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Friday, April 8, 2011

Double-Dipping on Statutory Damages in Copyright

by Thomas O'Toole

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Double recovery -- being compensated twice for the same injury -- is discouraged in most areas of the law. Not so apparently when it comes to statutory damages for copyright infringement, as Judge Kimba Wood ruled April 6 in Arista Records LLC v. Lime Group LLC, No. 06-5936 (S.D.N.Y., April 6, 2011), a case in which the court has already found LimeWire liable for inducing many copyright infringements committed by its users.

Arista Records, in prior proceedings, had already recovered $47,927.62 in statutory damages against the direct infringers of 104 sound recordings. Arista Records is now attempting to additional recover statutory damages from LimeWire for inducing the infringement of those same 104 recordings.

The court held that the Copyright Act permits this double recovery.

At 17 U.S.C. § 504(c)(1), the Copyright Act provides that a copyright owner may elect to recover “an award of statutory damages for all infringements involved in the action, with respect to any one work, for which any one infringer is liable individually, or for which any two or more infringers are liable jointly and severally.”

Because the direct infringers are not part of the current lawsuit against LimeWire, Section 504(c)(1) does not preclude an award of statutory damages, a second time, for the same work in the current lawsuit, the court reasoned.

Whether or not a copyright owner may recover once from the direct infringer and again from a party that induced the infringement of the same work is a question of first impression in the federal courts, Judge Wood remarked.

The eventual outcome may not be as harsh as it appears. The court went on to note that the fact-finder at trial may consider the fact that Arista Records has already recovered damages for the same works whose infringement LimeWire induced. Further, the court itself may consider the prior damage award when setting the level of statutory damages.
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