No More Statutory Damages = No More Copyright Problems? – by “Max C.”

From an HLS 3L, Jason Harrow:

[I]t became clear to me that the one change in the law that will solve the most problems in the simplest way is reform of statutory damages…

Here’s the current scheme in a nutshell. The Copyright Act has two ways that plaintiffs can recover damages in a case of infringement. The first way is the way plaintiffs recover in almost every other civil case: a copyright holder can recover his actual damages and lost profits. But there is also a unique second measure of damages that plaintiffs can recover instead: something called “statutory damages” that can range from $750 to $150,000 per work infringed, constrained only by what a judge or jury “considers just.” There are currently several major fights about just how far such damages can go, like whether you can recover over $600,000 against a regular filesharer who earned no profits and caused no measurable harm, or whether you can recover damages that run into the trillions against the operator of LimeWire. But even if there are some limits in the most extreme cases, the threat of astronomical damages, even when a copyright holder has not shown that infringement has caused him any harm at all, is a very scary prospect.

Last week, Professor Stark asked us to share our thoughts on the single thing we’d most like to see fixed in intellectual property— and I don’t think any of us suggested this one. It seems pretty reasonable from an infringer’s point of view (read Jason’s full post to see the list of problems it solves), but pretty unfavorable to a license holder. It places a heavy burden on the license holder to go out and actually sue everyone to recoup lost profits— statutory damages both discourage infringement with a heavier penalty and provide more money to the license holder even if he or she can’t catch every infringement.