013:5827, 
https://uitspraken.rechtspraak.nl/details?id=ECLI:NL
:RBGEL:2013:5827. 

(59)  Kuzeme  Regional  Court,  Case  No.  KA02-0181-15/6, 
30 November 
2015, 
https://manas.tiesas.lv/eTiesasMvc/nolemumi/pdf/2

46252.pdf. 

(60)  Patent and Market Court of Appeal, Case No. B9635-16, 
2018, 

25 January 
https://lagen.nu/dom/pmod/2018:7. 

(61)  District  Court  in  Jelenia  Góra,  Case  No.  VI  Ka  96/15, 
https://orzeczenia.jelenia-
31 March 
gora.so.gov.pl/content/$N/155005000003006_VI_Ka_
000096_2015_Uz_2015-03-31_002. 

2015, 

35 

 
 
 
 
                                                             
Calculation of Damages in Criminal IP Cases 

and  might  indeed  divert  them  from  buying 
original goods in the future. Thus, the court 
concluded  that  even  the attempt  to sell  the 
counterfeit  goods  can  cause  damage  to  the 
injured party; they consider such actions as 
potentially  causing  non-pecuniary  damage 
rather than a direct loss of profits. 

Similarly, Lithuanian courts have ruled that 
even  sales  to  undercover  police  agents  can 
lead  to  damages  for  victims.  The  court 
rejected  the  defence’s  arguments  that  no 
damage  occurred  simply  because 
the 
counterfeit goods never reached the market, 
emphasising  that  the  interception  of  these 
goods  by  law  enforcement  does  not  negate 
the potential harm to the victim because the 
goods  did  not  reach  the  market  because  of 
the  defendant’s 
circumstances  beyond 
control (62). 

Court  practices 
jurisdictions  are  varied 

across  different  EU 
in  addressing 

whether counterfeit goods that do not reach 
the  market  can  cause  damage  to  victims. 
While  some  courts  emphasise  the  physical 
placement  of  counterfeit  goods  on  the 
market  as  a  key  factor  in  determining 
damages,  others  consider 
the  broader 
implications of offering counterfeit goods for 
sale,  including  potential  reputational  harm 
and  consumer  confusion.  Despite  this,  it  is 
generally  accepted  that  counterfeit  goods 
that  were  not  placed  for  sale  cannot  cause 
loss  of  profit  to  the  victims.  In  these  cases, 
the court should assess other type of damage 
to  the  victims –  such  as  loss  of  profit  from 
licensing  fees  or  moral  damage.  These 
aspects are addressed in more detail in the 
following sections.  

Different national approaches on whether the counterfeit goods need to reach 
the market to cause damage to the rights holder 

View 1 

View 2 

View 3 

Since  the  assessment  of  the  crime  of 
counterfeiting  and  the  calculation  of 
different 
involve 
damages 
considerations, it is possible for a court 
to  determine  that  no  damages  were 
caused  even  if  the  crime  itself  is 
established. This differentiation arises 
because the legal criteria for proving a 
criminal  act  do  not  always  align  with 
those  required 
for  demonstrating 
financial harm. 

Courts  often  conclude  that  if  the 
counterfeit  goods  were  not  actually 
placed on the market, the rights holder 
did not suffer any damage, as the sale 
of the original goods was not impacted.  

If 

the 

the 

consider 

goods 
for  sale? 
goods 

Some 
jurisdictions  adopt  a  more 
nuanced  approach,  where  courts 
carefully 
specific 
circumstances  of  each  case  when 
assessing damages. 
- Were 

already 
the 
advertised 
were 
counterfeit 
advertised,  even  those  still  in 
stock  could  be  considered  as 
causing damage to the victim. 
- Why did the goods not reach the 
the  goods  were 
market? 
prevented 
the 
market because they were sold to 
undercover  agents,  they  might 
still  be  regarded  as  causing 
damage. 

from  reaching 

If 

Some  jurisdictions  recognise  that  the 
mere  manufacturing  of  counterfeit 
goods  can  cause  harm  to  the  victims, 
even  if  the  goods  never  reach  the 
market.  This  harm  extends  beyond 
direct  financial  losses  and  touches  on 
more  intangible  aspects,  such  as  the 
damage  to  the  brand’s  reputation  or 
the potential loss of customer loyalty. 
types  of  harm  are  often 
These 
non-pecuniary 
categorised 
damages,  which  differ 
the 
from 
traditional  assessment  of  lost  profits. 
While lost profits are calculated based 
on  measurable  financial  impact,  non-
pecuniary  damages  require  a  more 
the 
nuanced  evaluation  of  how 
counterfeit  activity  has  affected  the 
brand’s intangible assets. 

as 

(62)  Siauliai  District  Court,  Case  No 1A-143-309/2015, 
https://liteko.teismai.lt/viesasprendimupaieska/tekst

as.aspx?id=2a6dff27-6f3f-4b49-a39e-9095d3d5ddd0. 

36 

 
 
 
                                                             
 
 
 
Calculation of Damages in Criminal IP Cases 

Calculation of damages in copyright violation cases 

The number of infringing products is multiplied by a 
price per product as determined by the court 

The starting point is always the information provided by the 
victims / injured parties 

What happens if the 
rights holder does not 
provide sufficient 
information? 

The  market  situation  can  also  be  assessed  by  an  expert,  and 
courts take different approaches.  

  Many  courts  claim  that  this  is  not  a  reason  to  dismiss  the 
claim  for  damages  and  that  fair  remuneration  should  be 
determined on the reasonable assessment of the market in 
question. 

  Other courts indicate that such an assessment requires the 
knowledge  of  civil  procedures,  analysis  of  which  would 
unreasonably prolong criminal proceedings.  

How to calculate the price of the product? 

Can a retail price of the 
genuine items be a basis 
for calculation of 
damages? 

While the retail value of the original goods is often the main basis 
for  calculation  of  damages,  the  following  factors  must  be  taken 
into consideration: 

 

the  difference  between  the  price  of  the  original  and 
counterfeit goods; 

  profits made by the perpetrator;  
  whether the goods were placed for sale; 
  assessment  of  a  potential  situation  on  how  much  the 
rights  holders  would  have  earned  if  the  crime  of 
counterfeiting did not occur.  

Which costs should be excluded? 

Generally, VAT and 
other associated costs 
should be excluded 

In  most  jurisdictions,  VAT  is  excluded  from  the  calculation  of 
damages, and only the price of goods sold to retailers, after any 
discounts, is considered. Additionally, courts may exclude other 
costs  such  as  transportation,  storage,  licensing  fees  and  other 
associated expenses that the rights holders do not incur when 
counterfeit goods are sold. 

