In Episode 35 of the “Law & Business” Podcast, Anthony talks (all by himself) about why a person or business must register a copyright in a work that qualifies under copyright law.
Yes, the Supreme Court recently ruled that a copyright infringement lawsuit can only be instituted after registering a copyright. That blog post was already written.
However, Anthony is all by himself in Episode 35 of the “Law & Business” Podcast in order to discuss all the reasons why one needs to file a copyright and have that registration.
- The requirement to have the registration before any lawsuit is started.
- Statutory damages.
Ease of cataloging, licensing and assigning. This is a thought that not many people have. If a work is registered, then there is a registration number. That number is a simple reference in licensing, use, sale, and transfer agreements.
Damages. Statutory damages require the registration.
Only a person or business who has registered a work with the U.S. Copyright Office before the infringement (or within three months of publication) may receive statutory damages.
Statutory damages are damages that can be awarded by a judge or jury to a copyright owner in a copyright infringement suit. They are called “statutory damages” because the range of damages is established by the statute, specifically section 504 of the Copyright Act. Statutory damages are usually between $750 and $30,000 per work, as determined by the court. However, the damage amount can be increased up to $150,000 per work if the infringement is found to be willful (intentional). If the infringement is “innocent,” meaning the infringer did not know they were violating copyright law, the damages can be reduced to a minimum of $200 per work (if the work did not contain a proper copyright notice).
Statutory damages are awarded “per work” infringed (i.e., each individual copyrightable work, like a single song, book, or photograph). This means that if five songs, or five photographs, are infringed, the copyright owner would be able to recover a statutory damage for each one, for a total of five awards. So statutory damages of at least $750 per work, for five works would yield a minimum (non-innocent) total award of $3,750 ($750 x 5 songs = $3,750) or a maximum (non-willful) award of $150,000 ($30,000 x 5 songs = $150,000).
Awards of Actual Damages in a Copyright Infringement Case.
Sometimes known as compensatory damages, “actual damages” consists of the dollar amount of any demonstrable loss the copyright owner suffered as a result of the infringing activity. This loss may be from lost sales, lost licensing revenue, or any other provable financial loss directly attributable to the infringement.
17 U.S.C. § 504(b) provides: “The copyright owner is entitled to recover the actual damages suffered by him or her as a result of the infringement, and any profits of the infringer that are attributable to the infringement and are not taken into account in computing the actual damages. In establishing the infringer’s profits, the copyright owner is required to present proof only of the infringer’s gross revenue, and the infringer is required to prove his or her deductible expenses and the elements of profit attributable to factors other than the copyrighted work.”
Usually, plaintiffs in infringement actions would offer expert testimony to establish their actual financial damages to the court.
Awards of Infringer’s Profits.
This second form of damages consists of any money made by the infringer as a result of the infringement. These damages are awarded only if they exceed the amount of profits lost by the copyright owner (actual damages) as a result of the infringement.
Here is a lightly-edited transcript of the podcast episode:
Welcome to another episode of the Law and Business podcast.
I’m Anthony Verna. I’m here by myself today because we’re going to be talking a
little bit about copyright registrations. The last blog post on my blog at Vernalaw.com
discussed a little bit about the Supreme Court’s March 4th, 2019 decision,
effectively rendering section 4- 11a of the copyright act to be ironclad and
stating that yes, one does need a registration to walk into federal court on a
copyright infringement suit. So, we’re gonna take a look at that a little bit
more. We’re going to take a look at all of the reasons why somebody needs to
have a copyright registration, then that is now a certificate from the
copyright office of the Library of Congress in order to start a copyright
infringement suit. But there are some other reasons as well.
So, let’s take a a look at that. To begin with, any work that falls under copyright law is traditionally what we would call art. So literary work, photographs, paintings, in today’s world what we do is we take computer code and we call that software code a literary work. So, this way software falls under the copyright scheme and it’s important that if there’s going to be any rate asserted in these works that fall under copyright law, that the owner has that registration. Number one, I think it’s good business practice to begin with. If you are licensing any of your work, if you are selling any of your work, if you’re using your work to make money, you are able to refer not just by title, not just by as an exhibit in an agreement, but also by the title that you give it in the copyright office as well as its registration number. It’s easy reference in any kind of agreement. So, whether that agreement is a licensing agreement, it’s a sales agreement, maybe just a use agreement without any kind of monetary value to it.
