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MPAA, RIAA Against Lowering $250,000 Max For Copyright Statutory Damages

Posted by: , 21:53 AEDT, Sat November 23, 2013

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Amid calls for reduced statutory damages for copyright offenses, the MPAA and RIAA have issued their support for the current system which saw a single mother fined $1.92 million for sharing 24 songs
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Responding to the call for comments by the Department of Commerce's Internet Policy Task Force, the top copyright lobbyists of the music and film industries have rejected a call to lower the maximum amount set for copyright infringement statutory damages.

Under current copyright laws, reward for damages to the wronged party can consist of actual damages, the actual calculable losses incurred by the plaintiff, and a separate component called statutory damages that is used to estimate possible and potential damages. The rationale behind statutory damages is that it may often be difficult to calculate with precision the number of instances of infringement and actual losses, and statutory damages allows rights holder to more quickly establish potential losses.

Under current copyright laws in the U.S., statutory damages can be anything from $200 per work to the maximum of $250,000 per work for "willful infringement", rewarded at the discretion of the court.

A couple of high profile cases however have highlighted a perceived unfairness in the amount of statutory damages being rewarded against individuals, often to billion dollar industries. Even some judges have been critical of the sums being totaled based on statutory damages, one infamous case found that the calculations used would have led to a possible $75 trillion in damages, greater than the GDP of the entire planet.

Which is why the Department of Commerce's Internet Policy Task Force, earlier this year, published a Green Paper that called for feedback and urged a "recalibration" of damages amounts.

As part of their response to this recommendation, the MPAA (Motion Picture Association of America) and the RIAA (Recording Industry Association of America) have issued a strong rejection for the need for change, arguing that the currently set amounts are working well to deter others from "similar misconduct". This is despite studies, some of them paid for by the MPAA, showing that the piracy problem has not abated even after high profile court cases involving high statutory damages amounts.

"Statutory damages play an essential role in redressing the financial harm caused by such infringement and punishing the wrongdoers," wrote the MPAA in their response.

The music industry agrees. 

"Statutory damages must be meaningful, serving as a deterrent beyond mere restitution. And the law recognizes the need for flexibility within this statutory damages construct, and provides juries with wide discretion to determine the appropriate award," the RIAA added.

The RIAA, having being at the other end of the aforementioned high profile court cases, also defended those judgments (initially $1.92 million and $675,000, against a single mother and a college student respectively) as "entirely appropriate, based on the facts of each case."

Digital and consumer rights groups, which also contributed responses, argued for a drastic reduction in statutory damages, saying they have contributed to the phenomenon of "predatory" lawsuits. Predatory lawsuits are also known as copyright trolling, whereby companies extract "pre-trial settlement" amounts often in the thousands of dollars from Internet users, using the threat of large copyright fines based on statutory damages calculations.

"The current structure of statutory damages gives Predatory Enforcers (PEs) the weapons they need to extract significant settlements from accused infringers without regard to the truth of their allegations or the harm of the alleged infringing, just as Righthaven and Prenda did," noted copyright lawyer Andrew Bridges in his response.

"One need only allege that there was copying in order to seek a subpoena unmasking anonymous online defendants, at which point PEs can send letters threatening maximum damages of up to $150,000 per infringed work and extract settlements without proving infringement, much less any harm."

Bridge recommends that statutory damages for non-commercial copyright offenses be limited to $100 to $5,000 per offense, following the changes recently set by Canada.

A further round of comments will be sought after a public meeting on the issues discussed in the original Green Paper on December 12.


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