Airconco UK Limited v DC Air Condition and Refrigeration Limited

This High Court appeal came out of the IPEC Small Claims Track and focused on one practical question: how should damages be measured when a business copies a competitor’s website text? The infringement finding itself was not being challenged. The dispute was about value.

The court upheld an award based on a hypothetical licence fee rather than the lower cost of commissioning fresh, non-infringing copy. That matters for businesses because online marketing text is often treated casually, even though it can be protected intellectual property and can carry a real damages risk if copied.

Airconco and DC Air were rival businesses in the air conditioning sector. Airconco said DC Air copied substantial parts of text from Airconco’s website and used that wording on its own site to promote competing domestic air conditioning services. The district judge in the IPEC Small Claims Track agreed that copyright had been infringed.

Once infringement was established, the real commercial dispute became the price of that misuse. Airconco said the right measure was the fee it charged others to license the same text. DC Air said that approach overstated the value and that the court should instead look at what it would have cost to pay a professional copywriter to create lawful replacement wording.

Airconco produced evidence of advertised licence fees and licences granted to third parties. DC Air produced evidence from two copywriters with much lower estimates for creating equivalent text. The district judge preferred Airconco’s licensing model, adjusted the paragraph count to reflect some very short paragraphs, and calculated a figure above the claim cap, so damages were awarded at the maximum claimed amount of £10,000.

DC Air appealed on damages only. It also had to ask for relief from sanctions because its appeal notice was accepted 25 days late after a confusing sequence of filing rejections and contradictory court guidance. The judge granted relief, finding DC Air and its solicitors had acted reasonably.

The central issue was how to assess damages for copyright infringement where the copied material was website marketing text. More specifically, the court had to decide whether the district judge was entitled to use Airconco’s own licensing practice as the basis for a hypothetical licence fee, or whether she should instead have used a broader user-principle style assessment based on what it would cost to commission non-infringing text from copywriters.

That raised two linked questions. First, were Airconco’s past licences a reliable guide, given DC Air’s argument that many had been agreed under the pressure of litigation or threatened litigation? Second, if there was evidence of an established licensing rate, was the court still required to fall back on more general valuation evidence such as copywriter estimates? The appeal court approached those questions through the damages framework discussed in General Tire.

The court dismissed the appeal. It held that the district judge was entitled to assess damages using Airconco’s established licence rate for the text. The judge treated the second General Tire approach as the correct one on these facts: where the claimant has evidence of actual licensing practice, that can provide a firmer and more direct basis for estimating loss than a more general hypothetical valuation exercise.

The court accepted the principle that previous licences may be less useful if they were agreed in circumstances materially different from the hypothetical bargain the court must assume. But it did not accept that Airconco’s evidence should be discarded. The fact that some licences arose after litigation or threats of litigation did not automatically make them irrelevant.

The judge noted there was no evidence that those payers had challenged Airconco’s advertised rate as unfairly high, and there were also invoices not tied to actual or threatened litigation.

The court also rejected DC Air’s reliance on copywriter evidence. Since the second approach was available, the third, more general approach was not the right starting point. In any event, the two copywriters did not attend for cross-examination, so the district judge would have been entitled to give their evidence little or no weight.

The practical lesson is not just “do not copy”. It is also that the financial consequences may be measured in a way many businesses do not expect. A business owner might assume that if copied wording could have been rewritten cheaply, damages should be low. This case shows that assumption can fail where the copyright owner can point to a real licensing model for the material used.

That matters in sectors where websites are a major source of leads and where service descriptions, landing pages and SEO-focused text are commercially important. If a competitor has built a business practice around licensing or enforcing its content, the court may see that as stronger evidence of value than a generic estimate from a writer about what fresh copy would cost to create.

It also means your internal process matters. If your marketing team, agency or freelancer borrows wording from another site, the business using that text may still face the claim. The safer commercial position is to insist on original drafting, keep records of authorship and permissions, and review inherited website content during rebrands, acquisitions and agency handovers.

If your business publishes online marketing content, this case supports a simple operating discipline. Treat website wording as an asset with ownership, permissions and evidence behind it. That is especially important for service businesses where pages are built around local search, lead generation and repeated service descriptions.

If you receive a complaint, do not focus only on whether the text could have been rewritten cheaply. You also need to assess whether the complainant has evidence of licensing, prior settlements or court awards that may influence the damages position. Early document gathering can make a big difference to settlement strategy.

The judgment also contains a useful procedural point for businesses and advisers using the IPEC Small Claims Track. DC Air’s appeal notice was accepted late after a chain of filing errors and conflicting court guidance. The judge granted relief from sanctions because the appellant had acted reasonably and the delay was largely driven by misunderstandings about the unusual appeal route.

That does not mean deadlines are flexible. The court expressly said a late appeal filing was not trivial. The point is narrower: where a party has done what it reasonably should and the procedural route is genuinely unusual, the court may grant relief. Businesses should still assume appeal deadlines are strict and should be checked immediately after judgment.

The costs ruling is also important. Even though the appeal was heard in the High Court context, the judge applied the IPEC small-claims costs approach. Airconco did not recover ordinary legal costs. Instead, recovery was limited and the court awarded only a modest amount for half a day of the director’s time attending the hearing. That cost structure can influence whether an appeal is commercially worthwhile.