It’s easy reference to have that registration. Now generally I always say it’s a one-to-one relationship. One copyright registration is one work and whether that work is a literary work. And I had a client that was filing books and eventually each of the chapters of the book was separately available online. So therefore, one work changed from a book to maybe a chapter. And then this way if the chapters had to be updated, they’re updated. But, one registration, one work. I’m not a big fan of collections of registrations in order to register the work and protect the work. The one real exception that courts have agreed to is in photography. And that is because in today’s world you can take a camera, push a button and push a button often and have many similar photographs and just take a lot of photographs at once. So, take all those photographs, put it on a DVD and yes, you can record that DVD and protect all of those photographs as one. It really is the only medium that courts have allowed to get around that particular one work for one registration number rule.
So, I like that registration for the ease of referral. But also, now we have the Supreme Court ruling and the Supreme Court ruling states that that registration certificate must be in your hand before starting a copyright infringement lawsuit. So, why is that? Well, section 4-11 a of the Copyright Act says no civil action for infringement of the copyright of any United States work shall be instituted until preregistration or registration of the copyright claim has been made in accordance with the title. And I’m not going to dwell on that word, preregistration, because preregistration again applies to very few industries where a work is vulnerable to pre-distribution infringement, movies, music, those are big examples of where preregistration can exist. But let’s put that aside cause most of us listening aren’t going to be worrying about preregistration. Registration for that copyright claim has to be made. Well, there were two thoughts in appeals courts in the United States until March 4th, 2019 and one thought was exactly what the Supreme Court ruled, that a court will not be able to sit and hear this case until that registration is in hand.
It makes perfect sense. That’s what it says. But some courts, they had a minority view. Certainly the 11th circuit court of appeals did and I believe it was maybe the fourth circuit, there were a couple others and they said, well, if you walk into the copyright office and you file and you apply for that trademark, that copyright, excuse me, and you’ve paid your application fee for that copyright, that’s acceptable and we will hear your case. Even though you don’t have a registration certificate, you’ve applied for it. Now, I’m not going to sit here and say, I haven’t tried that particular move myself because from a practical standpoint, I’m going to file my copyright. I’m going to calculate the time that it’s going to take to get the copyright. And by the time that the other side files a motion to dismiss, the judge rules on it, you get a chance to replead your case, by then you’ll have a copyright certificate and maybe the parties will have to talk settlement.
So, I’m not going to sit here and say I haven’t justified moves with that particular minority view, but that minority view was eradicated on March 4th, in this particular case. And the reason for that is because the statute is very clear. Registration of the copyright claim has been made, right. That’s very clear. And then the next section does cover instances in which registration is refused. So, the application process is still just a process, even though it’s kind of a lax process, not a lot of copyright applications are refused. So, in looking at really a way to get to some kind of I don’t want to say a quality, but to get to some kind of just result, a lot of judges were overlooking the bureaucratic process and were just happy with that application fee. But again, Supreme Court says no, that’s not how we read it. Nine to zero unanimous decision doesn’t matter. Their political bent doesn’t matter. Their socioeconomic economic bent, all of the justices of the Supreme court said registration, that has to be in hand.
So, now you have to have your registration to not just review and refer to it. You have to have your registration to walk into court. And if you don’t, your case will be dismissed. Now, yes. What’s the effect if you say have a hundred copyrights that are registered and you’ve got twenty five and they haven’t been registered yet, is your case really going to be thrown out if all hundred are in there? That particular thought and that situation doesn’t appear to truly be anticipated. And I think that we’re going to probably have to have some other ruling that talks about multiple copyrights and what happens when multiple copyrights are infringed and some registrations just have not been procured yet even though many have. So, that that’s probably going to be coming down the road, although I would suspect if they’re going to be consistent, it’s either an all or nothing type of deal.
