What Is Copyright Infringement Damage Theory and Methodology?

Copyright Infringement Damage Theory and Methodology refers to the theory and approaches toward determining actual and statutory damages in copyright infringement lawsuits. This field of study is primarily geared toward copyright law practitioners and their supporting staff. The ability to accurately determine damages is of prime importance to both the plaintiff and the defendant.

The first step in calculating potential damages in copyright infringement is determining if the infringed work has been registered with the copyright office. Although all creative works are protected by copyright law, works registered with the copyright office have greater protection. This protection extends to the type of damages that can be claimed.

Copyright infringement plaintiffs can claim two types of damages:

• Statutory Damage - can not be claimed if the work was not registered with the copyright office
• Actual Damages - can be claimed whether or not the work was registered

In most cases, the plaintiff in a copyright infringement lawsuit will choose to pursue statutory damages. These damages have the advantages of being easier to calculate and are often higher than actual damages. The disadvantage is that these damages have set ranges with a maximum award value that the court may not exceed.

Example: Illegal Music File Downloads

As an example of statutory vs. actual damages, consider a case of file download infringement. Actual damages for illegal file downloads are set at $41 per instance while statutory damages can be much higher. Recent court cases have seen awards in excess of $20,000 per illegally downloaded music file.

The court determines what awards to make to the plaintiff in accordance with the ranges defined by Federal copyright law. The court considers many factors when making its award and, likewise, the lawyers for the plaintiff will examine those factors in determining whether to seek statutory or actual damages. 

Some factors the court may consider are:

• The intent of the infringer
• The purpose of the infringing use
• The value of the work that was infringed upon

An example of considering intent would be if the defendant had made a copy of a CD or program for a family member or made multiple copies and was selling them for profit.

Attorney Fees

Another factor for an applicant determining whether or not to pursue statutory damages is that a plaintiff can only claim recompense for attorney fees under statutory damages. Between this factor and the higher potential monetary damages, plaintiffs often use the threat of statutory damages to force defendants into settling a case, thereby saving time and the possibility of losing their suit. Defendants likewise consider the potential for having to pay for both their own attorneys as well as the plaintiffs on top of potentially crippling damages, preferring to settle for a lesser amount instead of risking a court’s judgment.

Infringement on Non-Copyrighted Work

Actual Damages

Actual damages is the only recourse for people who have had their work infringed upon but did not have it registered. There are instances in which a registered copyright holder may elect to pursue actual over statutory damages. Actual damages are defined as the quantifiable monetary loss the plaintiff has suffered, or the profit the infringer has gained, as a result of the infringement.

Actual damages essentially require a complete forensic accounting analysis of the infringement. The plaintiff attempts to prove that he or she lost a definable amount of money or the infringer made money without the right to the property while the infringer attempts to show that the losses are less than the plaintiff is claiming.

Each case must be evaluated on the data available and evaluated; this is another source of uncertainty in how much actual damages can be worth. The skill of the forensic accountants can make or break a case, as can the ability of one side or the other to draw out the litigation. In this instance, the defendant has an advantage, since the plaintiff has no right to compensation for attorney fees under actual damages.

Determining Factors

Evaluation and assessment of potential damages and the strength of the case allow each side to determine whether to reach a settlement or pursue the litigation. The strength of the case determines the power of each side’s bargaining position and potential legal fees.

The system favors seeking statutory damages where possible; but, accurate assessment of profit or loss is still vital in seeking awards from the judges. Accurate assessment of profit and loss in actual damages gives the defendant an edge in drawing out proceedings to force a settlement.

In either case, the determination of infringement damage and the means used to do so are vital to copyright infringement legal strategies.