Thursday, November 8, 2012

$5,000 Cap On Non-Commercial Copyright Infringement

The biggest threat facing the typical person who just improperly downloads movies or copyrighted material (like the bittorrent litigation cases) is statutory damages. Many people have discussed statutory damages before, so I'll just briefly recap.

There are basically two ways a copyright owner can be compensated for copyright infringement: actual damages and statutory damages.

Actual damages are the actual money you (the copyright owner) lost because of the copyright infringement. This means if you would have made $100 for selling the work that was infringed, then your actual damages are $100.

Statutory damages are a creature of law that have no basis whatsoever in your actual loss. It's just a number that the Court can pull out of thin air up to the maximum cap allowed by law.

The reason statutory damages are the thing to worry about is because the maximum currently allowed by law is $150,000 per copyrighted work. That means, if someone infringes your one copyrighted work, you could potentially recover up to $150,000 (best case).

So when the copyright owners come trolling, the threat they make is that you will get hit with one of these $150,000 (or more) judgments against you for downloading their movie. And to be clear, they do in fact get those judgments. Sometimes. Almost never in a contested case, but it's still a judgment.

That all said, I was very interested when I recently read that Canada revised its copyright laws in a lot of very significant ways. The most interesting was the addition of a cap on statutory damages for so-called "non-commercial" infringement. That cap is now $5,000 instead of the $20,000 available for commercial infringement.

That article got me thinking: Why don't we propose that here? I don't think there are many people who would disagree that commercial infringement is different in quality than non-commercial infringement. I think they should be treated differently. Here, we currently wrestle with the idea that non-commercial infringement might be a fair use, but it might not.

We already have something of a cap on statutory damages for non-commercial use of $0.00 but only if you can convince a Court that your conduct constituted a fair use. What this does is creates extensive litigation over what is or is not fair use, because the stakes are essentially winner-take-all. If it is fair use, then the copyright owner gets nothing. If it's not fair use, then the copyright owner gets up to $150,000.

If we set up a middle-of-the road body of infringement for non-commercial acts, that could go a long way toward ameliorating all the fair use litigation. The infringer isn't at risk of bankruptcy for downloading one movie just to watch at home, and the copyright owner still gets its deterrence.

So here it is, Canada leading the way on some common-sensical copyright reform. This is definitely an area that U.S. law makers should be considering.