COPYRIGHT INFRINGEMENT

Anyone who, without the authorization of the copyright owner, engages in any act that is covered by one or more of the exclusive rights of a copyright owner is an infringer of copyright unless the act is authorized by the copyright owner or is permitted by an exception in the copyright law.

Copyright infringement is determined without regard to the intent or the state of mind of the infringer. In other words, it makes no difference whether the infringer knew what they were doing constituted infringement.

Courts usually require a copyright owner to prove that she owned the copyrighted work, and the defendant violated one of the exclusive rights of the copyright owner. In the case of the reproduction right, since there is seldom direct evidence of the offending act, a copyright owner may prove infringement through circumstantial evidence establishing that: (1) the defendant had access to the original work, and (2) the two works are substantially similar.

It is not necessary that the entire original work be copied for an infringement of the reproduction right to occur, nor that the copying be literal. All that is necessary is that the copying be substantial and material and that protected expression – not just ideas – were copied. Likewise, the similarity between the two works must be similarity of protected elements (the expression), not unprotected elements (the facts, ideas, etc.). The portion taken by the alleged infringer must also be more than a trivial amount to qualify as infringing.

Infringement can be found not only for direct participation in infringing activity (as described above) but also for those that facilitate the infringement under theories of secondary liability.

An infringer may be subject to both civil remedies and criminal sanctions. If the copyright holder wishes to seek monetary damages and profits, attorneys’ fees, and/or an injunction, the copyright holder can initiate a lawsuit in federal court against the alleged infringer. If an infringement is willful and “for purposes of commercial advantage or private financial gain,” or the infringement involves the willing reproduction or distribution of multiple copies with a value of more than $1,000 during a 180-day period, then the federal government may choose to bring a criminal copyright infringement case against the infringer.

The various remedies that are available to copyright owners in infringement actions are explained below.

• Injunctions: A copyright owner may seek a preliminary or permanent injunction to prevent or restrain future or ongoing infringement. Courts generally grant permanent injunctions where liability is established and there is a threat of continuing infringement.
• Impoundment and Destruction: Courts may order the impounding of infringing goods at any time an action is pending. As part of a final judgment, the court may also order the destruction or any other reasonable disposition of the infringing goods.
• Damages: At any time before final judgment is rendered, a copyright owner may elect to recover actual damages and profits of the infringer or statutory damages (i.e., damages determined by the statute, here the Copyright Act). Actual damages may be awarded in the amount of the copyright owner’s losses plus any profits of the infringer attributable to the infringement. Statutory damages may be awarded in an amount between $200 to $150,000 per work infringed, with the former available only for innocent infringers and the later available in cases of willful infringement. Statutory damages are only available to copyright owners who have registered their copyrights prior to infringement.
• Court Costs and Attorneys Fees: Courts have discretion to allow the recovery of full court costs by or against any party, including the awarding of reasonable attorney’s fees to the prevailing party under certain circumstances. However, plaintiff copyright owners cannot be awarded costs and attorneys’ fees unless they have timely registered their works with the U.S. Copyright Office.
• Criminal Penalties: If an infringement is willful and “for purposes of commercial advantage or private financial gain,” or the infringement involves the willing reproduction or distribution of multiple copies with a value of more than $1,000 during a 180-day period, then the alleged infringer may be indicted by a federal grand jury and tried for criminal copyright infringement. If found guilty, the infringer may be imprisoned for up to five years and fined up to $250,000.

A copyright owner who prevails in its infringement case and elects to receive statutory damages may be awarded damages in an amount between $750 to $30,000 per work infringed.

Innocent Infringement: If an infringer can show that she was not aware and had no reason to believe that the activity constituted an infringement, the court may find there was an innocent infringement. However, there can be no innocent infringement where the copyrighted work contains a proper copyright notice. A finding of innocent infringement would not excuse the defendant from liability for the infringement, but may result in a reduction in the statutory damages awarded to the copyright owner to a minimum of $200 per work infringed.

Willful Infringement: If a copyright owner can show that the infringement was willful, the court may increase statutory damages up to a maximum of $150,000 per work infringed. An infringement may be found to be willful if the infringer had knowledge that the activity constituted infringement or recklessly disregarded the possibility of infringement.

Calculating Statutory Damage Awards: Statutory damages are awarded on a per-work basis, not on the number of infringements. So for example, if one work was infringed numerous times there would only be one statutory damage award. Conversely, if a defendant were to be found liable for infringing a monthly newsletter over the course of a two-year period, the award would be the amount chosen by the court multiplied by 24 because 24 newsletters, or 24 works, were infringed over the period. Thus, the statutory damage award could be as low as $18,000 (if the court chooses the bottom range of $750) or as high as $720,000 (if the court chooses the upper range of $30,000). Of course, a finding of innocent or willful infringement could reduce or increase these awards as well.

Those who do not directly infringe the copyright owner’s rights, but facilitate the infringement by others may be liable under theories of secondary liability. This an area of copyright law that is in flux and very complex. We provide a high-level summary of secondary liability but if you have more than a passing interest we recommend you review a wide variety of diverse views on the topic.

There are several theories by which a party can be liable for secondary liability:

• Contributory Infringement: Contributory infringement is based on a connection to the infringing activity. A party can be found liable for contributory infringement when that party knows of the infringing activity and induces, causes or materially contributes to it. Whether the party may be liable for contributory infringement may also depend on whether the party is providing services to the infringer and therefore has an ongoing relationship with the direct infringer or providing equipment or other instrumentalities to facilitate the direct infringement and does not have an ongoing relationship with the direct infringer. Further, the courts have developed a substantial noninfringing use test by which a party will generally not be found liable where the product is widely used for legitimate, unobjectionable purposes unless there is evidence of intent. Thus, when a party has more than mere knowledge that its product may be being used for infringing purposes, and instead is promoting infringement through its statements or actions, the substantial noninfringing use test will not immunize the party from liability.
• Vicarious Liability: Unlike contributory infringement, vicarious liability will depend on the relationship between the party and the direct infringer (as opposed to the party’s relationship to the infringement). To be found vicariously liable the party must have both the right and ability to supervise or control the infringing action of the direct infringer, and a direct financial benefit from the infringing activity. Actual knowledge of the infringement is irrelevant in a vicarious liability determination. The same services and equipment considerations that apply for contributory liability would also apply to vicarious liability.
• Active Inducement: The Supreme Court articulated a relatively new theory of secondary liability in the 2005 case of MGM Studios v Grokster. In that case the Court held that a party that distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties. The Court limited the scope of this test, explaining that mere knowledge of infringing uses and actions incident to the distribution of the product (such as technical support) would not, standing alone, constitute inducement.
• Willful Blindness: Proving willful blindness is more about satisfying the contributory infringement knowledge standard that its own free-standing theory of liability. A party is “willfully blind” when it is aware that there exists a high probability of an infringement but consciously avoids confirming instances of infringement. While willful blindness does not require an affirmative duty to monitor, it does mean that a party cannot “look the other way” in order to avoid confirming instances of infringement.

Service providers are potentially liable for the infringing acts of their users under one or more of these theories. In reality, however, they rarely are held liable due to a series of provisions in the copyright law that immunize service providers who prove to be good actors by taking immediate steps to combat their users’ online infringements. These provisions are set forth in the Digital Millennium Copyright Act (DMCA).