Robbie Williams faces a demand for punitive damages after a court ruled he copied a Woodie Guthrie song.
The High Court ruled in October that Jesus in a Camper Van contained "substantial" copying from Guthrie's I Am The Way.
A judge has now begun hearing arguments on the amount of compensation to be awarded.
Jesus in a Camper Van was co-written by Williams with Guy Chambers for the album I've Been Expecting You. It is in breach of copyright of Guthrie's song and an adaptation by Loudon Wainwright III.
The copyright holders, New York-based Ludlow Music, are seeking damages from Williams, Chambers, and the singer's record and publishing companies.
Ludlow's counsel, Pushpinder Saini, told Mr Justice Pumphrey that Ludlow had been willing from the outset of the dispute to grant a licence on condition that it received 50% of the royalties from the Williams song.
But the defendants, who offered no more than 25%, went ahead and sanctioned release of the recording on the Chrysalis label without Ludlow's authority.
"Well before any commercial release of the album by Chrysalis, these defendants were fully aware that unless they agreed to Ludlow's licensing terms, they had no authority to permit the release," said Mr Saini.
This conduct required the court's "condemnation" in the form of a punitive damages award over and above the basic 50% royalty, Mr Saini argued.
"Persons in the position of the defendants must be deterred from infringing copyright," he said.