|
| ||||||
|
10/24/2003 |
||||||
|
E. Scott Johnson Appeared in The Daily Record Two recent copyright decisions by the U.S. District Court for the District of Maryland demonstrate that damage awards for copyright infringement can vary dramatically, from no recovery for an NFL team's substantial commercial use of an infringed logo design, to nearly $20 million in statutory damages for internal use of a financial newsletter for which the defendant had a subscription. For those using copyrighted works, such as software, textual materials, photographs or graphical images, now is a good time to review internal policies regarding such uses in light of the recent decision involving Legg Mason. The Baltimore Ravens case teaches owners of copyrighted works that not every infringement will produce a major recovery. Both cases highlight the significance of timely copyright registration. On October 3, 2003, a jury in the U.S. District Court for the District of Maryland ordered Legg Mason to pay $19.7 million to Lowry's Reports, Inc., a small publisher of stock market analyses, based on Legg Mason's unauthorized copying of Lowry's New York Stock Exchange Market Trend Analysis, a daily and weekly financial newsletter, for internal circulation on Legg Mason's intranet, and internal distribution of hard copies and e-mail copies to its research department. The Fourth Circuit Court of Appeals recently upheld the Maryland District Court's decision that even though the Baltimore Ravens infringed the copyrighted logo designed by Frederick Bouchat, a security guard who claimed to have designed the original Baltimore Ravens logo in 1996, it didn't have to pay Bouchat anything for the infringement. The court concluded that purchasers of Ravens t-shirts, caps, and other merchandise would buy whatever official team merchandise was offered, irrespective of the logo design. Because Bouchat failed to prove that any of the profits from the sale of Raven's merchandise was attributable to the infringed design, he received nothing. Mr. Bouchat did not initially seek monetary compensation for the use of his design. He requested only a letter of recognition, and a signed Ravens helmet. Instead of thanking Bouchat for the design and giving him the helmet, the Ravens produced merchandise sporting a very similar design, denying the new logo incorporated Mr. Bouchat's artwork. Mr. Bouchat sued the Ravens, no doubt anticipating a significant recovery. Legg Mason purchased a subscription to Lowry's financial newsletter, but overused it internally by posting it on its intranet and e-mailing or faxing copies to employees in its research department. The Ravens appropriated Mr. Bouchat's artwork for commercial use, unwilling to say thanks or give him the signed helmet he had requested. So why does Legg Mason have to pay nearly $20 million while the Ravens pay nothing? There are several reasons why these damage awards are so different. For one, Lowry's elected statutory damages. Under the Copyright Act, a plaintiff may elect statutory damages in lieu of actual damages and infringers' profits, in accordance with the range of damage amounts set forth in the Copyright Act, irrespective of whether any damages or profits are provable. Because each newsletter was a separately copyrighted work, after establishing the infringement, Lowry's was able to multiply by the number of issues infringed, and the jury was required to award at least $750 and up to $30,000 for each infringed newsletter. In cases of "willful" infringement (arguably all infringement is willful to some degree), statutory damage awards can be increased to as much as $150,000 per infringement, in the discretion of the court or jury. In the Legg Mason case, the jury concluded that many of the infringing acts, notably those that occurred after Lowry's notified Legg Mason of the infringement, warranted higher statutory damage awards. Contrast the Legg Mason award with the Ravens award, in which the plaintiff elected infringer's profits rather than statutory damages. In that case, Bouchat hoped to receive the profits, or a substantial portion of profits, from the sale of Ravens merchandise. Unfortunately for Mr. Bouchat, even though he established liability for the copyright infringement, and even though, had he been eligible to elect it, he would have been entitled to a statutory damages award of up to $150,000 if the infringement was determined to be willful, he was unable to establish that any of the profits from the sale of Ravens merchandise was due to the logo and he walked away empty-handed. Had the plaintiff in the Legg Mason case been required to prove "profits attributable to the infringement," it likely would not have been able to do so. For Lowry's, the availability of statutory damages was the first key to its huge recovery; that a jury determined the award was the second key to its size. Mr. Bouchat would have been eligible for a statutory damages award only if he had registered the infringed work with the U.S. Copyright Office prior to the commencement of the infringement. These vastly different awards should give pause to those who regularly use copyrighted works. When using copyrighted works, including purely internal uses where it may be difficult to prove profits attributable to the usage, one risks a significant jury award if the use is not excused under an "implied license" or as a "fair use" (each a defense to a copyright claim, and not a license to infringe). On the other hand, a copyright owner whose work is infringed cannot assume the copyright registration is a winning lottery ticket. In addition to the wide range of awards, a comparison of these cases highlights the significance of early copyright registration, providing the copyright owner an opportunity to elect statutory damages, which can be critical in cases where it is difficult or impossible to establish profits attributable to the infringement. |
||||||
|
Ober, Kaler, Grimes & Shriver Maryland
Washington, D.C. Virginia
|
||||||
