Tuesday September 17, 2019

What are Statutory Damages for Copyright Infringement?

Authored by: Marc J. Belliveau Posted in: Intellectual Property

When you sue someone for copying your original work of art, music, drama or fiction without your permission, it’s often difficult, time consuming and very costly to calculate and prove the full amount of your financial losses. Most of that economic information is in the hands of the rogue who ripped you off.

To assist victims of copyright infringement, governments around the world created a regime called “statutory damages”, namely a simple method, perhaps too simplistic, for the court to determine your compensation for the loss. Statutory damages also tend to reduce litigation costs for the plaintiff, encourage the parties to settle early and generally deter further infringement.

A growing concern about their use is that the huge statutory amounts being awarded by judges in civil copyright cases are almost quasi-criminal punishment, without sentencing proportionality considerations and other procedural safeguards which exist in actual criminal prosecutions.

The Canadian Regime

Since 1997, the Canadian Copyright Act allows plaintiffs suing for copyright infringement to elect to recover statutory damages instead of going through the exercise of quantifying actual damages that were suffered or incurred by the copyright owner or actual profits earned by the rogue.

Where the infringement is for commercial purposes, the range of statutory damages starts with a minimum of $500 per work infringed and goes up to a maximum of $20,000 per work infringed. If the infringement is for non-commercial purposes, then there is a cap of $5,000 for all works involved. That cap is an attempt to discourage film and music plaintiffs from suing individuals for their home file sharing activities. For example, a content user (file sharer) who copies 1,000 songs for monetary profit would be liable for up to $2 million in statutory damages, while a content user who copies the same 1,000 songs for personal use only would be liable for up to $5,000 because of the cap.

Canadian courts, in exercising their discretion about what dollar amount in the prescribed range would be a “just” amount to award, are mandated to consider all relevant factors, including: (a) the good faith or bad faith of the defendant; (b) the conduct of the parties before and during the proceedings; (c) the need to deter other infringements of the copyright in question; (d) in the case of infringements for non-commercial purposes, the need for an award to be proportionate to the infringements, in consideration of the hardship the award may cause to the defendant, whether the infringement was for private purposes or not, and the impact of the infringements on the plaintiff; and (e) whether the awarding of even the minimum amount of statutory damages would result in a total award that is grossly out of proportion to the infringement.

The Canadian Experience

So how have Canadian judges fared in awarding statutory damages for copyright infringement since the advent of the internet and the commodification of online content? Do they tend to award the maximum per work, the minimum per work, or some other “just” amount? Let’s see. The following is a compilation of copyright infringement cases and their corresponding statutory damage awards made by Canadian courts since 2006.

As you can see, some general patterns are developing. When works like software and video games are copied for commercial purposes, courts will likely award statutory damages at the highest end of the scale. When the number of works illegally copied for commercial purposes is very high, courts will go below the minimum statutory amount per work to avoid disproportionate or absurd outcomes.

Of course, every case has its own specific circumstances which influence the judge’s calculations, so one must be cautious in terms of award expectations when suing an infringer. For example, in some of the cases listed above, the courts awarded aggravated and punitive damages on top of the statutory damages because of the defendant’s bad faith.

Nevertheless, two other trends also seem quite clear, the amounts awarded by Canadian courts are going up over time and judges are not overly concerned about the “penal” nature of their statutory damage awards for copyright infringement.

If you would like more information about copyright law, please contact our Trademark Agent, Marc Belliveau.

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