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Are You Willing to Pay $22,500 to Download A Song?

Written by Susan Neuberger Weller

The August 23, 2012 decision in Song BMG Music Entertainment v. Tenenbaum, the most recent in this extended litigation, leaves no doubt that individuals who download music and distribute it without proper authorization through peer-to-peer file sharing sites are subject to liability for copyright infringement and payment of substantial statutory damages for doing so. This case began in 2007, when a graduate student, Joel Tenenbaum, was sued by a number of record labels for downloading and distributing 30 songs using file-sharing services like Napster, Morpheus, Kazaa and LimeWire. After a five-day trial in 2009, the jury found Tenenbaum liable for infringing the copyrights in the 30 songs and awarded statutory damages of $22, 500 for each song. After an appeal and remand, the verdict and damages award was allowed to stand, and Mr. Tenenbaum currently owes $675,000 in statutory damages. So how did the jury come up with the $22, 500 as the amount of damages for downloading and distributing one song?

The US Copyright Act gives a copyright owner the option of recovering either statutory damages (assuming the copyright was registered in a manner which allows for the recovery of statutory damages) or proving the actual damages and/or lost profits it has suffered as the result of the infringing activity. Statutory damages have been available as a federal remedy for copyright infringement since the Copyright Act of 1790. Congress at that time realized, and Congress continues to believe, that copyright owners should be given the option of recovering statutory damages rather than actual damages since it is often difficult to measure and prove actual damages. The 1999 amendments to the Copyright Act increased penalties for willful infringement, and were expressly designed to address behavior like that for which for which Tenenbaum was found liable. In making those amendments, Congress found that infringement causes public harms including “lost US jobs, lost wages, lower tax revenue, and higher prices for honest purchasers of copyrighted [works]." H.R. Rep. No. 106-216(1999). The current Copyright Act sets a range of $750 to $30,000 for each act of non-willful infringement and a range of $750 to $150,000 for willful infringement. It is up to the discretion of the judge or jury to decide the appropriate amount of the award under the facts of a particular case. In upholding the $22,500 statutory damages award per work infringed against Mr. Tenenbaum, the court specifically noted that the award was not only within the range of damages for willful infringement, but was actually below the upper limit of statutory damages allowed for nonwillful infringement. Conceivably, Mr. Tenenbaum could have been held liable for up to $150,000 for each of the 30 songs he downloaded illegally.

Awards of this type are not limited to illegal downloads of music, but apply to any act of copyright infringement whether online or otherwise. Although Mark Twain is quoted as having said “Only one thing is impossible for God: To find any sense in any copyright law on the planet,” in the Tenenbaum case it is not that difficult to understand. Simply put, when in doubt, assume that music, a song, a movie, a book, lyrics, photographs, artwork, and other types of tangible works are still protected by a valid and subsisting copyright, whether registered or not, since the life of a copyright is very long.  It is safer to assume you need permission to use it, and find a legal way to do that. Thus, forewarned is forearmed.

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Geri Haight is a Mintz Member and former in-house counsel who focuses on employment litigation, counseling, and compliance, as well as intellectual property and trade secret matters.
Susan Neuberger Weller manages the Trademark & Copyright Practice at Mintz. Susan assists clients with securing and protecting IP assets across the globe. She's worked with clients in a variety of industries, including pharmaceuticals, medical devices, software, electronics, and entertainment.