The third reason that you want to register your copyright is that damages are important and the types of damages that an infringed party is allowed to ask for are limited without the registration. So, let’s talk about all of the rights if your copyright registration is filed, registered and then infringement happens. Well you ask for actual damages and we’ll get to actual damages in a second. You can ask for attorney’s fees. You may or may not get attorney’s fees. You can ask for statutory damages. And if the order of items is that one, the work is created, two, copyright in the work is registered. And then three, infringement happens, you are entitled for statutory damages. The other aspect that I say is make sure that when the data’s created and published or the date of the work is created and published, make sure that you filed that copyright within three months to really shore up your statutory damages claim.
So again, you’re going to receive statutory damages when either your registration is within three months for the publication of the work or before the infringement starts. Statutory damages can be awarded by a judge or jury to a copyright owner and in suit, this is specifically done in section five o four of the Copyright Act and statutory damages are between $750 and $30,000 per work as determined by the court. The damage amount can be increased up to $150,000 per work infringed if that infringement is found to be willful, intentional is a good synonym for willful. If that infringement is innocent, meaning the infringer did not know that they were violating copyright law, the damages can be reduced to an amendment minimum of $200 per work. But that’s really only if the work did not contain a proper copyright notice.
So statutory damages are awarded per work. You heard me say that earlier per work. In other words, each work, like a single song, single book, a single photograph, you know, every single registration that you have is going to make that determination. So, if you have five songs, five photographs, five paintings, five pieces of software, the copyright owner could go from $750 per work, which is only $3,750, up to a maximum reward of $150,000 per song. Sorry, excuse me, up to $30,000. So, if it’s five works $150,000. And statutory damages are important because the alternative type of damage award is actual damages. And we’ll talk about those in a second. And those have to be proven in court. They can be difficult to establish. Actual damages include profit lost,
include profits the copyright owner lost, any additional profits the infringer received. So, this calculation can be very helpful, especially if the infringed party has a hundred copyrights, as I was saying. So, it really does behoove businesses and people that put out works that fall under copyright law to truly consider that registration because statutory damages is an easier calculation for when it’s infringed. The other awards that I would look at are your actual damages and actual damages do exist even if infringement happens before registration of a copyrighted work. But as you’ll see, it’s harder to calculate. All right, so we’re going to calculate actual damages as lost revenue as a result of the infringer taking the work and reproducing it. So, you know, the calculations aren’t perfect. I mean, you could argue that your sales went down by a certain percentage
although there’s not really a clear causation between sales and one particular action. So, that’s very difficult. The second form of damages consists of any money made by the infringer as a result of the infringement. And these damages are awarded only if they exceed the amount of profits lost by the copyright owner. So, again, you’re going to go through a lot to see what your damages are. You’re going to try to put everything together, but ultimately having that registration gets you the easier calculation, especially if you can show that it’s willful. And so why do you have to register a copyright? Because in the United States, the statute says that you do not have access to court without the registration. So, number one, you registered because you have to. In order to enforce any rights that you have in it, you need that registration. I always point out that you do want to refer to it easily and referring to it easily and simply means having that registration, the number, the title, any licensing is easy. Any use agreement is easy. And three, if there’s an infringement, you do want statutory damages, you do want to be able to try to claim that a the copyright is willful. You do want to try to aim for the stars. You can’t do that otherwise.
So, I hope that this clears up some of the potential misconceptions. And frankly, I think our system was a little at fault as well, for why copyrights are or why that need is there, but, now we have this ruling from the Supreme Court. It’s very solid. And I would just say if you’re not registering copyrights, you should certainly take a look at your business’ work and make sure that if it falls under copyright law, that you’re protecting it properly, else you really will be hurting for the types of damages that really would justify a copyright infringement suit. Again, I’m Anthony Verna of Verna Law. Thank you for listening to the Law and Business podcast. We’ll be back with some other episodes soon. Take care.