IP: Statutory damages and constitutional limits

Examining the decision in Sony BMG Music Entertainment v. Tenenbaum.

The Copyright Act provides plaintiffs the opportunity to recover statutory damages in lieu of actual damages. The amount of statutory damages that a plaintiff can recover ranges from $750 to $150,000, depending primarily on whether the infringement was innocent or willful. In a situation involving peer-to-peer file sharing where a defendant may have downloaded and shared hundreds and thousands of copyrighted works, a statutory damages award (particularly where it is found that the infringer was acting willfully) can soar into the millions of dollars.

In Sony BMG Music Entertainment v. Tenenbaum,100 U.S.P.Q.2d 1161 (1st Cir. 2011) the 1st Circuit discussed a possible constitutional due process restraint on such an award, but ultimately held that resolution would have to wait for another day.

The first was whether the due process standard for statutory damage awards articulated by the Supreme Court in Williams was applicable. The second was whether, assuming Williams did not apply, whether Gore, or a combination of Williams and Gore, or something else was the due process standard. The 1st Circuit examined both decisions to point out the nature of the question that the district court could have avoided.

In Williams, the Supreme Court considered a challenge to an Arkansas statute that subjected railroads to penalties within a certain range. A lawsuit resulted in an award within the statutory range. The railroad challenged the statutory award as unconstitutionally excessive in violation of due process.

First, there is or may be a material difference between the purposes of statutory damages under the Copyright Act as opposed to the purpose of punitive damages. 

Second, there may be a difference in the “limits or contours of possible ranges of awards under the different standards.” 


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Lincoln Bandlow

Lincoln Bandlow is a partner in Lathrop & Gage’s Los Angeles office. He practices sophisticated business litigation and specializes in litigation media, First Amendment, intellectual...

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