Editing Copyright Law/Enforcement of Copyright

{{:Copyright Law/TOC}}{{Breadcrumb|parent_page=Copyright Law|alias={{SUBPAGENAME}}}}
== {{anchor|Toc187934}} Jurisdictional and Procedural Issues ==
=== {{anchor|Toc187935}} Jurisdiction ===

Jurisdiction to hear actions “arising under any Act of Congress relating to . . . copyrights” is given exclusively to federal courts pursuant to 28 U.S.C. § 1338(a). The typical infringement action therefore cannot be brought in a state court. In what appears to be an unprecedented holding, the Indiana Supreme Court held that in a contract action brought by a publisher against an author, in which the author files a counterclaim for copyright infringement, a state court may hear and decide the copyright counterclaim.<ref name="ftn308">Green v. Hendrickson Publishers, Inc., 770 N.E.2d 784 (Ind. 2002).</ref> Although so-called common-law copyright claims (relating to unpublished works) could have been brought in state courts under the 1909 Copyright Act, that is no longer true because section 301 of the 1976 Act has abolished state copyright law.

It is sometimes difficult to determine whether a claim “arises under” the federal Copyright Act, particularly when the principal issue to be determined relates to contract interpretation or disputed ownership. Federal jurisdiction will be exclusive if the action is for copyright infringement or if its determination turns on an interpretation or application of the federal Copyright Act. In a frequently cited passage from the opinion of Judge Friendly in ''T.B. Harms v. Eliscu'', the Court of Appeals for the Second Circuit stated:

{{Quote|Mindful of the hazards of formulation in this treacherous area, we think that an action “arises under” the Copyright Act if and only if the complaint is for a remedy expressly granted by the Act, e.g., a suit for infringement or for the statutory royalties for record production, or asserts a claim requiring construction of the Act . . . or, at the very least and perhaps more doubtfully, presents a case where a distinctive policy of the Act requires that federal principles control the disposition of the claim. The general interest that copyrights, like all other forms of property, should be enjoyed by their true owner is not enough to meet this last test.<ref name="ftn309">339 F.2d 823, 828 (2d Cir. 1964) (citations omitted). This formulation has been more recently endorsed, e.g., in ''Bassett v. Mashantucket Pequot Tribe'', 204 F.3d 343 (2d Cir. 2000).</ref><ref name="ftn310"> ).</ref>}}

Even if a dispute over title must be resolved antecedent to determining infringement and remedies, and the title dispute turns on contract construction, a federal court will have jurisdiction.<ref name="ftn311">Vestron, Inc. v. Home Box Office, Inc., 839 F.2d 1380 (9th Cir. 1988).</ref> Moreover, as suggested in the ''Harms'' quotation, if the only dispute before the court relates to disputed title, even that will provide a basis for exclusive federal jurisdiction if the dispute turns on application of statutorily defined terms such as “work made for hire” or “joint work.”<ref name="ftn312">Lieberman v. Estate of Chayefsky, 535 F. Supp. 90 (S.D.N.Y. 1982).</ref> But if, for example, co-ownership is conceded, and the only issue is the division of royalties pursuant to principles of contract or equity, that is simply a matter of state law and does not provide a basis for federal jurisdiction.<ref name="ftn313">Gaiman v. McFarlane, 360 F.3d 644 (7th Cir. 2004).</ref> The same is true if the plaintiff’s complaint raises only the question whether a license has been effectively terminated because of misconduct on the part of the other party to the agreement.<ref name="ftn314">Scholastic Entm’t, Inc. v. Fox Entm’t Group, Inc., 336 F.3d 982 (9th Cir. 2003).</ref>

As with any federal court action, a substantial copyright claim will carry with it pendent jurisdiction to hear state-law claims that are significantly related. The usual rules that obtain in federal actions concerning the determination of personal jurisdiction over the defendant and proper venue also apply in copyright cases.

Copyright actions have historically been treated throughout the world as “local” actions, in the sense that jurisdiction to adjudicate a claim of infringement will lie only in the courts of the nation where the claimed infringement occurred, and those courts will apply only their own law (at least on the issue of whether the defendant’s conduct constituted an infringement). Article 5(2) of the Berne Convention, the principal international copyright convention since 1886 that was joined by the United States in March 1989, provides: “[A]part from the provisions of this Convention, the extent of protection, as well as the means of redress afforded to the author to protect his rights, shall be governed exclusively by the laws of the country where protection is claimed.” In recent years, however, there has been an increasing willingness on the part of the U.S. courts to consider claims of infringement committed on foreign soil and to apply foreign copyright law. In other words, infringement actions are increasingly viewed as “transitory” (rather than “local”), as much as an action in tort or for breach of contract. If there is personal jurisdiction over the defendant and a basis for subject-matter jurisdiction (diversity of citizenship, even if not a federal question), it has been held that “[A] copyright owner may sue an infringer in United States courts even though the only alleged infringement occurred in another country. Under the territoriality principle, the copyright law of the other country, and not United States copyright law, will govern the action in the United States.”<ref name="ftn315">Armstrong v. Virgin Records, 91 F. Supp. 2d 628 (S.D.N.Y. 2000) (alleged infringements in England). ''See also'' Carell v. Shubert Org., 104 F. Supp. 2d 236 (S.D.N.Y.) (alleged infringements in the U.S., Australia, Canada, Japan and the U.K.).</ref>

