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Bigger Stakes (And a Bigger Stick) for Publishers Who Sue Copyright Infringers

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Among the many recent changes in the US Copyright Act is one that
offers a crucial benefit to publishers and other copyright
owners—an increase in the dollar amount of
“statutory” or “in lieu” damages that are
available to copyright owners who sue for infringement of a
registered work of authorship.

Thanks to a recent amendment to the Copyright Act, the range of
statutory damages has been enhanced, and the maximum award of
statutory damages is now $150,000, a 50% increase over the previous
limit. And the availability of such damages may make a crucial
difference to the publisher who is trying to decide whether or not
to sue a copyright infringer.

“Actual” vs. “Statutory” Damages

The key consideration in many copyright infringement cases is
whether the publisher is entitled to recover only “actual
damages and profits,” which must be proven in a specific amount
by a showing of evidence, or “statutory damages,” which
may be imposed by the court without any proof of actual damages.
Statutory damages are sometimes called “in lieu” damages
because they are given “in lieu of actual damages and
profits.”

Under some circumstances, of course, actual damages suffered by a
publisher may far exceed the range of statutory damages. As a
general matter, actual damages consist of the profits that the
infringer gained and/or the profits that the copyright owner lost by
reason of the infringement. In most cases, however, it is difficult
to secure evidence of actual damages or to prove the specific amount
of such damages.

For that reason, the Copyright Act allows copyright owners to
seek statutory damages without any evidence of actual damages or
lost profits. The exact amount of statutory damages is determined by
the court, but the Copyright Act (17 USC Section 504) prescribes a
range of damages to govern the discretion of the court. If evidence
of actual damages is hard to find—or if the amount of actual
damages is too low to justify the expense of a lawsuit—then
the copyright owner may choose to seek statutory damages.

The Range of Statutory Damages

 

Before the Copyright Act was amended to enhance the range of
statutory damages, the court was limited to a minimum of $500 and a
maximum of $20,000 for copyright infringement. If the copyright
owner was able to show that the infringement was committed
willfully—that is, with knowledge of the copyright
owner’s rights and the intent to infringe them—then the
award of statutory damages could be increased to $100,000.

Today, all of these amounts have been increased by 50%. That is,
statutory damages range from a minimum of $750 to a maximum of
$30,000 for “garden variety” infringements, and the
maximum damage for willful copyright infringement is now
$150,000.

The enhanced range of statutory damages applies to any copyright
infringement suit that is brought on or after the effective date of
the amendment, that is, December 9, 1999, even if the infringement
took place prior to that date.

These limits, by the way, apply to “all infringements
involved in the action, with respect to any one work.” In other
words, whether a pirated edition of a copyrighted work includes 500
copies or 50,000 copies, a single measure of statutory damages is
applicable.

Still the fact that the copyright owner does not have to prove
damages or lost profits in any specific amount is an enormous
benefit in litigation. Once the plaintiff has met his basic burden
of proof—a showing that the defendant infringed a copyrighted
work owned by the plaintiff—no evidence of actual loss need be
presented, and it is left to the discretion of the court to award
damages within the range of statutory damages.

The precise amount of statutory damages is ultimately decided by
the judge or jury after considering the “nature and
circumstances of the case.” As a general proposition, the more
egregious the infringement, the higher the award of statutory
damages is likely to be. Thus the plaintiff will make every effort
to present evidence that shows the infringer in the worst possible
light. But, in the end, the amount of statutory damages is within
the “sound discretion” of the court.

Innocent Infringers

 

A special measure of statutory damages is prescribed for
infringers who can show they acted innocently and in good faith in
copying a copyrighted work—”innocent infringers,” as
they are known. Where the infringer can prove that he “was not
aware and had no reason to believe that his or her acts constitute
an infringement,” then the court is empowered to reduce the
statutory damages to only $200.

The best approach to anticipating and preventing a defense of “innocent infringement,” by the way, is to include a
proper copyright notice in all copies of a work published under the
authority of the copyright owner. Although copyright notices are no
longer mandatory, the inclusion of a proper notice generally
prevents an infringer from claiming to be an “innocent
infringer”—and, in fact, the use of a copyright notice
may help to prove that he was, in fact, a willful infringer!

Under certain circumstances specified in the Copyright Act, the
court is also empowered to excuse an infringer from any
statutory damages if he had “reasonable grounds for believing
that his use of the copyrighted work was a fair use.”—but
only if the infringer was an employee of a nonprofit educational
institution, a library, or an archive. Another exception applies
specifically to nonprofit public broadcasting entities. The fair use
doctrine, which is set forth in the Copyright Act at 17 USC Section
107, allows certain limited uses of copyrighted work without
permission from the copyright owner.

The Importance of Registration

Certain statutory remedies for copyright infringement, such as “in lieu” damages (as described above) and attorneys fees,
are available only for infringements of registered works.
This is one crucial reason why publishers should promptly register
the copyright in the works they publish.

The requirement for copyright registration as a condition for
statutory remedies works in two ways.

First, if the work has been registered in the Copyright office
within three months after first publication, then statutory damages
are available for all infringements, whether they occur
before or after the date of registration.

Second, if the work has not been published at all, or if it is
registered more than three months after first publication, then
statutory remedies are available only for infringements that
commenced after the date of registration.

The Importance of Statutory Damages

 

In many instances of copyright infringement, the publisher is
unlikely to be able to prove “actual” damages or lost
profits in an amount substantial enough to justify the cost, burden,
and risk of litigation. For that reason, the availability of
statutory damages often means the difference between aggressively
pursuing a copyright infringer or allowing the same infringer to go
unpunished because a lawsuit is not cost-effective. And thanks to
the generosity of Congress toward copyright owners, the enhanced
range of statutory damages holds out the prospect of an even richer
reward for copyright owners who go to the trouble of enforcing their
copyrights in court.

Jonathan Kirsch, an attorney specializing in publishing law,
serves as pro bono general counsel for the Publishers Marketing
Association. He is a partner in the firm of Kirsch & Mitchell in
Los Angeles, and author of “Kirsch’s Handbook of
Publishing Law” and Kirsch’s Guide to the Book
Contract” (Acrobat Books). Kirsch’s e-mail address is
copperplate@earthlink.net.

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