37 

 
 
 
 
 
 
Calculation of Damages in Criminal IP Cases 

Reasonable royalty 

One  prevalent  method  adopted  by  various 
Member  States  for  assessing  damages  is 
based  on  a  reasonable  royalty.  This 
approach estimates the amount of royalties 
that would have been due if the infringer had 
sought  proper  authorisation,  such  as  a 
license,  from  the  rights  holder.  Reasonable 
royalty  damages  aim 
fair 
compensation  that  reflects  the  value  of  the 
infringed  IP,  ensuring  that  rights  holders 
receive a monetary equivalent of what they 
would have earned through lawful licensing 
agreements. 

to  provide 

that 

court 

indicated 

The  Swedish  Copyright  Act  specifies  that 
compensation  is  payable  only  if  and  to  the 
extent  that  it  is  reasonable (63).  In  a  case 
where the perpetrator was selling copies of 
designer furniture to customers in Sweden, 
reasonable 
the 
remuneration should be based on the royalty 
or license fee that would have been paid if a 
license had been granted (64). This fee should 
be  determined  according  to  current  tariffs, 
collective agreements or industry standards. 
As  conditions  vary  between  industries  and 
products,  there  is  no  universally  accepted 
for  calculating  such  a 
level  or  basis 
hypothetical 
fee. 
royalty  or 
Ultimately,  the  amount  of  compensation 
depends on the evidence presented in each 
individual case. 

license 

A  starting  point  in  assessing  hypothetical 
licensing fees is the information provided by 
the injured party. This calculation should be 
based  on  usual  industry  license  fee  levels 
and must be precise. Only when the product 
is sold in a market where no licensing exists 
can 
reasonable 
compensation  based  on  other  factors,  such 
as the profit made by the perpetrator or the 
profit  the  rights  holder  would  have  made 
from  selling  the  corresponding  number  of 
original  products.  However,  even  in  such 

estimate 

court 

the 

cases,  the  court  should  aim  for  a  level  of 
remuneration  corresponding  to  a  potential 
royalty  or  licensing  fee  to  avoid  significant 
overcompensation.  The  court  also  noted 
that,  unlike  in  the  calculation  of  lost  profit, 
the  calculation  of  potential  licensing  fees is 
irrelevant  to  whether  the  victim /  injured 
party  would  have  otherwise  sold  the 
corresponding number of original goods. 

In this case, the injured parties indicated that 
due  to  high  production  costs,  the  licensing 
fee  corresponds  to  32 %  of  the  consumer 
price,  including  VAT.  The  court  noted  that 
this corresponds to 50 % of the retail price, 
which  seemed  excessively  high  for  any 
licensee. Nevertheless, the court considered 
the  nature  of 
the 
production costs incurred by the companies 
when 
reasonable 
compensation,  along  with  the  profits  made 
by the perpetrator. Taking all these elements 
into  account,  the  court  concluded  that  an 

the  products  and 

determining 

Should the criteria of lost profit 
or reasonable royalty be 
applicable in criminal 
counterfeiting cases? 

the 

Swedish 

While  calculating  damages  based  on  lost 
profits is the most common approach in many 
jurisdictions, 
example 
demonstrates that some courts opt to calculate 
damages  based  on  reasonable  royalties.  This 
method  addresses  questions  such  as  whether 
the  retail  price  should  be  considered  or 
whether the injured party would have actually 
sold the same quantity of goods. By focusing 
on what the injured party would have earned 
through  licensing,  this  approach  provides  an 
fair 
to 
alternative  way 
compensation. 

determine 

(63)  Government 

Bill 

2008/09:67 

p. 233, 

https://lagen.nu/prop/2008/09:67#sid233. 

(64)  Patent and Market Court of Appeal, Case No. B9635-16, 

25 January 
https://lagen.nu/dom/pmod/2018:7. 

2018, 

38 

 
 
 
 
                                                             
Calculation of Damages in Criminal IP Cases 

estimated  license  fee  of  15 %  of  the  retail 
price plus VAT would reasonably reflect the 
loss  of  the  rights  holders.  Based  on  this 
estimated licensing fee, the court calculated 
the damages to be compensated to the rights 
holders. 

After  establishing  a  baseline,  the  court 
analysed  the  quantity  of  counterfeit  goods 
sold  over  the  relevant  period.  Since  sales 
data was incomplete for the entire duration 
of  the  illegal  activity,  the  court  divided  the 
timeframe  into  four  distinct  periods,  each 
reflecting varying levels of known sales. For 
each period, the court assigned a ratio based 
on  the  confirmed  sales  figures.  Using  these 
ratios, along with an estimated licensing fee, 
the court calculated the damages, ultimately 
SEK 26 million 
awarding 
(approximately  EUR 2.2 million) 
the 
to 
rights holders. 

nearly 

the  primary  basis 

This decision was later revised and amended 
by  the  appellate  court.  The  appellate  court 
confirmed the methodology used by the first 
instance court and agreed that the licensing 
for 
fee  should  be 
calculating 
compensation. 
However,  the  appellate  court  found  that  a 
15 %  licensing  fee  was  unreasonably  high 
and instead set the licensing fee at 2 % of the 
retail price, excluding VAT. This reduced the 
awarded damages to around SEK 1.5 million 
(approximately EUR 135 000). 

reasonable 

approach  provides 

This  case  demonstrates  that 
in  some 
jurisdictions,  damages  are  calculated  based 
on  reasonable  royalties  rather  than  lost 
profits.  This 
an 
assessing 
alternative 
damages,  ensuring 
compensation 
reflects  the  royalties  that  would  have  been 
due  had 
infringer  sought  proper 
authorisation from the rights holder. 

framework 

that 

the 

for 

(65)  Paris 

2019, 
Appeal, 
https://www.legalis.net/jurisprudences/cour-dappel-

22 January 

Court 

of 

In certain cases, courts may apply 
multiple methods for calculating 
damages, such as lost profits and 
reasonable royalties. The choice of 
method often depends on the type 
of injured party. For instance, 
rights management organisations 
typically derive their income from 
licensing fees and royalties, so 
courts may calculate their losses 
based on these factors. 

the 

appropriate 

In such cases, the courts rely heavily on the 
evidence  submitted  by  the  parties  to 
level  of 
determine 
compensation.  However,  as  illustrated  by 
the  Swedish  case,  this  evidence  must  be 
carefully 
avoid 
overcompensation. Courts must balance the 
need  to  fairly  compensate  rights  holders 
with  the  risk  of  awarding  damages  that 
exceed the actual economic harm caused by 
the infringement. 

evaluated 

to 

involving 

in  a  case 

In  other  cases,  courts  select  the  method  of 
calculating damages based on the nature of 
the injured party claiming the damages. For 
instance, 
illegal 
downloading  of  copyright-protected  works, 
a French appellate court used the lost profit 
method  to  calculate  damages  for  the  rights 
holders,  while  employing  the  reasonable 
royalty  method  for  associations  managing 
collective copyrights (65). 

the 

relied  on 

In this case, the court, similar to the Swedish 
approach, 
calculations 
provided  by  the  injured  parties.  The  court 
carefully  evaluated  the  submissions  from 
three  collective  management  associations. 
requested 
these  associations 
Two  of 
compensation of EUR 0.072 per downloaded 
cinematographic  work  and  EUR 0.706  per 
downloaded  music  album.  The  court  found 
these  calculations  justified,  as  they  were 

de-paris-pole-5-ch-14-arret-du-22-janvier-2019. 

