DEPARTMENT OF COMMERCE PROPOSES CHANGES TO U.S. COPYRIGHT LAW INCLUDING CHANGES TO SECTION 504 OF THE COPYRIGHT ACT

In January 2016 the U.S. Department of Commerce issued a White Paper report recommending amendments to U.S. copyright law. The Report summarizes the comments and testimony received from stakeholders and sets forth its conclusions and recommendations.

The Task Force addressed Remixes, First Sale and Statutory damages. In connection with Remixes and First Sale, the recommendation is to do nothing at this time.

The Task Force recommends amending the Copyright Act to provide both more guidance and greater flexibility to courts in awarding statutory damages by incorporating a list of factors to consider when determining the amount of a statutory damages award. In addition, it advises changes to remove a bar to eligibility for the Act’s “innocent infringer” provision, and to lessen the risk of excessive statutory damages in the context of non-willful secondary liability for online service providers. The recommendations focus on the appropriate calibration of statutory damages in the contexts of individual file sharers and secondary liability for large-scale infringement.

Recommendations:

Specify Factors in the Copyright Act to Consider in Assessing Statutory Damages
The Task Force recommended that Congress enact a new paragraph in Section 504 of the Copyright Act specifying factors that must be considered when determining statutory damage award amounts. According to the White Paper, the goal is to ensure a greater degree of predictability in copyright infringement cases and other concerns. , The Task Force concluded that a statutory set of factors would be preferable since they will be binding on all courts.

The Task Force noted that the nine factors described below should be non-exclusive to ensure that courts are not foreclosed from considering other factors that may be relevant in a particular case.

NEW CLAUSE IN SECTION 504 (c):

In making any award under this subsection, a court shall consider the following nonexclusive factors in determining the appropriate amount of the award:

(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 infringement.
(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 punishment.

*Under current law, if a copyright notice accompanies a published work an accused infringer cannot claim to be an “innocent” infringer (meaning the infringer is not entitled to a reduced statutory damage award. If this provision is adopted, it will remove the bar to eligibility for the Act’s “innocent infringer” provision, and lessen the risk of excessive statutory damages in the context of non-willful secondary liability for online service providers.