Intellectual Property Newsletter
Recoverable Damages for Copyright Infringement
Under U.S. law, creators of artistic works, including literary and dramatic works, music, choreography, paintings, sculpture, sound recordings, and movies, automatically have a copyright in the work, provided it is “original” and has been fixed in some tangible medium, i.e., written down or recorded. Registration with the U.S. Copyright Office is not necessary, although it may be necessary in order to bring a lawsuit for infringement.
Copyright gives the creator (or anyone to whom the copyright is sold, transferred or assigned) a “bundle” of rights related to commercial exploitation of the work for a set period of time. These rights include the exclusive right of the copyright holder to do or authorize any of the following:
- Reproduction of the copyrighted work in copies or phonorecords.
- Preparation of derivative works based on the copyrighted work.
- Distribution of copies or phonorecords of the work to the public by sale or other transfer, or by lease, rental or loan.
- For certain types of works, performance of the work publicly.
- For certain types of works, display of the work in public.
- For sound recordings, playing it publicly by means of digital audio transmission.
Any other person who does one of the above with regard to the work may be infringing on the copyright and liable for civil damages and, in rare instances, criminal penalties. Some infringements, however, are protected from liability by the copyright laws. One major exception to liability is “fair use,” where infringements, as measured against certain criteria set forth in the law, may be deemed permissible and not subject to a lawsuit for damages.
Establishing Infringement Has Taken Place
If the infringement is not deemed fair use or does not conform to some other exception, the copyright owner may bring a lawsuit in federal district court to enforce the copyright. Typically, the holder must prove ownership of the copyright and that the defendant infringed the copyright by copying original elements of the work; there usually must be “substantial similarity” between the works. For example, an anthology may be copyrighted, but the works by various authors contained therein are not original, and copying them would not infringe on the copyright of the anthology (although it may infringe on the original author’s copyright).
The infringement need not be intentional or even conscious; “subconscious” infringement has been found in some cases. Others who did not directly participate in the infringing activities may be guilty of “contributory infringement,” if they knew of the infringement and induced, caused or contributed to it. Still others, such as an employer of the infringer, may be held “vicariously liable” if they had a direct financial interest in the infringement and also had the right and ability to supervise the infringing activity.
Copyright law entitles the copyright owner to choose between actual damages, plus the profits the infringer gained out of the infringement, or “statutory damages,” as set by the law. The owner cannot recover both and must make an election before a final judgment is rendered; the statutory damages reflect that actual damages may be difficult to establish in some copyright cases.
Actual damages include profits the copyright owner lost as a result of the infringement. Lost profits may be difficult to ascertain, but may be estimated based on sales prior to and after the infringement, and projected sales with and without the infringement. Expert testimony is often used to establish lost profits, as well as that an infringement took place. The copyright owner is entitled to recover both the profits of the infringer and the profits the copyright owner lost as a result of the infringement.
If the victim elects statutory damages, the law allows damages for all infringements with respect to any one work, for which one individual or two or more infringers are liable, to be set by the court. There is a minimum award of $750 and maximum of $30,000. Where the owner shows and the court agrees that the infringement was “committed willfully,” the court may increase the award up to $150,000. If the infringer shows he or she was unaware and had no reason to believe the action constituted infringement, statutory damages may be reduced to as little as $200.
The court also has the discretion in most cases to allow an award of all costs, including reasonable attorneys’ fees, to the victorious party in the lawsuit.
In addition to the above monetary damages, the court may issue an injunction, basically an order of the court, usually to the infringers, to cease the infringing activity. The court may also order destruction or turnover of all copies and may require the alleged infringer to deposit all profits from the infringement with the court, pending the outcome. Such orders may be granted as “preliminary,” upon a proper showing before trial, or “permanent,” after trial.
The George Harrison Case
In 1962, the “Chiffons” recorded a song written by Ronald Mack entitled “He’s So Fine.” It was a hit. The copyright ended up with Bright Tunes Music Corp. In 1970, ex-Beatle George Harrison (the Beatles had broken up not long before) released a single recording of a song he said he wrote in 1969 called “My Sweet Lord.” It was a smash hit and was also included on a George Harrison album. Bright Music sued for copyright infringement and the court agreed that “My Sweet Lord” was virtually identical to “He’s So Fine,” as did the court of appeals. Harrison admitted he may have heard “He’s So Fine,” but claimed he did not copy it. The court found that even subconscious infringement is culpable. The court awarded as damages all profits from the single recording and sheet music for “My Sweet Lord.” It also estimated the percentage the song contributed to sale of the album, approximately $1.6 million, and included this amount in the award. Based on circumstances not relevant to copyright law, Harrison ultimately did not have to pay the award.
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