39 

 
 
 
                                                             
Calculation of Damages in Criminal IP Cases 

based  on  an  analysis  of  distribution 
contracts  with  film  producers,  and  thus 
granted the requested damages. 

However,  the  third  association  requested  a 
compensation  of  EUR 2  per  download, 
merely  citing  previous  court  decisions  as 
justification.  Although  prior  rulings  can  be 
considered  as  part  of  the  assessment,  they 
cannot  replace  an  objective  analysis  of  the 
lost profit. The association failed to provide 
any substantial basis for its calculation, such 
as distribution contract analysis or economic 
studies  demonstrating  the  loss  of  revenue. 
Despite  this,  the  court  acknowledged  the 
to  seek 
association’s 
damages.  Consequently,  the  court  set  the 
loss of profit at EUR 0.20 per download. 

legitimate 

right 

in  meticulously  evaluating 

This  case  underscores  the  crucial  role  of 
courts 
the 
evidence  and  methodologies  presented  by 
injured  parties.  It  highlights  the  judiciary’s 
duty to ensure that damage calculations are 
based  on  objective  and  substantiated 
analyses,  rather  than  relying  solely  on 
claims. 
precedent  or  unsubstantiated 
Additionally,  it  demonstrates  that  courts 
generally  acknowledge  the  right  of  injured 
parties 
in  criminal 
proceedings. Even when injured parties fail 
to provide sufficient evidence to justify their 
claims, 
assess  what 
actively 
constitutes  reasonable  royalties  within  the 
specific case. 

to  claim  damages 

courts 

In  this  process,  courts  often  estimate  the 
amount of royalties based on what would be 
considered fair compensation, balancing the 
need  to  avoid  overcompensation  while 
ensuring that rights holders are adequately 
compensated  for  their  losses.  This  active 
judicial  involvement  ensures  that  damage 
awards are both equitable and justifiable in 
industry 
the  economic  realities  of  the 
involved. 

40 

 
 
 
 
 
Calculation of Damages in Criminal IP Cases 

Non-pecuniary (moral) damages 

Most of the time, damages are evaluated by 
monetary  compensation,  which  evaluates 
very  specific  loss  of  profit  or  reputation. 
However, recently some courts have started 
for  non-
to  also  award  compensation 
IP 
in 
pecuniary  or  moral  damages 
infringement  cases.  Legislation  in  some 
countries  specifically  indicates  that  civil 
claims in criminal proceedings can be filed in 
relation 
to  both  pecuniary  and  non-
pecuniary  damages.  Examples  of  such 
legislation are the Criminal Procedure Codes 
of  Czechia  (Article 43),  Greece  (Article 63), 
Latvia  (Article 351),  Lithuania  (Article 109) 
and Romania (Article 19), the Criminal Code 
of  Italy  (Article 185)  and  the  Intellectual 
Property  Code  of  France  (Article 331-1-
3) (66). 

This is also in line with CJEU practice, which 
recognised  that  both  economic  and  moral 
prejudice  to  the  rights  holders  must  be 
considered  by 
the  national  courts (67). 
Additionally,  the  European  Commission 
recommendation  on  measures  to  combat 
counterfeiting  and  improve  enforcement  of 
that 
intellectual  property  rights  notes 
damages  are  often  not  appropriate  to 
remedy the actual prejudice suffered by the 
rights  holder (68).  As  stated  by  the  CJEU  in 
Case  C-99/15,  moral  prejudice,  such  as 
damage to the reputation of the author of a 
work, constitutes, provided that it is proven, 
a  component  of  the  prejudice  actually 
suffered  by  the  rights  holder (69).  For  this 
reason,  the  Commission  encourages  the 
Member  States  to  ensure  that  the  rights 
holders can receive damages appropriate to 

compensate  for  the  actual  prejudice  cause, 
using a method of calculating damages that 
addresses  all  aspects  of 
the  suffered 
prejudice,  including  (a)  damages  covering 
moral  damage,  (b)  damages  covering  costs 
that  are 
researching  and 
to 
identifying  possible  acts  of  infringement, 
and  (c)  damages  covering  payment  of 
interest of sums due. 

linked 

Criminal  courts,  with  some  exceptions,  still 
tend  to  concentrate  on  pecuniary  damages 
because 
the  determination  of  moral 
damages is often very complex and difficult. 
However, recently, there is a shift in national 
court practices. In a recent criminal case on 

In many IP cases, pecuniary 
damages alone do not fully 
address the harm suffered by 
rights holders 

Brands frequently experience damage to their 
reputation,  which  they  have  built  over  long 
periods and through significant investment. IP 
right  infringement  can  erode  customer  trust 
over 
time,  diverting  clients  away  from 
legitimate  products.  Additionally,  brands 
often  incur  substantial  costs  in  investigating 
rights violations and restoring their damaged 
reputations. This non-pecuniary harm can be 
just  as  detrimental  as  the  financial  loss, 
requiring courts to consider a broader range of 
factors  when 
adequate 
compensation. 

determining 

(67) 

(66)  The national legislation on intellectual property crimes 
can  be  accessed  at  the  IPC  Project’s  country  fiches: 
https://www.eurojust.europa.eu/country-fiches-list. 
Judgment  of  the  Court  of  Justice  of  17 March  2016, 
Christian  Liffers  v  Producciones  Mandarina  SL  and 
Mediaset  España  Comunicación  SA,  anciennement 
Gestevisión 
C-99/15, 
ECLI:EU:C:2016:173,  https://eur-lex.europa.eu/legal-
content/en/TXT/?uri=CELEX:62015CJ0099. 

Telecinco 

Case 

SA, 

(68)  Commission 

recommendation  of  19.3.2024  on 
measures  to  combat  counterfeiting  and  enhance  the 
rights, 
intellectual 
enforcement 

property 

of 

(69) 

C(2024) 1739  final,  paragraph  26,  https://single-
market-
economy.ec.europa.eu/publications/commission-
recommendation-measures-combat-counterfeiting-
and-enhance-enforcement-intellectual_en. 
Judgment  of  the  Court  of  Justice  of  17 March  2016, 
Christian  Liffers  v  Producciones  Mandarina  SL  and 
Mediaset  España  Comunicación  SA,  anciennement 
C-99/15, 
Gestevisión 
ECLI:EU:C:2016:173,  https://eur-lex.europa.eu/legal-
content/en/TXT/?uri=CELEX:62015CJ0099. 

