Statutory Damages for Copyright Infringement
by David W. Johnson
In a copyright infringement lawsuit, a plaintiff may elect to pursue either actual damages and lost profits, or statutory damages as defined by the copyright statute. 17 USC §504(c)(1). Statutory damages range from $500 to $20,000 per discrete infringed work. These damages can increase to a maximum of $100,000 per infringed work if the infringement is found to be willful. Whether willful or not, these damages have traditionally been assessed by the federal judge, even where the issue of infringement was decided by a jury.
A recent decision by the Supreme Court has fundamentally altered the landscape for the assessment of damages in copyright infringement actions. The Supreme Court ruled that the parties, either the copyright owner or the infringement defendant, have a right to a trial by jury on the amount of statutory damages recoverable in an action against an infringer. Feltner v. Columbia Pictures Television, Inc., 140 L.Ed. 2d 438 (1998). This holding drastically alters the landscape in copyright litigation.
The relevant federal statute states that "the copyright owner may elect, at any time before final judgment is rendered, to recover, instead of actual damages and profits, an award of statutory damages for all infringements involved in the action, with respect to any one work . . . of not less than $500 or more than $20,000 as the court considers just." 17 USC §504(c)(1) (emphasis added).
The statute continues, "In a case where the copyright owner sustains the burden of proving, and the court finds, that infringement was committed willfully, the court in its discretion may increase the award of statutory damages to a sum of not more than $100,000." 504(c)(2) (emphasis added).
The issue is whether the term "court" as used in the statute means a judge or a jury. The Supreme Court, relying on deep historical precedent specific to copyright law, held that both questions - willfulness and per-infringement damages - are questions for the jury.
The effect is that statutory damages will, in many contexts, become the plaintiff's primary tool for maximizing recovery for alleged infringement. Where a case involves infringement of several works, a multiplier effect takes hold. In Feltner, by way of example, the trial judge found 440 separate acts of infringement - one for each airing by Feltner of a syndicated television episode for which license fees to Columbia went unpaid. The judge also found the infringements willful, but assessed only $20,000 per infringement, resulting in an award to Columbia of $8.8 million (plus attorney's fees).
Under the new Feltner rule, a jury could have awarded upwards of $44 million. Where this multiplier effect is capable of generating damage numbers approaching, if not exceeding, the value of the works themselves, one can argue that the Feltner rule contains an embedded punitive damages component where none previously existed (and is expressly disallowed). Because such numbers can far exceed actual damages, and because willfulness will likely be easier to prove to a jury than to a judge, Feltner now requires all copyright litigants to assess even more carefully, at the beginning of any potential litigation, the significance of having a jury decide these questions.
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