Careful What You Download - What You Don’t Know Can Cost You

David Abrams, Chilling Effects Clearinghouse, March 05, 2010

Abstract: A second federal appeals court has now eviscerated the “innocent infringer” defense for copyright infringement, this time for residents of Louisiana, Mississippi and Texas. The court concluded that, as long as a copyright notice appears on a physical CD somewhere, anyone who illegally downloads that music from the Internet is subject to the higher $750 statutory minimum damages; even if that person believed he or she had permission to download the material. In 2005, a different appeals court made a similar ruling affecting residents of Wisconsin, Illinois and Indiana.

Under current U.S. copyright law (17 U.S.C. 504), the owner of a copyrighted work found to be infringed may seek either "actual damages" equal to the financial loss he or she suffers as a result of the infringement or "statutory damages," of $200-150,000 per work infringed. Where the actual damages are small or where it is difficult to prove the amount of harm, the copyright owner will choose the statutory damages. This is especially true in the case of infringement caused by downloading a song without permission. While the actual loss to the copyright holder per song might be as little as $0.70 (based on the cost of downloading the song from iTunes), the federal copyright statute requires a minimum statutory penalty of $750 per song and a judge or jury may increase that penalty up to $30,000 (or even up to $150,000 per song if the copyright owner proves that the infringement was committed willfully).

Clearly these are very serious penalties, particularly since in the peer-to-peer context, it is rare to be sued for infringing only a single song, so even the minimum statutory damages can reach into the thousands or tens thousands of dollars for a defendant found liable for copying only a handful of songs. In addition, it is no defense to claim that you did not know the songs were protected by copyright or that you believed you had permission to download the songs. Copyright infringement is a strict liability offense, all the copyright owner needs to prove to obtain damages is that the work was protected by copyright, that you made a copy of the work and that he or she did not authorize that copy. It does not matter that you did not intend to do anything wrong.

To ameliorate somewhat the extreme damages that could result to an innocent infringer, Congress provided that if the defendant can show he or she “was not aware and had no reason to believe that his or her acts constituted an infringement of copyright, the court in its discretion may reduce the award of statutory damages to a sum of not less than $200 [per work infringed].” As the House Committee on the Judiciary explained in its 1976 report on the law, the purpose of including this provision in the statute was "to protect against unwarranted liability in cases of occasional or isolated innocent infringement" while "preserv[ing] its intended deterrent effect." In 1988, Congress amended copyright law to make placing a notice of copyright on sound recordings optional; however, it also added a section which eliminated the innocent infringer reduction to the minimum statutory damages if "a notice of copyright in the form and position specified by this section appears on the published phonorecord or phonorecords to which a defendant in a copyright infringement suit had access."

In the recent decision by the Court of Appeals for the Fifth Circuit (with jurisdiction for federal appeals in Louisiana, Mississippi and Texas), the defendant Whitney Harper was accused by several music companies of sharing their copyrighted sound recordings on a peer-to-peer network. Harper, who was between 14 and 16 when she downloaded the songs, had claimed that she did not understand how file sharing worked and that she believed that listening to music on a file sharing network was no different than listening to an Internet radio station. A lower court found that Harper had infringed 37 of the plaintiffs’ audio files, but that a jury could find that her claim that she was unaware that this constituted copyright infringement was plausible, subjecting her to "innocent infringer" statutory damages of $200 per song ($7,400 total) rather than $750 per song ($27,750 total). On appeal, the Court of Appeals reversed the lower court’s ruling, concluding that because there was no disagreement that the original CDs from which the songs had come from contained a copyright notice, Harper could never claim the innocent infringer defense. The court held that as long as there was a CD somewhere with the copyright notice on it that Harper could have sought out and looked at, she was responsible for the higher $750 minimum per song damages. The Court of Appeals for the Seventh Circuit came to the same conclusion in a similar case in 2005. Both courts assumed without discussion that the word "access" in the statute refers not to the defendant making an illegal copy of the song from a CD with a copyright notice on it, but merely that a copy of the CD with the notice on it exists in a store somewhere in the country. In addition, neither court considered the changes in technology between 1988 and 2005 (or 2010) that have made the primary method of music distribution electronic rather than physical.

The problem with these decisions is that they eliminate innocent infringer protection for all music downloads, thus ignoring Congress' stated purpose in creating the defense. With few exceptions, every commercially released song is available somewhere on a CD bearing a proper copyright. However, people no longer obtain all their music by buying a CD. Consumers download songs from iTunes, other online music stores and from artists' and publishers’ web sites never seeing the original CD. Consumers do not think they are infringing not because they do not know the songs are subject to copyright, but because they believe they have permission to download the copy. However, there is no way, short of becoming an expert in copyright law or hiring a lawyer, for them to verify this. Web sites such as http://musicmp3.ru/ sell music that is likely infringing while assuring their customers that the songs are legal to download (but only under Russian law). If consumers can prove they had a sincere and reasonable belief that they were not committing infringement, they should be protected from the full brunt of the law. The appeals courts’ rulings preclude this, putting the burden on users to somehow determine not only whether they have permission to download a song, but also whether the song has been properly licensed from its copyright holder in the first place.