Telecinco 

Case 

SA, 

41 

 
 
 
 
                                                             
Calculation of Damages in Criminal IP Cases 

trademark  violations,  the  Spanish  Supreme 
Court  recognised  that  the  injured  parties 
have  a  right  to  compensation  for  moral 
damage.  The  court  indicated  that  the  very 
exhibition  for  sale  of  the  products  that 
infringe  trademark  rights  by  imitation  or 
confusion of their distinctive signs results in 
implicit  moral  damage  that  does  not  need 
further  proof (70).  The 
further 
indicated that it is difficult, if not impossible, 
to  convert  moral  damages 
into  direct 
financial damage and calculate it in terms of 
lost  profit.  Nevertheless,  despite 
the 
difficulty  of  calculation,  moral  damages 
cannot  be  excluded  from  the  assessment. 
This  decision  is  in  line  with  EU  legislation 
and CJEU practice (71). 

court 

French  courts  took  a  similar  approach  in  a 
copyright  violation  case,  where  the  French 
indicated  that  national 
appellate  court 
legislation  clearly 
indicates  that  moral 
damages need to considered when assessing 
damages suffered by the injured parties (72). 
The court  went  on  to  indicate  that  it  is  not 
possible to assess the moral damages caused 
by illegal streaming; however, the mere fact 
that the copyright violation has been proved 
is sufficient to prove that the rights holders 
suffered moral damages. 

The mere fact of the violation of IP 
rights is sufficient to conclude that 
the rights holders suffered moral 
damages.  

Non-pecuniary damages in IP violation cases 
could  be  very  broad.  The  above-mentioned 
decision  of  the  Spanish  Supreme  Court 

(70)  Spanish  Supreme  Court,  Case  No.  STS  611/2023, 
13 June 2023, https://vlex.es/vid/939916136. 
(71)  Spanish  Supreme  Court,  Case  No.  STS  611/2023, 
13 June 2023, https://vlex.es/vid/939916136. 
(72)  Court  of  Appeals  of  Paris,  22 January  2019, 
https://www.legalis.net/jurisprudences/cour-dappel-
de-paris-pole-5-ch-14-arret-du-22-janvier-2019. 
Judgment  of  the  Court  of  Justice  of  18 June  2009, 
L'Oréal  SA,  Lancôme  parfums  et  beauté  &  Cie  SNC  and 
Laboratoire  Garnier  &  Cie  v  Bellure  NV,  Malaika 
Investments Ltd and Starion International Ltd., Case C-
https://eur-
487/07, 

ECLI:EU:C:2009:378, 

(73) 

the 

indicated that IP violations cause significant 
reputational  damage  to  the  rights  holder, 
affecting 
reputation  of  protected 
trademarks, whose distinctive signs are used 
to sell products at a much lower price than 
those protected by the original signs. It also 
compromised,  even  indirectly  or  diffusely, 
the  intangible  elements  of  exclusivity  and 
commitment  to  quality  that  trademarks 
intend to transmit to consumers as a whole. 
The  Spanish  court  relied  on  CJEU  practice, 
where the infringement of trademark rights, 
in addition to seeking an unfair advantage of 
the distinctive character or reputation of the 
trademark  with  economic  value,  also 
compromises  the  element  of  trust  that  are 
intended  to  transmit  to  consumers.  These 
elements  include  the  promise  or  guarantee 
of a certain quality, a specific image related 
to  a  certain  lifestyle  or  exclusivity  of  its 
use (73). 

To determine the moral damages in this case, 
the Spanish court estimated them to be 25 % 
of  the  potential  profit  the  injured  parties 
would  have  earned  if  the  criminal  offense 
had  not  occurred.  The  Spanish  Supreme 
Court confirmed this calculation, stating that 
it  represents  a  reasonable  assessment  of 
various factors, ensuring that the damage to 
the  company’s  reputation  is  compensated 
without 
in  excessive  over-
compensation. 

resulting 

French  court  practice  emphasises  that  the 
amount  of  moral  damages  should  be 
determined  based  on 
evidence 
injured  parties.  This 
submitted  by  the 
amount  must  be  precise  and  well-justified; 
judges  cannot  award  a  lump  sum  without 
sufficient  proof  of  the  alleged  non-material 

the 

lex.europa.eu/legal-
content/en/TXT/?uri=CELEX:62007CJ0487; Judgment 
of the Court of Justice of 23 March 2010, Google France 
SARL  and  Google  Inc.  v  Louis  Vuitton  Malletier  SA  (C-
236/08), Google France SARL v Viaticum SA and Luteciel 
SARL  (C-237/08)  and  Google  France  SARL  v  Centre 
national  de  recherche  en  relations  humaines  (CNRRH) 
SARL  and  Others 
(C-238/08),  Case  C-236-08, 
ECLI:EU:C:2010:159,  https://eur-lex.europa.eu/legal-
content/en/TXT/?uri=CELEX:62008CJ0236. 

42 

 
 
 
                                                             
Calculation of Damages in Criminal IP Cases 

In France, civil law principles on 
damage calculation are applied 
equally in criminal cases. 

A factsheet issued by the Paris Court of Appeals 
outlines  that  moral  damages  encompass  two 
key aspects. 

01 

02 

External  damages.  These  affect 
the company’s image or reputation, 
such as through denigration, and its 
honour  when  it  embodies  values 
spiritual, 
(professional, 
that 
philosophical,  or  political) 
constitute its identity. 

 Internal damages. These result in a 
in  morale 
general  deterioration 
within  the  company  and  a  loss  of 
confidence 
its  future,  often 
evidenced  by  increased  departures 
or  a  lack  of  interest  from  potential 
recruits. 

in 

La  réparation  du  préjudice 
économique 

Fiches  méthodologiques  et 
glossaire – 3e édition (2024) 

loss. Injured parties are required to provide 
comprehensive  documentation  to  support 
their claims.  

By  requiring  detailed  and  substantiated 
evidence,  the  French  courts  ensure  that 
compensation  for  moral  damages  is  fair, 
accurate  and  reflective  of  the  actual  harm 
injured  parties.  This 
suffered  by 
meticulous  approach  helps  maintain  the 
integrity  of  the  compensation  process  and 
ensures  that  damages  awarded  are  both 

the 

justified  and  proportional  to  the  harm 
incurred. 

Damage  to  a  trademark’s  reputation  as 
moral  damage  has  also  been  recognised  by 
other courts. In case No II AKA 382/10, the 
Court of Appeals in Katowice stated that the 
effects  on  the  market  caused  by  trademark 
infringement  are  characterised  as  damage 
consisting  of  multiple  components,  such  as 
damage  to  the  rights  holder’s  reputation, 
customer  confusion  and  the  creation  of  a 
state  of  uncertainty  in  the  market.  As  a 
result,  the  brand’s  reputation  and  image 
suffer,  as  does  the  recognition  of  the 
trademark  and  the  demand  for  goods 
bearing that name (74). 

