You caught them! They stole your work! It’s as clear as day. Your art is being sold on t-shirts on their website. What can be done?
Sue, right!? Well, lawsuits are expensive. It can often be quite difficult to determine if going after that infringer is financially viable for you or your business. Even if you win, how much will you recover?
U.S. Copyright Law includes a provision which affords copyright owners the right to recover damages, after proving infringement, in a dollar amount range which is spelled out in the statute. Currently, that range is between $750 to $30,000 per infringement depending on the seriousness of the infringing act and the financial worth of the infringer. If the infringement is found to be intentional, the amount could go as high as $150,000 for the infringement. So, you see, the election of statutory damages could be quite beneficial in instances where the other measures of damages, actual damages (the amount you can prove you actually lost as a result of the infringement) and the infringer’s additional profits not already accounted for in the computation of actual damages (gross revenue from infringing sales minus expenses proven by the infringer), may be either insufficient or too difficult to prove. However, copyright statutory damages are not available to all copyright owners. Only copyright owners who have registered their work with the U.S. Copyright Office either before the infringement began, or within 3 months of publication, may receive such damages.
A recent case provides an excellent example. Southern Credentialing Support Services, LLC (“Southern Credentialing”) issues forms for doctors to use in providing their credentials for verification when they wish to practice at hospitals. One of their clients, Hammond Surgical Hospital, LLC (“Hammond”), bought their forms and services for a time, but stopped. After Hammond stopped purchasing the forms it continued using them and allowed the forms to be accessible via their Website. Southern Credentialing found out and registered its forms with the Copyright Office. Negotiations between the parties did not go well. Southern Credentialing later sued.
Southern Credentialing won a substantial victory in federal district court. The company obtained summary judgment on its copyright infringement claim and received statutory damages. Wait. What? Didn’t we just go over the point that registration in advance of the infringement is required to receive statutory damages? Yes. That should bar statutory damages in this case, right? Well, let’s see. The district court determined that because Hammond’s post-registration distribution acts of infringement were “different in kind” from its pre-registration reproduction acts of infringement, statutory damages were available. You see reproducing a copyrighted work without permission is an act of infringement. So is distributing that work. Based on this reasoning, statutory damages were awarded along with attorneys’ fees and costs and a permanent injunction against Hammond was issued.
On appeal, the Fifth Circuit addressed whether statutory damages are available in this situation where pre-registration and post-registration infringing acts are different in kind. Applying Fifth Circuit precedent, the appellate court reasoned that the outcome should be no different irrespective of the type of infringement that occurred pre-registration and post-registration. The Fifth Circuit reversed the district court ruling.
The reversal in this case should further alert copyright owners that it is indeed important to federally register works as early as possible or risk losing the availability of a key potentially beneficial provision of the Copyright Act.
©2020 Albert F. Davis, Esq.
This law update is intended for general information purposes only. One should not consider the update legal advice or legal opinions relating to any specific facts or circumstances. An attorney-client relationship is not created by reading this update. Please feel free to contact A.F. DAVIS LAW for further information.