Monday, February 01, 2016

Creativity, Copyright Trolls and Proposed Changes To The Copyright Act's Statutory Damages Provisions

Department of Commerce Recommends Changes To the Copyright Act

The Department of Commerce's Internet Task Force on Copyright Policy, Creativity and Innovation in the Digital Economy has issued a White Paper on Remixes, First Sale Doctrine and Statutory Damages.   The Task Force pretty much concludes that everything is hunky dory with remixes and that the market and educational programs will sort things out.  Ditto on the first sale doctrine.

But with statutory damages, the Task Force has made some significant recommendations, seemingly troubled by the Tenenbaum and Rasset-Thomas outlandishly high jury awards, on the one hand, and copyright trolls on the other.  On yet another hand, the task force had concerns about stifling innovation where a new service or technology might be subjected to huge liabilities in an area where the question of infringement was unsettled.

The Task Force recommended three amendments to the Copyright Act to address
some of the concerns presented: 
1.incorporating into the Copyright Act a list of factors for courts and juries to consider when determining the amount of a statutory damages award.
2. changes to the copyright notice provisions that would expand eligibility for the lower
“innocent infringement” statutory damages awards.
3. in cases involving non-willful secondary liability for online services offering a large number of works, courts be given discretion to assess statutory damages other than on a strict per-work basis.

The Task Force proposes a new clause in subsection Section 504(c)526 as follows:
FACTORS TO CONSIDER -- In making any award under this subsection, a court shall
consider the following nonexclusive factors in determining the appropriate amount of the
(1) The plaintiff’s revenues lost and the difficulty of proving damages.
(2) The defendant’s expenses saved, profits reaped, and other benefits from the
(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

My book Copyright Litigation Handbook 2015-16 Chapter 17 Damages and Profits reviews federal court procedures and case law related to statutory damages and proving damages and profits.   Chapter 18 Attorneys Fees and Costs may also be helpful.  The full table of contents here.

The White Paper is worth reading as a summary of current debates over copyright law as it relates to the internet.   The Electronic Frontier Foundation put out an analysis worth reading here with a nice-sounding title, but seemed to be disappointed with the recommendations on remixes and first sale.

 Copyright law, fine art and navigating the courts. All practice, no theory.Copyright Litigation Handbook (Thomson Reuters Westlaw 2014-2015) by Raymond J. Dowd
 Copyright Litigation Handbook on Westlaw

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