This  practice  shows  that  non-pecuniary 
damage  in  IP  can  be  understood  in  a  very 
broad  manner.  In  general  terms,  it  mainly 
relates  to  the  reputational  damage  of  the 
their  brand.  The 
rights  holder  and 
reputational  damage  includes  the  following 
elements: 

- 

-  damage  to  the  distinctive  character 
of the brand and the quality it offers 
with the specific name and brand; 
compromise to the guarantee of high 
quality  and  exclusivity  related  to  a 
certain name; 
customer 
and 
compromises  to  elements  of  trust 
that  a  certain  name  brings  with  the 
product; 
creation  of  uncertainty 
market. 

confusion 

the 

in 

- 

- 

The evolving recognition of moral damages 
in IP infringement cases signifies a broader 
understanding  of  the  harm  caused  by  such 
violations.  While  economic  damages  are 
relatively  straightforward 
to  calculate, 
moral  damages  present  a  more  complex 
challenge, often involving intangible aspects 
like  reputational  harm  and  consumer  trust. 
Despite these difficulties, the trend towards 

(74)  Court of Appeals of Katowice, Case No. II AKa 382/10, 
2011, 

5 January 
https://orzeczenia.katowice.sa.gov.pl/content/$N/15

1500000001006_II_AKa_000382_2010_Uz_2011-01-
05_001. 

43 

 
 
 
                                                             
 
Calculation of Damages in Criminal IP Cases 

acknowledging and compensating for moral 
damages aligns with a more comprehensive 
approach to justice, ensuring that the rights 
holders receive full restitution for all forms 
of  prejudice  suffered.  While  some  courts 
require  a  precise  calculation  of  moral 
damages based on the documents submitted 
by  the  injured  parties,  such  calculations 
often  necessitate  in-depth  knowledge  of 
economic  processes.  Consequently,  courts 
frequently opt to award moral damages as a 
lump sum, typically contingent on a specific 
request from the injured party. 

What documentation can injured parties submit in a criminal case to prove 
that they suffered moral damages? 

01 

Market  and  brand-awareness 
studies 

05 

Market analyses and changes in 
market share 

02 

press 

cuttings 

Dated 
to 
establish the brand’s or model’s 
reputation  and  demonstrate 
investments made 

03 

Opinion 
claimant’s customers 

surveys 

of 

the 

04 

A  certified  promotional  and 
advertising  budget,  including 
marketing  and  promotional 
costs to remedy the damage 

06 

07 

08 

Internal  additional  costs 
to 
address  the  loss  of  employee 
confidence 

Licenses granted 

Other similar documents 

44 

 
 
 
 
 
 
Calculation of Damages in Criminal IP Cases 

Lump sum or predetermined 
damages 

in 

to 

are 

The  standard  practice  is  that  damages  in 
criminal  IP  cases  should be  awarded  based 
on a detailed calculation of the loss suffered 
by  the  injured  parties  due  to  the  criminal 
acts.  This  approach  ensures  that  rights 
compensated 
holders 
reasonably 
unreasonable 
without 
leading 
some 
overcompensation.  However, 
instances, the calculation of damages cannot 
be  determined  solely  based  on 
the 
documents  and  evidence  provided  by  the 
injured parties. In such cases, criminal courts 
may choose to refer the civil claim to a civil 
court,  as  the  calculation  of  damages  might 
unreasonably burden the court and prolong 
the  criminal  proceedings.  Alternatively,  in 
some  jurisdictions,  courts  may  resort  to 
awarding  a  lump  sum  as  compensation  to 
the injured parties. 

for 

The  option  to  award  a  lump  sum  as  an 
alternative  method 
compensating 
damages  is  also  recognised  in  Article 13  of 
the  enforcement  directive.  This  article 
indicates  that  a  lump  sum  can  be  awarded 
if  the 
based  on  hypothetical  royalties 
infringer  had  legally  used  the  IP.  While  the 
enforcement  directive  is  not  applicable  in 
criminal proceedings, EU courts tend to rely 
on the principles set in the directive for the 
calculation of damages in criminal cases. In 
this  regard,  some  courts  recognise  the 
option to award a lump sum when a precise 
calculation of damages is not possible (75). 

The  lump  sum  is  widely  used  by  Polish 
courts  to  compensate  for  damages.  This 
practice  follows  provisions  in  Article 46  of 
the  Polish  Criminal  Code,  which  indicates 
that 
is 
significantly  difficult,  the  court  can  award 
compensation  to  the  injured  party  of  up  to 

if  the  calculation  of  damages 

(75)  See,  for  example,  Nessebar  District  Court,  Case 
2023, 

26 September 

No 246/2023, 
https://dela.bg/Acts/64c61f48-8773-44a5-a0e3-
647a605b7a00. 
of 

Criminal 
https://sip.lex.pl/akty-prawne/dzu-dziennik-

Polish 

the 

(76)  Article 46 

Code, 

A lump sum is usually awarded as 
an alternative means if the 
calculation of damages is very 
difficult or impossible based on 
the documents in the case file.  

PLN 200 000 
EUR 46 000) (76). 

(approximately 

The Polish courts generally indicate that the 
precise calculation of damages in criminal IP 
cases  is  a  very  complex  task  that  often 
cannot  be  determined  accurately.  Despite 
that 
this  complexity,  courts  recognise 
injured  parties  are 
to 
compensation for the harmful effects of the 
criminal offense. 

still  entitled 

In a case concerning the sale of low-quality 
counterfeit goods, the Polish court indicated 
that the nature of the clients who purchased 
low-quality  counterfeit  goods  showed  they 
most  likely  would  not  purchase  original 
luxury  goods (77).  Thus, it  is  not  possible  to 
conclude that luxury brands lost clients due 
to this criminal offense. 

Despite  this,  the  court  indicated  that  the 
brand still suffered damage to its reputation 
and  often  had  to  invest  more  in  detecting 
counterfeit  goods  or  advertising  to  reverse 
the damage to their reputation. As it is nearly 
impossible to calculate the exact amount of 
this damage, the court relied heavily on the 
analysis of the effects of the perpetrator’s act 
on the image of the injured party, taking into 
account  the  low  income  generated  by  the 
perpetrator  in  this  case.  Considering  all 
these  circumstances,  the  court  concluded 

ustaw/kodeks-karny-16798683/art-46. 

(77)  District Court in Jelenia Góra, Case No 96/15, 31 March 
https://orzeczenia.jelenia-
2015, 
gora.so.gov.pl/content/$N/155005000003006_VI_Ka_
000096_2015_Uz_2015-03-31_002. 

45 

 
 
 
 
                                                             
Calculation of Damages in Criminal IP Cases 

that  damages  of  PLN 2 000  (approximately 
EUR 465) would be adequate. 

works 

involving 

Another  example  is  Article L331-1-3  of  the 
French  Intellectual  Property  Code,  which 
indicates that a court may, as an alternative 
and  at  the  request  of  the  injured  party, 
award  a  lump  sum  for  damages (78).  The 
French  court  applied  this  provision  in  a 
copyright  violation  case 
the 
unauthorised  availability  of  thousands  of 
for 
copyright-protected 
download (79).  The  court  considered  that  it 
was  impossible  to  determine  the  precise 
number  of  protected  works  made  available 
online,  which  would  not  allow  for  an 
accurate calculation of the loss of profit. For 
this  reason,  the  court  decided  to  grant  a 
lump  sum  of  EUR 20 000  as  a  means  of 
compensation. In deciding on the amount of 
into 
compensation, 
consideration 
of 
subscribers  (4 715),  the  website’s  profit 
(EUR 98 616)  and  the  fact  that  users  were 
downloading  both  musical  and  audiovisual 
works. 

took 
number 

court 
total 

the 
the 

The  Court  of  Cassation  affirmed 
the 
conclusions  of  the  lower  court  in  this  case, 
accepting the awarding of a lump sum to the 
injured parties (80). This shows that even if it 
is impossible to apply a precise formula for 
calculation of damages, the court can still use 
the elements that have been confirmed in the 
case and determine the approximate damage 
suffered by the rights holders. 

