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1 Nov

Copyright Damages and the Art of Trolling

By Cathleen A. Dettmann

November 1, 2012

Perhaps this has happened to someone you know or, even worse, to the errant teenager in your household: You get an innocent looking piece of mail from your cable provider. You almost throw it directly into your recycling bin, but decide to open instead. What you find inside is alarming – a notice that your cable provider has received a subpoena relative to your IP address and is being asked to disclose your identity to a plaintiff in a lawsuit. Yes, it’s true, what we do on the internet is not entirely anonymous and big brother may be watching. And for a bigger scare, those horror stories you hear about random individuals being sued for hundreds of thousands of dollars for illegally downloading copyrighted material? Also true.

Even if it was just one movie or one song – even if it was a song that no one but the artist even caresabout, or one that has been universally panned as terrible by every critic – you can still be sued for a lot of money. Most people believe this can never happen to them, but when you’ve seen it happen enough times you learn that everyone should be careful. The reason why illegal downloads or other “innocent” acts of copyright pilfering are so potentially hazardous lies in the gritty details of copyright damages and how they’re calculated. Additionally, the complicated set of rules governing copyright damages has given rise to an entirely new type of digital con-artist: The copyright troll.

People that have copyrights generally fall into two categories: Those who registered their copyrights with the United States Copyright Office and those who have not. (I suppose there can be a third category of those with improperly registered copyrights, but they are effectively grouped with those who have not registered their copyright at all). In earlier posts, I wrote about how a person does not need to do any formal filings in order to hold a copyright and maintain the exclusive ability to copy, publish and otherwise distribute their work. However, a person does need to register their copyright with the federal office in order to file and maintain a lawsuit relative to that copyright in federal court. Additionally, one needs a registration in order to achieve the holy grail of copyright compensation: Statutory damages.

Anyone with a registered copyright who finds that someone else infringed on that copyright after it was registered with the federal office, is entitled to collect statutory damages of between $750 to $150,000 per infringement. Moreover, they’ll be entitled to collect the attorney fees they incurred in suing the infringer on top of the other monetary damages. So, if a court found that you illegally downloaded that song and knew that what you were doing was illegal, you’ll be on the hook for damages on the higher end of that range. What if you downloaded, say, four songs? Well, you can quadruple that damages figure, plus count on forking over a hefty sum for attorney fees – $400,000 plus attorney fees would not be out of the question. You can see that statutory damages in copyright cases can get extremely high in short order.

Why did Congress write the law this way? Because actual damages in copyright cases are really hard to prove – they’re difficult to prove in most kinds of civil cases, actually. More on that later. Additionally, Congress wants to incentivize artists to create and advance artistic expression. By protecting copyrights fiercely and allowing artists to collect attorney fees to boot, Congress not only provides a fertile ground for artists to innovate, it also incentivizes attorneys to take and prosecute copyright cases even if the artist in question might not have the money up front to pay that lawyer’s fees.

What about those copyrighted works that weren’t registered until after the infringement? Typically, in those situations, an artist will see that their copyrighted material was pirated, and then will register it for the sole purpose of suing the infringer. Unfortunately for those artists (or fortunately for the infringer), they will not be able to collect the much sought-after remedy of statutory damages. Instead, these artists are stuck with trying to prove their actual damages. Under the copyright act, the copyright holder must show that they suffered lost sales or other damages and/or that the infringer made profits attributable to the copyrighted work. As anyone with a liberal arts degree knows, it’s tough to make a living as an artist. So, if artists were limited to collecting damages of lost sales or recovering the profits of the infringer, there would hardly be any actual damages at all. Not to mention the fact that many people infringing on copyrights for their own personal enjoyment do not earn any profits in the first place.

If statutory damages were not available, then most people could infringe on copyrights with impunity – especially on those owned by little known or perhaps up-and-coming artists whose work may simply not be worth that much. Moreover, those who pursue lawsuits in federal court for actual damages are not guaranteed that they will collect their attorney fees if they win. While a court mayaward fees to the prevailing party in these situations, it doesn’t have to award them. So, it’s difficult for copyright holders in this situation to enforce their rights because they likely cannot afford the services of an attorney.

That said, there might be other advantages to pursuing an infringer other than damages to make it worth an artist’s while. For example, whether or not a copyright is registered prior to an infringement, the copyright holder can ask the court to enter an injunction prohibiting the infringer from continuing their activity. This might be valuable to someone who created a work that has been widely disseminated by another in violation of their copyright, even if no money was involved.

So, let’s get back to the person I mentioned at the top of this post – the one who just received the notice from their cable provider. This is how illegal downloading issues are approached from a practical perspective. If you download something, the person who owns the song or movie can usually only get access to your IP address, which will only tell them which cable or internet provider hosts that address. Enter the federal subpoena. The copyright holder files a lawsuit and then issues a subpoena ordering that your cable provider give them your name and address so that they can file suit against you specifically. Your only hope is to hire an attorney to fight (or to “quash”) that subpoena and prevent the cable provider from giving out your name. Unfortunately, your odds of winning that fight may be about the same as the odds that your cable bill is easy to understand.

If the copyright holder registered their copyright prior to your illegal download, then you are looking square in the face of a judgment being entered against you for statutory damages and attorney fees. Sure, you might have some defenses, but the affirmative defenses available in copyright cases are drawn with strict boundaries in favor of copyright holders and are very limited in scope. Most people faced with this situation try to settle quickly with the plaintiff in order to avoid taking their chances that the judge will levy a large damages award against them.

Enter the copyright troll. Because defendants in copyright cases have such a strong incentive to settle quickly, there are entire companies out there that exist solely to buy up copyrights, register them, and then watch like a hawk for any kind of infringing activity. Then they sue and make a settlement demand. Individuals are in this game as well. While the trolls often settle for much smaller sums than a defendant might face if the case went to trial, you could still be bullied into paying thousands of dollars. Moreover, sometimes trolls will sue even in cases where it’s not at all clear that you’ve done anything wrong – for example, if you live in a house with five adults, who all use the same internet connection, whom can say specifically who downloaded what song? However, because the stakes in these fights are so high, many people will simply pay the trolls something to go away, rather than fight, even if they’ve done nothing wrong.

Copyright trolling is a well-defined phenomenon of the internet age and one that concerns both courts and legislators alike. However, under the current law and damages scheme, it’s pretty difficult for copyright defendants to avoid succumbing to the plaintiff’s demands. Well, that’s not entirely true – you could just avoid the internet entirely and I’m sure you’ll be fine.

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Cathleen A. Dettmann

About the author

Cathleen is a business attorney and a Senior Associate at the firm; her practice is concentrated on business litigation, including franchise disputes, copyright and trademark issues, business break-ups, non-compete and trade secret litigation as well as general contract disputes.


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