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Damages and Penalties for Copyright Infringement

Co-author Gerald M. Levine

Copyright infringement has consequences. The Copyright Act protects the integrity of an author’s work by granting the copyright holder certain exclusive rights in both her original and derivative works. It has teeth. This means the author controls who may do what to her work. For example, without a license from the author no one can prepare a theatrical reading or performance based on a memoir. To do so is a copyright infringement for which the infringer is liable in damages, penalties and attorney’s fees. (I am not speaking here about fair use, to be discussed in a future essay).

These principles of copyright infringement have been affirmed in a number of recent cases: a District Court case in New York parsing the issue of copyrightability for a parody; a decision of the United States Court of Appeals for the Third Circuit in New Jersey involving a clipped photograph; and a recent appellate case from the 1st Circuit. In this essay we will focus on the 1st Circuit decision, Spooner v. Een, 10-2393 (1st Cir. 7-5-2011) because it exemplifies a situation in which the alleged infringer pushes back. Where the infringement is clear, pushing back has enormous consequences on the award of attorney’s fees. In Spooner, the infringement occurred when the defendants included a song composed, copyrighted, and performed by the plaintiff in a commercial advertisement prepared for television and internet display. The author had not authorized use of the work.

With tongue in cheek, the Court stated that “[i]t would serve no useful purpose to recite book and verse. It suffices to say that the parties engaged in frenetic motions practice, conducted extensive discovery, and squabbled over a plethora of issues (large and small).” It should not come as a surprise that copyright litigation is not inexpensive. One of the defendants settled and the other went to trial, and suffered the consequences of its rashness. The Court noted drolly:

After settlement negotiations fizzled, the case was tried to the court. The plaintiff prevailed: the court found that the defendants had willfully infringed the protected work and that Egan had failed to act celeritously in response to the plaintiff’s request to retire the Sugarloaf commercial.

The case came to the 1st Circuit Court of Appeals on the issue of attorney’s fees. The defendant argued that the “request was so exorbitant that it warranted an outright denial of fees.” The district court elected “not to go down that road” and neither did the appellate court. However little the award of damages, if the defendant insists on playing hardball it will pay the piper. The Court rejected the argument that there must be some proportionality in awarding attorney’s fees. Not necessarily so, held the Court:

It is obvious that the amount of fees requested by the plaintiff is quite large in relation to the statutory damages recovered (whether those damages are viewed before or after … set-off [by the settling defendant]). The law, however, does not demand strict proportionality between fees and damages….

The reason for holding to this position is that “a strict proportionality requirement would overlook entirely the value of other important litigation goals. That kind of rigidity would frustrate the core purpose that underlies many fee-shifting statutes, which are designed to afford private parties the opportunity to vindicate rights that serve some broad public good.” The “broad public good” of course is the right of authors to enjoy the fruits of their labors.

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