Despite this, awarding a lump sum cannot be 
used  by  the  courts  as  an  easy  way  out  of 
calculating  an  often  complex  compensation 
scheme.  An  example  of  this  situation  is  the 
decision  of  the  French  Court  of  Cassation, 
which annulled the decision of a lower court 
and  sent  it  back  to  the  appellate  court, 
indicating  that  awarding  a  lump  sum  is 

What are the conditions to 
award a lump sum? 

01 

02 

03 

04 

The possibility to award a lump 
sum  is  generally  set  in  national 
legislation. 

As an alternative, this possibility 
could also be set in the previous 
court practice.  

starting  point 

the 
is 
The 
assessment  of 
the  evidence 
submitted by the injured parties. 
The failure of the injured parties 
to  submit  any  evidence  cannot 
be  a  reason  to  award  the  lump 
sum.   

sum 

The  court  can  only  award  a 
the 
predetermined 
if 
evidence  submitted  by 
the 
injured  parties is insufficient  to 
determine  precise  damages 
based on other methods, such as 
reasonable 
loss 
royalties or moral damages.  

of  profit, 

When  deciding  the  amount  of 
the  lump sum,  the court should 
take  all  available  information 
into  consideration,  such  as  the 
type  of  customers  who  bought 
or  used 
illegal  services,  the 
number  of  customers,  the  price 
of  the  goods  or  services  and 
other available factors.  

(78)  Article L331-1-3  of  the  Intellectual  Property  Code, 
https://www.legifrance.gouv.fr/codes/article_lc/LEGI
ARTI000028716676. 

(79)  Court  of  Appeal  of  Colmar,  31 July  2017, 
https://www.legalis.net/jurisprudences/cour-dappel-
de-colmar-arret-du-31-mars-2017. 

(80)  Court of Cassation, Case No 17-83.539, 20 March 2018, 

https://www.courdecassation.fr/decision/5fca928d3
c023286830265cc?search_api_fulltext=SACEM+penal
&sort=&items_per_page=&judilibre_chambre=&judilib
re_type=&judilibre_matiere=&judilibre_publication=&
judilibre_solution=&op=&date_du=&date_au=&previo
usdecisionpage=0&previousdecisionindex=2&nextdec
isionpage=0&nextdecisionindex=4. 

46 

 
 
 
                                                             
Calculation of Damages in Criminal IP Cases 

based  on  evidence  are  preferred  to  ensure 
precise  and  fair  compensation,  practical 
challenges  often 
lead  courts  to  adopt 
alternative  methods.  Lump  sum  awards 
provide  a  viable  solution  when  precise 
calculations  are  not  feasible,  ensuring  that 
rights  holders  receive  compensation  for 
their  losses.  This  approach  is  supported  by 
both  national 
legislation  and  principles 
derived  from  the  enforcement  directive, 
highlighting  the  flexibility  of  courts 
in 
IP 
addressing 
infringement  cases.  Despite  this  flexibility, 
courts  still  need  to  carefully  assess  all  the 
circumstances in each case and ensure that 
the awarded lump sum is well-justified and 
does not lead to unfair enrichment. 

complexities 

the 

of 

lump  sums  to 

considered  only  as  an  alternative  method 
and can be applied only when other methods 
cannot  lead  to  a  reasonable  conclusion (81). 
In this case, which concerned the production 
and  sale  of  counterfeit  pharmaceutical 
products,  the  appellate  court  awarded 
various 
injured  parties, 
ranging  from  EUR 45 000  to  EUR 10 000. 
The  appellate  court  indicated  that  these 
sums were based on the damage to the image 
of the trademark and the reduced sales of the 
original  goods  due  to  the  depreciation  of 
these  trademarks  associated  by  the  public 
with  the  quality  of  the  products  sold  in 
pharmacies and the reliability of the advice 
provided  by  pharmacists.  The  Court  of 
Cassation  found  that  the  appellate  court 
failed to evaluate the loss of earnings of the 
injured  parties,  who  did  not  provide 
evidence of the products they sell or how the 
sale  of  the  counterfeit  goods  affected  their 
profits. Consequently, the Court of Cassation 
concluded  that  the  appellate  court failed  to 
consider  the  primary  elements  of  negative 
economic  consequences,  including  the  loss 
of  profit  suffered  by  the  injured  party,  the 
profits made by the infringer and the moral 
damage. The court could only have awarded 
the  lump  sum  when  these  elements  were 
evaluated. 

Thus, a lump sum can be awarded only as an 
alternative  when  other  methods  do  not 
allow  the  court  to  determine  the  damages, 
and  such  a  court  decision  must  be  well- 
justified. Even if the court chooses to award 
a lump sum, it must still largely be based on 
the submissions of the parties and fall within 
the  limits  of  what  the  injured  parties  are 
requesting  to  avoid  any  potential  unjust 
enrichment. Failure of the parties to provide 
any  evidence  of  their  damage  cannot  be  a 
reason  to  award  the  compensation  in  the 
form of the lump sum. 

In conclusion, the calculation of damages in 
criminal  IP cases  varies  significantly  across 
jurisdictions.  While  detailed  calculations 

(81)  Court  of  Cassation,  Case  No 17-87.485,  26 June  2019, 

https://www.lexbase.fr/article-juridique/52260634-
breves-contrefacon-de-marque-fixation-des-

dommages-interets-alloues-a-la-partie-civile-par-le-
juge. 

47 

 
 
 
                                                             
Calculation of Damages in Criminal IP Cases 

5 

Conclusions 

The  calculation  of  damages  in  criminal  IP 
cases is marked by significant variability and 
complexity  across  jurisdictions. This  report 
has explored how different courts approach 
the  challenge  of  quantifying  damages, 
whether 
economic 
analysis, the awarding of lump sums or the 
assessment  of  reasonable  royalties. 
It 
demonstrates  that  the  absence  of  uniform 
and  clear  guidance  on  how  to  address  the 
damages  leads  to  very  diverse  approaches 
by each country and each court. 

detailed 

through 

A  prevalent  method  involves  calculating 
damages based on the potential lost profits 
of 
the  rights  holders,  which  ensures 
compensation  is  closely  tied  to  the  actual 
economic  impact  of  the  infringement.  This 
approach is often preferred for its precision, 
but  requires  substantial  evidence  and 
in 
thorough  economic  analysis.  Courts 
France  and  Sweden  have  demonstrated  a 
very  precise  formula  on  how  damages  are 
calculated  in  copyright  infringement  cases, 
both  in  illegal  downloading  and  streaming 
cases. As the cases of illegal IPTV services are 
currently  increasing,  this  formula  might 
serve as an important basis for many courts 
in  how  to  determine  the  loss  for  decoding 
and  illegally  streaming  subscriber-based 
services. 

