Chara Curtis, Cynthia Aldrich, and Alfred Currier wrote and illustrated three children’s books, How Far to Heaven?, Fun Is a Feeling and All I See is a Part of Me. The copyrights on the books are registered. Illumination Arts, Inc. (IAI) published the books under a publishing contract, beginning in 1989. IAI paid royalties until September 30, 2009. After that IAI stopped paying regular royalties, making only one subsequent royalty payment. The authors demanded that IAI resume paying royalties. When IAI still failed to pay royalties, the authors terminated the publishing contracts with IAI and requested to buy the books in inventory. IAI refused to sell the inventory books to the authors. Prior to the authors’ contract termination, IAI made the books available to consumers in electronic form, even though it was not authorized to do so under the publishing agreements. IAI continued to make copies of the books, sell the books and display them online after the authors terminated the publishing contract, despite the authors’ demands to cease such activities.
The authors filed a lawsuit against IAI and its successor, Illumination Arts Publishing, LLC (IAP) in federal court in the Western District of Washington. The authors alleged breach of contract and copyright infringement and sought an injunction against IAI and IAP. This post addresses only the copyright issues. In the authors’ first motion for summary judgment, the district court held IAI, IAP and two of their officers directly liable for copyright infringement and for willful copyright infringement. The district court granted the authors’ motion for a permanent injunction and ordered the defendants to return all infringing copies of the books to the authors. The authors’ second motion for summary judgment, and the subject of the rest of this post, asked the district court to award the authors $150,000 for each work infringed, the maximum statutory damages for willful copyright infringement. (17 U.S.C. §504(c)(1)-(2)).
Maximum Statutory Damages for Willful Copyright Infringement
A copyright owner may elect to recover statutory damages, rather than actual damages and additional profits of the infringer, ‘in a sum of not less than $750 or more than $30,000’ for each copyright infringed. See 17 U.S.C. § 504(c)(1). If the copyright owner proves that the infringement was willful, the Copyright Act authorizes enhanced statutory damages of up to $150,000.00 per infringed work. See id. § 504(c)(2).
(Order 2 pdf page 10).
A plaintiff may elect statutory damages without establishing her actual damages or the amount of the defendant’s profits. Statutory damages are both compensatory, to remunerate the plaintiff, and punitive, to discourage infringement. When the plaintiff elects statutory damages, it is in the court’s discretion to award any amount between the minimum and maximum set out in the statute. Consideration of what is just in that case, the nature of the copyright and the circumstances of the infringement guide the court’s decision in awarding damages.
The authors argued that the defendants’ particularly egregious behavior in infringing the authors’ copyrights and the defendants’ obstructionist behavior during discovery supported awarding the statutory maximum. Defendants did not refute the authors’ statutory damages arguments.
Despite the fact that Defendants have offered virtually no response to Plaintiffs’ motion for summary judgment, the determination of whether Plaintiffs are entitled to an award of maximum statutory damages for willful copyright infringement is inherently discretionary, and therefore the court cannot enter summary judgment on this issue. The court’s conclusion in this regard arises out of the logical extension of a 1998 Supreme Court decision. In Feltner v. Columbia Pictures Television, Inc., 523 U.S. 340, 355 (1998), the Supreme Court held that a claim for statutory damages under § 504(c) of the Copyright Act, 17 U.S.C. § 504(c), is a suit at law to which the Seventh Amendment applies.
(Order 2 pdf page 12).
The Seventh Amendment provides the right to trial by jury in suits at common law. For copyright cases, the Supreme Court has interpreted the Seventh Amendment to provide a right to trial by jury regarding both liability and the amount of damages. The jury need not resolve every issue in a copyright case, though.
When there are no disputes of material fact with respect to an issue in a copyright action, the court may enter summary judgment without transgressing the Constitution. Thus, this court could and did enter summary judgment with respect to the issues of copyright infringement and willfulness because there were no disputes of material fact with respect to those issues.
(Order 2 pdf page 13).
Imposing maximum statutory damages inherently involves exercising discretion by the fact finder. When the plaintiff requests only the minimum statutory damages, the court can decide the issue on summary judgment. The district court denied the authors’ motion for summary judgment on the maximum statutory damages for defendants’ willful copyright violations, indicating that the court must reserve that issue for the jury.