Cross-jurisdictional Analysis of Damage Awards in Copyright Infringement Cases

• Publication year: 2021

Cross-Jurisdictional Analysis of Damage Awards in Copyright Infringement Cases

Ioana Vasiu

Babes-Boiyai University

Lucian Vasiu

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CROSS-JURISDICTIONAL ANALYSIS OF DAMAGE AWARDS IN COPYRIGHT INFRINGEMENT CASES

Ioana Vasiu^* & Lucian Vasiu

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Table of Contents

I. INTRoDUCTIoN................................................................................................ 95

II. Legal Frameworks.....................................................................................97

A. United States......................................................................................97
B. CANADA .................................................................................................... 98
C. Singapore..............................................................................................99
D. Italy.........................................................................................................99

III. Analysis of Practical Aspects............................................................100

A. Introductory Remarks.................................................................100
B. Actual Damages...............................................................................102

1. Lost Profits......................................................................................103
2. Royalties...........................................................................................105

C. Disgorgement of Profits.............................................................110
D. Statutory Damages........................................................................114

1. Preliminary Observations.............................................................114
2. Amount of the Award...................................................................116
3. Number of Works Infringed........................................................118
4. Enhanced Awards..........................................................................120
5. Award Adjustment.........................................................................124

E. Punitive Damages............................................................................124

IV. Summary of the Findings and Proposals.......................................128

V. Conclusion..................................................................................................130

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I. Introduction

Copyright and related rights are economic and moral. The infringement of economic rights is a widespread phenomenon that produces massive financial losses to stakeholders.¹ All species of protected works are vulnerable to infringements: computer programs;² photographs;³ films;⁴ songs;⁵ books;⁶ databases;⁷ cartoon characters;⁸ images of people;⁹ architectural works;¹⁰ charts;¹¹ drawings;¹² patterns;¹³ etc. The range of relief in cases of infringement of copyright-protected works includes monetary damages.

There is a large academic literature that discusses various aspects regarding damage awards for copyright infringements.¹⁴ However, existing literature does

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not provide a comprehensive analysis of the award of damages in these cases. Based on extensive examination of over four hundred cases, this article aims to provide a comprehensive cross-jurisdictional analysis of damage awards in copyright infringement cases.

This research employed a multi-step research methodology: selecting jurisdictions, case content analysis, development and refinement of an analytical framework, cross-case, and cross-jurisdictional analysis. Based on the review of multiple legal frameworks and relevant cases, the jurisdictions selected are the United States (U.S.),¹⁵ Canada, Singapore, and Italy. The study of cases from the selected jurisdictions employed content analysis, with a view to systematically identify prominent attributes and arguments, used for thematic grouping into an analytical framework, comprising types, factors, methodologies, and viewpoints, that structured the research. The cross-analysis aimed to highlight the most important aspects, similarities, and differences in how courts across the four jurisdictions award damages in copyright infringement cases. Based on the findings of the cross-analysis, the article proposes a number of potential improvements for the award of damages.

The article proceeds in three parts. Part I discusses the legal frameworks. Part II, structured in five sections, discusses practical aspects regarding

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compensatory and punitive awards. Part III discusses the implications of the findings and proposes a number of potential improvements.

II. Legal Frameworks

The Agreement on Trade-Related Aspects of International Property Rights (TRIPS) requires member states to give courts the authority to "order the infringer to pay the right holder damages adequate to compensate for the injury the right holder has suffered."¹⁶ In these actions, damages are awarded under a combination of compensatory damages, which comprises copyright owner's actual damages, royalties, and infringer's profits, or statutory damages, and punitive damages.

A. UNITED STATES

The U.S. Copyright Act (USCA) authorizes the recovery of the copyright owner's actual damages and any profits made by the infringer, not considered in the award of actual damages, or statutory damages.¹⁷ The plaintiff is required to prove infringer's gross revenue, while the defendant is required to demonstrate any deductible expenses claimed and the elements of profit that can be attributed to other factors than the infringement of the work in the case.¹⁸

Statutory damages can range from $750 to $30,000 per act of infringement,¹⁹ or, when increased or enhanced damages are awarded, up to $150,000 per willful infringement.²⁰ Copyright owners are entitled to statutory damages only if the registration of the work predates the first infringement.²¹ A defendant's knowledge or intent is irrelevant to their liability for copyright infringement.²² If the infringer, however, "was not aware and had no reason to believe that his or her acts constituted an infringement of copyright," the award of statutory damages may be as low as $200.²³

The amount of statutory damages is determined by a jury.²⁴ The USCA does not contain provisions for punitive damages, however, these are awarded, in addition to compensatory damages, for their general conduct deterrence role.

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Enhanced or punitive damages, however, can be only be awarded if the copyright owner is entitled to statutory damages.²⁵

B. CANADA

The Canada Copyright Act (CCA) provides for awards of actual damages and "such part of the profits that the infringer has made from the infringement and that were not taken into account in calculating the damages as the court considers just."²⁶ The claimant is required to demonstrate "only receipts or revenues derived from the infringement," while the defendant must prove the cost elements.²⁷

Instead of actual damages and profits, the copyright owner can elect an award for statutory damages, "[F]or which any one infringer is liable individually, or for which any two or more infringers are liable jointly and severally," ranging from C$500 to C$20,000, for each work, in the case of infringements made for commercial purposes, and from C$100 to C$5,000, for all works, for non-commercial infringements.²⁸

CCA stipulates limitations on the award of statutory damages to a collecting society: "not less than three and not more than ten times the amount of the applicable royalties . . . ."²⁹ CCA also provides for a cap in statutory damages, lower than $500 per work, in cases where there are more than one work in a single medium or the award relates only to one or more infringements under subsection 27(2.3) and the award, even when the minimum is granted, amounts to a total that is considered "grossly out of proportion to the infringement."³⁰

An election of statutory damages does not affect the right of the copyright owner to punitive damages.³¹ Punitive damages can be awarded in cases where the defendant is found guilty of "high-handed, malicious, arbitrary or highly reprehensible misconduct that departs to a marked degree from ordinary standards of decent behaviour."³² CCA lists factors that can be used to determine the adequate or proportional amount of statutory damages: defendant's faith and conduct before and during the proceedings; the deterrent effect on other infringements; and the particular considerations in cases of non-commercial infringements.³³ The election of statutory damages does not affect the copyright owner's right to receive exemplary or punitive damages.³⁴

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C. SINGAPORE

The Singapore Copyright Act (SCA) provides relief in the form of damages and profits, attributable to the infringement, not taken into account in computing the damages, or statutory damages of up to S$10,000 for each work or subject matter, for a maximum aggregated total of S$200,000, except when the actual losses of the plaintiff exceeds that amount.³⁵ If, at the time of infringement, a defendant was not aware and had no reasonable suspicion that his or her acts constituted copyright infringement, the plaintiff cannot claim any damages but is entitled to profits resulting from the infringement.³⁶

The SCA lists factors that should be considered in awarding statutory damages: nature and purpose of the infringement; flagrancy of the act; defendant's bad faith; amount of loss caused or likely to occur as the result of the infringement; benefit accrued by the defendant; conduct before and during the proceedings; deterrent effect; and other relevant aspects.³⁷ An award of exemplary damages is possible.

D. ITALY

Law No. 63 3³⁸ provides the possibility for copyright owners to receive damages that cover both the right holder's damage and loss of profit, as long as these are a direct and immediate consequence of the infringement.³⁹ The restitution of the illicit profits aims to punish the...