The  calculation  of  damages  is  much  more 
complex in counterfeiting cases. Courts often 
struggle with elements such as whether the 
price of the original goods could be used as a 
basis  or  how  to  determine  damages  if  the 
counterfeit  goods  have  not  reached  the 
market. There is no uniform formula on how 
to  calculate  lost  profit  in  counterfeit  cases; 
however, most of the examples illustrated in 
this report show that the courts often look at 
other  factors –  particularly  how  much  the 
perpetrator  earned  from  the  illegal  sale  of 
the  goods.  This  can  help  the  courts  to 

determine  whether  the  customer  buying 
illegal  luxury  goods  would  have  actually 
bought  original  goods.  In  that  sense,  US 
practice  uses  the  formula  that  the  price  of 
the original goods can be used as a baseline 
for  the  compensation  of  damage  only  in 
cases when the retail price of the counterfeit 
items  is  not  less  than  75 %  of  the  original 
goods’ price. This shows that in counterfeit 
cases,  it  is  important  to  assess  several 
elements and look into the case as a whole to 
determine  reasonable  compensation  that 
would not lead to unjust overcompensation. 

Another method to calculate damages is the 
estimation of potential royalties or licensing 
fees  that  would  have  been  due  if  the 
perpetrator  had  an  appropriate  licensing 
agreement.  The  Swedish  courts  indicated 
that  this  method  should  prevail  over  the 
method of lost profit as it offers more precise 
and reasonable compensation. To determine 
the  hypothetical  royalties,  the  court  looked 
into  royalties  generally  applied  in  that 
the 
particular 
percentage from the potential profits of the 
injured 
that 
determination of potential royalties can still 
be a very complex task. 

industry  and  estimated 

parties. 

shows 

This 

Courts  often  recognise  that  it  is  almost 
impossible  to  calculate  precise  damages  in 
criminal IP right cases. However, this cannot 
lead  to  the  decision  not  to  award  any 
compensation.  Polish 
courts  generally 
recognise  that  even  if  it  is  difficult  to 
determine  the  amount  of  damage,  the  fact 
that  the  damage  was  done  by  the  crime  of 
counterfeiting is unquestionable. These acts 
its 
cause  damage 
reputation,  often  requiring  the  brands  to 
invest  considerably  to  detect  counterfeits 
and  to  promote  their  image  in  order  to 
reverse  the  negative  effects  of  the  crime. 
This  moral  damage  often  cannot  be 

the  brand  and 

to 

48 

 
 
 
 
Calculation of Damages in Criminal IP Cases 

calculated based on the lost profit, thus the 
courts often resort to awarding a lump sum 
as a compensation. 

Awarding  a  lump  sum  as  an  alternative  is 
recognised  in  several  jurisdictions.  This 
method,  though  less  precise,  provides  a 
pragmatic  solution  when  the  complexity  of 
the case or lack of detailed evidence makes 
exact calculations unfeasible.  However, this 
method  still  needs  to  be  based  on  the 
evidence submitted by the parties and have 
justified reasoning. The Court of Cassation in 
France  highlighted  that  awarding  a  lump 
sum  has  to  be  a  last  resort  measure  and 
cannot  be  used  in  cases  where  the  injured 
parties  fail  to  justify  their  request  for 
compensation. 

The report also highlighted the influence of 
EU  directives,  such  as  the  enforcement 
directive,  which,  while  primarily  applicable 
to civil cases, offer principles that can guide 
criminal  proceedings.  The  enforcement 
directive  supports  the  use  of  hypothetical 
royalties  as  a  basis  for  lump  sum  awards, 
in 
reinforcing 
addressing  the  nuances  of  IP  infringement 
cases. 

flexibility 

courts’ 

the 

in 

judicial 
the  diversity 
Ultimately, 
approaches underscores the importance of a 
tailored,  case-by-case  evaluation  to  ensure 
fair and just compensation for rights holders. 
Courts  must  carefully  balance  the  need  for 
reasonable  compensation  with  the  risk  of 
unjust  enrichment,  drawing  on  both  legal 
frameworks  and  economic  realities.  This 
nuanced  approach  helps  maintain 
the 
integrity  of  IP  rights  while  fostering  a  fair 
and equitable legal environment.

49 

 
 
 
Calculation of Damages in Criminal IP Cases 

Annex 

Legal provisions on civil claims in criminal proceedings in EU Member States 

Country 

Civil claim 
in criminal 
case 

Austria 

Yes 

Belgium 

Bulgaria 

Croatia 

Cyprus 

Czechia 

Denmark 

Estonia 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Legal provisions 

Comment 

Article 67 of the 
Criminal Procedure 
Code 

Article 4 of the 
Criminal Procedure 
Code 

Article 84(1) of the 
Criminal Procedure 
Code 

Article 153 of the 
Criminal Procedure 
Code 

Article 43 of the 
Criminal Procedure 
Code  

Chapter 88 of the 
Executive Order on 
the Administration of 
Justice Act 

Section 225 of the 
Criminal Procedure 
Code 

The IP crime is subject to private prosecution; such  a criminal 
offence is not covered by public prosecution unless the IP crime 
charges are part of other criminal charges. 

The  civil  party  may  also  choose  to  file  the  claim  for  damages 
before  civil  court.  In  this  case,  the  civil  procedure  shall  be 
suspended  until  the  criminal  trial  is  completed  to  avoid 
contradictions between civil and criminal procedures (Article 4 
of the Criminal Procedure Code). 

The Criminal Court can refuse to adjudicate the civil claim. This 
refusal is not subject to appeal. In this case, the injured party can 
refer  the  claim  to  the  civil  court  (Article 88(1)  of  the  Criminal 
Procedure Code).   

A civil claim can be brought before criminal court only if it does 
not  significantly  delay  criminal  proceedings.  The  court  may 
dismiss  the  civil  claim  if  there  is  not  enough  information  to 
decide on the damages, if the defendant is acquitted or changes 
are dismissed (Article 158 of the Criminal Procedure Code). 

While the criminal court has the jurisdiction to award a limited 
amount of compensation to the victim of a crime, in practice this 
jurisdiction is rarely used and has not been seen at all in recent 
decades.  

If there is no basis to award the damages based on the gathered 
evidence,  and  it  is  necessary  to  gather  additional  evidence  to 
decide  the  civil  claim  which  could  prolong  the  criminal 
proceedings,  the  court  can  refer  the  case  to  a  civil  court.  This 
decision  cannot  be  appealed  (Article 229  of  the  Criminal 
Procedure Code). 

The  court  may  at  any  time  during  the  criminal  proceedings 
refuse to pursue a civil claim if it finds that considering it during 
the criminal proceedings cannot take place without significant 
inconvenience. 

The  civil  action  can  be  dismissed  if  the  criminal  case  is 
terminated or a conviction is made. Civil action can be dismissed 
even if the case ended up with a conviction if it is not possible to 
hear it without a victim who did not appear before the court or 
if the civil action does not have grounds. 

