Civil Copyright Infringement #iplaw #law #copyright #infringement

Blog posts cannot substitute for legal advice. If the topics discussed in this post are relevant to a real case you have, please consult an attorney.

When you break the criminal law, it’s a crime; when you break the civil law, it’s a tort. Torts are punished when one entity (person or company) sues another. This is civil liability, and most copyright infringement is civil in nature.

Civil Liability, 17 U.S.C. §§ 504, 505

I’ve already discussed the penalties for criminal copyright infringement. There are two types of damages a copyright holder can recover: actual damages and statutory damages.

Actual Damages

Actual damages are probably exactly what they sound like to you. If the copyright holder can prove that the infringement resulted in $100,000.00 in damage, that amount can be recovered. Additionally, if the copyright holder can prove the amount of gross revenue earned by the copyright infringer (for example, where the infringer sold the copies), the holder can recover that amount as well. Notice that “gross revenue,” not “profits,” is relevant here. The infringer need prove only the amount of money taken in by those sales. The burden of proof then shifts to the infringer to prove deductible expenses (the cost of producing the copies) and whether any of the profits received were actually attributable to something other than the sale of the infringing works.

Example: Ivan Infringer created a website for the download of materials, and there’s a $5/month subscription fee. Ivan can fairly attribute a $5 cost to the process of illegally scanning in a book, which Ivan then sells for $20 to Bob Buyer. Bob also buys and downloads a copyright treatise ($100) that Ivan wrote, so that there’s no copyright infringement there. The copyright holder of the book sues, and proves that Ivan sold Bob a one-month downloading subscription ($5) and their book ($20). They are now entitled to $25 in damages. However, Ivan can then prove to the court that it cost Ivan $5 to make the illegal copy, which the copyright holder would have had to spend before selling a book anyway, meaning the copyright holder is entitled to only $15 for the book, which is actually Ivan’s profit. In addition, Ivan proves that Bob used his subscription to download more than just the book. In fact, the copyright treatise might be what Bob came for, as it’s much more expensive. If Bob testifies to this effect and is believable, or if Bob actually bought a bunch of other stuff legally through my website, then Ivan has proved that the copyright holder of the book isn’t entitled to recover the $5 subscription fee either. Instead of getting $25, he gets only $15.

Statutory Damages

The other type of damage is statutory damages. If the copyright holder can’t prove actual damages and the profits earned by the infringer, then the copyright holder could instead elect to receive statutory damages, which range between $750 and $30,000. If the copyright holder can prove that the infringement was willful, the maximum recover jumps from $30,000 to $150,000. If, on the other hand, the infringer can prove that he really had no reason to believe he was guilty of copyright infringement, then the minimum award drops to $200.

In my example above, the numbers are ridiculously low, yet even for those numbers, you can see that illegally selling a book for a $15 profit will necessarily result in a $200 charge. Because it’s going to be very difficult for me to prove I didn’t know the book was copyrighted work, I should probably assume that the $15 profit will result in a $750 fee, or much worse. Many download sites are claiming copyright law should be abolished or seriously diminished, so they’re essentially “flipping the bird” at the law. That sounds like willful infringement, and even for a $15 profit, a $150,000 award to teach a lesson and set an example seems plausible, and probably would be upheld by an appellate court.

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Rob Bodine is a Virginia attorney focusing his practice on real estate and intellectual property law. He’s currently Virginia counsel with First Class Title, Inc., a Maryland title insurance and settlement company. Rob is also a licensed title insurance agent in Maryland and Virginia.