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I have heard stories about patent holding companies acquiring patents and harassing legitimate businesses that might be inadvertently infringing on the patent. But I thought this did not happen in the copyright context. That is why I was shocked when I was forwarded a link to Dan Heller’s article which explains how being infringed is good for a photographer’s business. Heller points to a news story about Corbis’ lawsuit against TemplateMonster which resulted in a $20 million judgment for Corbis and tells photographers whose photos have been infringed that they may be “sitting on a pot of gold”. He points out that statutory damages awarded in this case ($30,000 per photograph infringed) is not likely to have any relation to the actual damage suffered by Corbis. To quote Heller: “one could license the same kinds of images on microstock sites for $1 to $10”. Heller goes on to explain that in order to get statutory damages photographers should register their works and watermark their digital photos. He also explains the pros and cons of using web crawlers to detect infringing uses on the web.
Heller’s suggestions are based on exploiting inequities in current law of statutory damages. Under current law, a copyright owner whose work has been infringed can elect to recover statutory damages instead of actual damages suffered as a result of the infringement. A judge has the discretion to award any amount between $750 to $30,000 as statutory damages for each work infringed. If the infringement was willful, that is if the copyright owner proves that the defendant knew that he might be infringing, this award can be increased up to $150,000. This already high amount can go up further depending on the number of works infringed. For example, if I copy one CD and share it with my friends the $750 to $30,000 range applies. If I infringe two CDs, the same award can be multiplied by two. The case of Jammie Thomas, the Minnesota woman who was ordered to pay $222,000 for sharing 24 songs on a P2P network shows how high statutory damage awards can be.
The purpose of statutory damages is to ensure that copyright owners are compensated in situations where actual damages are hard to prove or are so low that owners would not sue to recover them. While deterrence is one of the purposes of statutory damages, giving a windfall to the copyright owner is not. Yet many statutory damages awards are extremely high and unwarranted by the nature of the infringement. Statutory damage awards have been increased twice since 1976, when the current copyright law was written. In 1976, the award was set at $250 to $10,000. An amendment in 1988 increased this range to $500 to $20,000. Another amendment in 1999 further increased the range to $750 to $30,000. Congress is now considering a piece of legislation that contains a provision that would further increase statutory damages awards. You can read Sherwin’s analysis of this provision here. Instead of further increasing the amount of statutory damages that copyright owners can recover, Congress should consider reigning in the statutory damages regime to reflect the actual damage suffered by copyright owners. Then people would not advocate that being infringed is good for business and there would be no copyright trolls.