Finland 

Yes 

Chapter 3 of the Code 
of Criminal Procedure 

The  court  rejects  the  claim  for  compensation  if  insufficient 
evidence is submitted to support it. 

50 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Calculation of Damages in Criminal IP Cases 

Country 

France 

Civil claim 
in criminal 
case 

Yes 

Germany 

Yes 

Greece 

Yes 

Hungary 

Yes 

Ireland 

Yes 

Italy 

Yes 

Legal provisions 

Comment 

Article 2 of the 
Criminal Procedure 
Code 

Section 403 of the 
Criminal Procedure 
Code 

Article 63, 82 and 83 
of the Criminal 
Procedure Code 

The injured party must request the court to be recognised as a 
civil party to the criminal proceedings. The court issues a ruling 
on  the  request,  which  can  be  denied  if  the  request  for 
compensation is not related to the criminal offence (Section I of 
the Criminal Procedure Code). 

This procedure is called adhesion procedure and requires a very 
precise calculation of the financial loss. 

The court can dismiss the claim if the criminal proceedings are 
terminated,  or  if  the  claim  is  unfounded,  does  not  have  legal 
basis or is filed unlawfully. 

Article 556 of the 
Criminal Procedure Code 

Right of the victim to 
submit a civil claim – 
Article 51(1)(h) of the 
Criminal Procedure Code 

A  civil  claim  must  contain  an  indication  of  defendant  against 
whom the victim is bringing the civil claim, specific request – in 
particular the amount or  quantity  of the claim, right on which 
the  civil  claim  is  based,  supporting  facts  and  the  method  and 
place  of  execution  in  the  event  that  the  court  rules  on  the 
substance  of  the  civil  claim  (Article 556  of  the  Criminal 
Procedure Code). 

Section 6 of the 
Criminal Justice Act 
Order 33 –  
Compensation Orders 

Article 185 of the 
Criminal Code 

Articles 74–89 of the 
Code of Criminal 
Procedure 

The court in a criminal case may issue a compensation order to 
pay  damages  to  the  injured  party  resulting  from  the  criminal 
offence. 

The court might either decide on a civil claim or to merely make 
a finding that there is a right to damages and refer the parties to 
the civil courts in order to determine the amount owed. In case 
the  injured  party  chooses  to  bring  the  claim  before  the  civil 
court,  this  claim  might  be  transferred  to  the  criminal 
proceedings  at  any  time  and  civil  proceedings  suspended 
(Article 75 of the Code of Criminal Procedure). 

Latvia 

Yes 

Article 351 of the 
Criminal Procedure 
Code 

If the court issues a judgement of acquittal, the claim of damages 
is not examined. In this case, the claim can be submitted before 
a civil court. 

Lithuania 

Yes 

Article 109 of the 
Criminal Procedure 
Code 

A civil claim is not examined if the accused is acquitted or if the 
civil claimant or their representative does not attend the court 
hearing.  In  such  cases,  the  civil  claimant  is  entitled  to  bring  a 
claim in civil proceedings. In exceptional cases, where it is not 
possible to precisely quantify the amount to be awarded because 
additional material is needed, the court may recognise the civil 
claimant’s right to have their claim satisfied when handing down 
a  conviction  and  transfer  consideration  of  the  amount  of  the 
claim to civil proceedings. 

Luxembourg 

Yes 

Articles 56–62 of the 
Code of Criminal 
Procedure 

The victim has to submit the claim before the investigating judge 
to  be  considered  as  an  injured  party.  This  complaint  will  be 
rejected  if  there  is  no  sufficient  linkage  between  the  alleged 
criminal offence and the damage incurred. 

Malta 

No 

Article 3(3) of the 
Criminal Code 

Every criminal offence gives rise to a criminal and civil action. A 
is  tried  before  the  civil  courts,  where  the 
civil  action 
compensation  for  damage  caused  by  the  criminal  offence  is 
thereby demanded. 

51 

 
 
 
 
 
 
 
 
Calculation of Damages in Criminal IP Cases 

Country 

Civil claim 
in criminal 
case 

Netherlands 

Yes 

Legal provisions 

Comment 

Article 51f of the 
Criminal Procedure 
Code 

Dutch  courts  generally  tend  to  refer  civil  claims  in  IP  cases  to 
civil  courts,  as  such  claims  would  place  a  disproportionate 
burden on criminal cases. 

Poland 

Yes 

Article 46 of the 
Criminal Code 

Portugal 

Yes 

Articles 71 and 72 of 
the Criminal Code 

In case of conviction and at the request of the victim, the court 
may decide on compensation of damages. In this case, the court 
applies civil law principles. The court can also award a lump sum 
in cases the calculation of damages is difficult. 

Portugal  uses  a principle  of  adhesion,  which  means  that  if  the 
injured party chooses to bring a civil claim based on the criminal 
offence, the claim must be brought up in the criminal proceeding 
and  can  be  brought  separately  before  civil  court  only  in  cases 
prescribed by the Criminal Code. 

Romania 

Yes 

Articles 19–29 of the 
Criminal Procedure 
Code 

In  its  claim,  the  civil  party  needs  to  indicate  the  nature  and 
extent of the claim as well as the reasons and evidence on which 
the claim is based (Article 20 of the Criminal Procedure Code). 

Slovakia 

Yes 

Article 46 of the 
Criminal Procedure 
Code 

The prosecutor has the right to request that injured parties be 
excluded from criminal proceedings if the following conditions 
are met: (a) there is a large number of injured parties (more than 
100);  and  (b)  the  participation  of  injured  parties  in  criminal 
proceedings  could  seriously  impair  the  purpose  and  rapid 
progression of the criminal prosecution. 

Slovenia 

Yes 

Articles 100–111 of 
the Slovenian Criminal 
Procedure Code 

The court assesses the civil claim only  if the offender is found 
guilty.  In  other  cases,  the  civil  claim  is  referred  before  a  civil 
court. 

Spain 

Yes 

Article 108 of the Law 
of Criminal Procedure 

Sweden 

Yes 

Article 54 of the 
Copyright Act 

Section 4 of the 
Trademark Act 

Civil action must be brought together with the criminal action by 
the  prosecutor,  regardless  of  whether  there  is  a  victim  in  the 
proceedings,  unless  the  injured  party  explicitly  waives  their 
right for compensation or reparation. 

The court can separate the civil claim from criminal proceedings. 
This  may  happen  when  the  claim  is  complex  or  not  prepared 
properly and might thus delay criminal proceedings. 

52 

 
 
 
 
 
 
Calculation of Damages in Criminal IP Cases 

Eurojust, Johan de Wittlaan 9, 2517 JR The Hague, The Netherlands 
www.eurojust.europa.eu • info@eurojust.europa.eu • +31 70 412 5000 
Follow Eurojust on X, LinkedIn and YouTube @Eurojust 

Catalogue number: QP-01-24-007-EN-N •  ISBN:   978-92-9404-369-6 • DOI: 10.2812/1154300 

53