Background

The claimants are a retailer and wholesaler of fencing products. The defendant also sells fencing products and operates approximately 17 miles from the claimants’ premises.

The dispute concerned 20 professionally produced images of fencing elements and finishes used by the claimants in marketing their products (the “claimants’ images”).

The claimants alleged that the defendant had used copies of the claimants’ Images on its own website to promote similar, competing fencing products. Just before the case management conference, the defendant admitted that the web developer it had engaged to create its website had used the claimants’ Images and admitted liability for copyright infringement.

However, the defendant did not admit that it had known about the infringement before being notified by the claimants’ solicitors, nor that the infringement was flagrant. It also disputed the quantum of any damages and the claimants’ entitlement to additional or exemplary damages.

Inquiry as to damages

The court set out to determine three principal issues:

1. whether the defendant and/or its admitted agent knew, or had reason to believe, that copyright subsisted in the claimants’ images;
2. the appropriate quantum of compensatory damages; and
3. whether additional damages should be awarded pursuant to section 97(2) of the Copyright, Designs and Patents Act 1988 (CDPA) and/or Regulation 3 of the Intellectual Property (Enforcement, etc.) Regulations 2006 and, if so, in what amount.

The court also had to assess the claimants’ costs of the liability phase, which the parties had been unable to agree.

The court’s approach

Knowledge of copyright 

The court rejected the defendant’s case that it and its agent did not know, and had no reason to believe, that copyright subsisted in the claimants’ Images.

The web developer had taken professionally produced marketing images depicting specific fencing elements from the website of a geographically nearby competitor and used them on the defendant’s website to promote directly competing products. They were not generic stock images.

A reasonable licence fee 

In assessing the reasonable licence fee, the court rejected both parties’ approaches. The claimants’ figure (50% of the cost of creating the images said to be approximately between £15,000 - £19,000 plus VAT) was too high for temporary, non-exclusive use, while the defendant’s reliance on CGI images costing approximately $3 each was of limited assistance without reliable evidence as to their nature, quality or licensing terms.

Instead, the court considered the parties’ commercial bargaining positions. The claimants would have been licensing professionally produced marketing material to a nearby direct competitor. Conversely, the defendant could have declined a licence and delayed its launch until its own images were available.

Taking into account the 20 images, their use for approximately 9-12 weeks, the commercial sensitivity of licensing them to a direct competitor and the value to the defendant of launching without delay, the court assessed a reasonable licence fee of £4,000 (approximately £200 per image).

Additional damages

The court also found the infringement flagrant for the purposes of section 97(2) CDPA. It rejected the suggestion that the images were placeholders accidentally left on the live website. The developer had deliberately used the images while knowing, or having reason to believe, that copyright subsisted in them, demonstrating at least a “couldn’t care less” attitude towards the claimants’ rights. Ultimately, using the images enabled the defendant to launch its competing business without waiting for its own equivalent images to be produced.

Balancing these factors against the relatively short period of use, prompt removal following notification and absence of proven additional sales or profits, the court awarded £3,000 in additional damages, producing a total damages award of £7,000.

Costs

The judgment also illustrates the importance of costs in relatively modest-value copyright claims. Subject to deductions which the claimants accepted ought not to have been included, the court summarily assessed the claimants’ costs of the liability phase at £13,704.50. The claimants were also entitled to their costs of the damages inquiry.

Conclusion

In determining a reasonable licence fee, the court looked beyond creation costs and the price of cheaper alternatives to consider what the parties would realistically have agreed, having regard to the nature and duration of the use and their competitive relationship.

The decision also demonstrates that the additional damages under section 97(2) CDPA are not limited to measurable sales or profits.

The practical lesson is clear: outsourcing website development does not necessarily outsource copyright risk. Here, a relatively short period of infringement resulted in £7,000 in damages, while the liability-stage costs alone were almost double the damages award.

Case details at a glance

Jurisdiction: England & Wales 
Decision level: IPEC
Parties: Charles And Ivy Ltd & Anor v Chelsea Supplies Ltd
Date: 09 October 2026
Citation: [2026] EWHC 2556 (IPEC)
Decision: https://dycip.com/2026-ewhc-2556-ipec