Feds Considering Changes to Copyright Act Statutory Damages

U.S. Department of Commerce Proposes Changes to Statutory Damages Under the Copyright Act

Recently, the U.S. Department of Commerce Internet Policy Task Force issued a report proposing changes to the current statutory damages under the Copyright Act, “White Paper on Remixes, First Sale and Statutory Damages”

In recent years, there has been a surge in the number of copyright infringement cases filed against individuals for internet file sharing using BitTorrent programs. According to Matthew Sag, author of “Copyright Trolling, An Empirical Study”, over 48% of the total copyright infringement cases filed in 2014 were BitTorrent file sharing lawsuits which targeted John Doe account holders.

The most prolific plaintiffs which targeted John Doe defendants in 2014 were Malibu Media LLC, Dallas Buyers Club LLC, Countryman Nevada LLC, TCYK LLC and Voltage Pictures. Malibu Media LLC filed the largest share of John Doe copyright infringement cases, accounting for over 41% of the total copyright infringement cases filed in 2014.

Currently, individuals found liable for copyright infringement under the Copyright Act face statutory damages ranging from a minimum of $750 up to a maximum of $150,000 for willful infringement. There is no distinction between damages awarded against individuals or corporations under the Act. There is also no distinction between copyright infringement committed for personal use or for profit. This means a college student who illegally downloads a movie on his computer could potentially face the same statutory maximum which could be applied to a corporation that commits copyright infringement for profit.

Critics[1], including some federal judges, of these statutory damages point out that copyright holders stand to receive a windfall if successful in court since damages could be much higher than the market value of the copyrighted works. Further, the threat of statutory damages prevents many families and individuals from litigating these cases out of the fear that a judge could potentially award $150,000 in damages to the plaintiff.

Attorney Jeffrey Antonelli argued for a change in statutory damages in his article, “Torrent Wars,” where he argued that the statutory damages should be lowered to a maximum of $5000 for individual infringers. Unfortunately to date, Congress has not enacted any legislation lowering statutory damages under the Copyright Act.

Finally, the federal government has taken notice. Recently, the U.S. Department of Commerce Internet Policy Task Force recommended amendments to the Copyright Act which would potentially reduce statutory damages awarded against individual infringers. Specifically, the Task Force recommended courts consider nine factors when awarding statutory damages:

“(1) The plaintiff’s revenues lost and the difficulty of proving damages.

(2) The defendants’ expenses saved, profits reaped, and other benefits from the infringement.

(3) The need to deter future infringements.

(4) The defendant’s financial situation.

(5) The value or nature of the work infringed.

(6) The circumstances, duration, and scope of the infringement, including whether it was commercial in nature.

(7) In cases involving infringement of multiple works, whether the total sum of damages, taking into account the number of works infringed and number of awards made, is commensurate with the overall harm caused by the infringement.

(8) The defendant’s state of mind, including whether the defendant was a willful or innocent infringer.

(9) In the case of willful infringement, whether it is appropriate to punish the defendant and if so, the amount of damages that would result in an appropriate punishment. “

Further, the Task Force acknowledged that in cases involving multiple works, even the minimum statutory award of $750 per work could result in excessively large verdicts. To combat this issue, the Take Force recommended that the Copyright Act be amended to permit courts to deviate from the requirement to award the statutory minimum in cases involving a large number of works. This proposal would have the most dramatic effect on cases filed by Malibu Media LLC, a company which frequently files cases alleging that an individual downloaded more than 100 of their copyrighted works.

These proposed changes could provide needed relief for the thousands of families and individuals dealing with John Doe copyright infringement cases. We suggest contacting your U.S. Senators and Representatives about the U.S. Department of Commerce’s proposal to bring this important issue to their attention.

[1] Two outstanding resources for those targeted in BitTorrent copyright infringement lawsuits are www.fightcopyrighttrolls.com and www.dietrolldie.com both authored by people wrongfully accused by copyright plaintiffs.

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