Thursday, May 28, 2009

Sotomayor: copyright statutory damages must be sufficient to deter infringement

Shourin Sen of Exclusive Rights is following through on his promise to post all of Supreme Court nominee Sonia Sotomayor's IP opinions, further confirming that the former copyright and trademark litigator has a deep understanding of the issues in this field. I've skimmed the copyright cases Sen has posted so far, and I'm impressed by her careful and thorough approach, as well as her fidelity to the statute and case law.

A few interesting tidbits:

In Top Rank, Inc. v. Allerton Lounge, Inc., 1998 WL 35152791 (S.D.N.Y. 1998) then-District Judge Sotomayor rejected the magistrate judge's report and recommendations on statutory damages as insufficent, stressing the need for deterrence:
The Court agrees with the Magistrate Judge that the facts of this case do not warrant a high end statutory damage award. A wilful infringement, which the Magistrate Judge found, combined with a wilful default, however, warrant an award greater and more significant than one which corresponds so closely to an estimated loss to the plaintiff. The Court agrees with the defendants that statutory damages must be sufficient enough to deter future infringements and should not be calibrated to favor a defendant by merely awarding minimum estimated losses to a plaintiff.
In Peer Int'l. Corp. v. Luna Records, Inc., 887 F.Supp. 560 (S.D.N.Y. 1996), Judge Sotomayor imposed liability on the owner of the defendant corporation -- personally:
[2] Individuals who have the right and ability to supervise infringing copyright activities and a direct financial interest in such activities are not shielded from liability even though they have no actual knowledge of the infringement. The Second Circuit has held that the imposition of vicarious liability, even in the absence of actual knowledge, on those who fail to supervise the conduct of primary infringers better effectuates the policies of federal copyright law. Gershwin, 443 F.2d at 1162; Shapiro, 316 F.2d at 307.

[3] The statements Abel De Luna made while being deposed indicate that he is vicariously liable, jointly and severally with Luna, for any copyright infringement committed by Luna. He is president of Luna, and he concedes that he “determine[s] what is done and what isn't done in the corporation.” De Luna Dep. at 12, 21, 150. He is also Luna's sole shareholder and director. De Luna Dep. at 12-13, 21. Moreover, Abel De Luna admits that he did nothing to stop the distribution of the compositions at issue after he was served with the Complaint in this action. De Luna Dep. at 66-68, 154-55. I therefore find that Abel De Luna is individually liable for Luna's copyright infringement because he had the right and ability to supervise Luna's activities and a financial interest in the exploitation of the copyrighted materials.
And again she recognized that statutory damages are about deterrence -- not only compensation for actual loss:
Congress's provision allowing for a greater award where willful infringements are found, however, indicates that statutory damages serve the dual purposes of the Copyright Act-compensation and deterrence.
Because of defendant Abel De Luna's willful infringement of plaintiffs' copyrights and his continued infringement after the initiation of this action, I find that substantial statutory damages are warranted to deter him from future misconduct.
I look forward to reading the rest of Judge Sotomayor's copyright opinions. So far, I like what I see.


  1. I agree with you, Ben. What a pleasure it will be to see someone with this detailed level of experience and understanding of the true objectives of copyight law in this country on the high court.

    One of the problems I believe we have in this country (not often written about for obvious reasons) is far too few federal judges who really understand intellectual property law, and, worse yet, if they do not, how many do you think will admit it?

    George Riddick
    Imageline, Inc.

  2. Sotomayor:
    "Individuals who have the right and ability to supervise infringing copyright activities and a direct financial interest in such activities are not shielded from liability even though they have no actual knowledge of the infringement. "

    How does that square with "Safe Harbor"?

  3. @ Anonymous 7:35:

    The DMCA safe harbors apply only to Internet conduits, hosts, and search engines that follow certain specific rules. The Peer v. Luna case had nothing to do with the Internet. The language you quote is simply the traditional standard for vicarious infringement.


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