Copyright Infringement: How are Damages Determined?

Courts consider actual and statutory damages

Money damages in copyright infringement actions are commonly awarded under three legal theories, actual damages, profits, and statutory damages:

Actual damages

 Also called compensatory damages, this consists of the dollar amount of any demonstrable loss the owner suffered as a result of the infringing activity. This loss may be from lost sales, lost licensing revenue, or any other provable financial loss directly attributable to the infringement.

Profits

This consists of any money made by the infringer as a result of the infringement. These damages are only awarded if they exceed the amount of profits lost by the copyright owner (actual damages) as a result of the infringement.

EXAMPLE: A book on self-defense, authored by Susan, contains a practical chapter on how to purchase and care for a handgun. Rachel also writes a book on self-defense and substantially borrows from Susan’s chapter on handguns without first obtaining her permission. Rachel has infringed Susan’s copyright. A court could award Susan actual damages if Susan proves that she lost sales of her book because people bought Rachel’s book instead, at least in part because of the handgun chapter. Alternatively, if Susan has licensed chapters of her books to other authors, the amount she typically receives for such licensing could be her actual damages. In addition, the court could award Susan any profits that Rachel realized from the infringement to the extent such profits exceeded the amount of Susan’s lost  profits.

Statutory damages.

In many copyright cases, both actual damages and profits are difficult to prove. For that reason, the Copyright Act provides for statutory damages—that is, damages set by law. However, only a person who has registered a work with the U.S. Copyright Office before the infringement (or within three months of publication) may receive statutory damages. Such a plaintiff in an infringement action may opt for either actual damages (and the infringer’s profits, if appropriate) or statutory damages, but not both.

For infringements that can’t clearly be proven as either innocent or willful, statutory damages may be from $750 to $30,000 per infringement depending on the circumstances. The amount will depend on the seriousness of the infringing act and the financial worth of the infringer. On the other hand, an innocent infringer may have to pay as little as $200, while an intentional infringer may have to pay as much as $150,000 for a single infringement of one work.

Copyright Act: §â

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