In ''Boosey & Hawkes Music Publishers, Ltd. v. Walt Disney Co''.,<ref name="ftn317">145 F.3d 481 (2d Cir. 1998).</ref> in which the assignees of Igor Stravinsky challenged the rights of Disney to market videocassettes of the well-known film ''Fantasia'', containing the composer’s ''The Rite of Spring'', copyright infringements were asserted under the laws of 18 foreign nations. In 1998 the Court of Appeals for the Second Circuit held that the federal district court in New York should not dismiss the case because of ''forum non conveniens'', but should rather be prepared to hear the case and apply foreign law. That same court, the same year, held that it is particularly appropriate to apply foreign law (there, Russia’s) with respect to the matter of copyright ownership (as distinguished from the issue of infringement) when at issue were the respective rights of Russian newspaper reporters and publishers.<ref name="ftn318">Itar-Tass Russian News Agency v. Russian Kurier, Inc., 153 F.3d 82 (2d Cir. 1998).</ref>

=== {{anchor|Toc187936}} Who may sue ===

The 1976 Act defines “infringer of the copyright” and accords rights to institute infringement actions. Section 501(a) provides that “Anyone who violates any of the exclusive rights of the copyright owner as provided by sections 106 through 119, or who imports copies or phonorecords into the United States in violation of section 602, is an infringer of the copyright.” Section 501(a), particularly when read in conjunction with section 201(d)(2), makes clear what had been a source of confusion under the prior law. Under section 201(d)(2), any of the exclusive rights in section 106 may be transferred and owned separately, and the “owner of any particular exclusive right is entitled, to the extent of that right, to all of the protection and remedies accorded to the copyright owner by this title.” Copyright ownership is thus said to be “divisible” under the 1976 Copyright Act.

This has implications regarding who can bring an action for copyright infringement. Section 501(a) states that “The legal or beneficial owner of an exclusive right under a copyright is entitled . . . to institute an action for any infringement of that particular right committed while he or she is the owner of it.” Thus, if novelist ''A'' transfers her hardcover publication rights to ''B'', her paperback rights to ''C'', her translation rights to ''D'', and her motion picture rights to ''E'', each of those persons— provided the transfers''' '''were exclusive—may bring an infringement action against any other person who, without authorization, is exercising the particular exclusive right held. Because, in any one of these infringement actions, ''A''’s interests will likely be affected—and perhaps so too will the interests of some or all of the other hypothetical characters—section 501(b) provides that the court may (and sometimes must) direct the plaintiff to give these others notice, and “may require the joinder, and shall permit the intervention, of any person having or claiming an interest in the copyright.”

A person holding a ''nonexclusive'' license to exercise one or more of the rights set forth in section 106 may not sue for infringement. Thus, an action for infringement resulting from the unauthorized public performance of a popular song must be brought by the copyright owner, typically a music publishing company, and may not be brought by the performing rights society of which the songwriter or publisher is a member, such as ASCAP or BMI (even though the society will be conducting the litigation in all of its details).<ref name="ftn319">Ocasek v. Hegglund, 116 F.R.D. 154 (D. Wyo. 1987); Broadcast Music, Inc. v. CBS Inc., 421 F. Supp. 592 (S.D.N.Y. 1983).</ref>

Section 501(b) gives the right to sue to the “legal or beneficial owner.” If, for example, a novelist or songwriter conveys copyright under an agreement providing for the payment of royalties based on sales, the transferee publisher is the legal copyright owner, but the novelist or songwriter is regarded as the beneficial owner and may bring an action even if the publisher does not.<ref name="ftn320">H.R. Rep. No. 94-1476, at 159 (1976). The beneficial owner may himself, however, be an infringer of the copyright held by the legal owner if he fails to secure the consent of the latter to copying or to preparing a derivative work. Fantasy, Inc. v. Fogerty, 654 F. Supp. 1129 (N.D. Cal. 1987).</ref>

=== {{anchor|Toc187937}} Registration as a prerequisite to suit ===

Prior to March 1, 1989, it was a requirement of an infringement action that the copyright in the allegedly infringed work be registered in the Copyright Office (typically by the plaintiff copyright owner). As a result of U.S. adherence to the Berne Convention, implementing legislation eliminated this prerequisite to suit—but only for works initially published in ''other'' nations that are members of the Berne Union. Works initially published in the United States must still be registered with the Copyright Office prior to suit.<ref name="ftn321">For a discussion of how the courts have administered this requirement, see [[Copyright Law/Copyright Formalities#Deposit and Registration|Copyright Formalities § Deposit and Registration]].</ref> This two-tiered system of registration has been criticized on the ground that it operates to the disadvantage of U.S. authors and publishers.

Even apart from the requirement of registration as a condition of suit, the Copyright Act affords sufficient incentives to registration such that it is common for copyright owners (at least of published works) to register their copyright long before there is any hint of litigation. If, for example, registration is made before a work is published or within five years after it is published, the certificate of registration “shall constitute prima facie evidence of the validity of the copyright and of the facts stated in the certificate.”<ref name="ftn322">17 U.S.C. § 410(c).</ref> This can be a significant aid to a plaintiff in proving copyright ownership, the originality of the work, the validity of the copyright, and priority of publication. Prompt registration is also a means of ensuring that in any possible future litigation the plaintiff will be eligible to claim attorney’s fees and statutory damages.<ref name="ftn323">''See'' [[Copyright Law/Copyright Formalities#Deposit and Registration|Copyright Formalities § Deposit and Registration]]; 17 U.S.C. § 412.</ref>

In some instances, the Copyright Office may choose not to register a person’s claim of copyright, perhaps because the work is regarded as lacking in original authorship. In those cases in which the plaintiff must allege registration (which continue to be the overwhelming number of copyright infringement actions), the statute deals with the Register of Copyright’s nonregistration by permitting the lawsuit—after the plaintiff has made proper efforts to register the copyright—but requiring the plaintiff to serve the Register with a copy of the complaint. In such cases, the Register is afforded the opportunity to become a party to the action with respect to the issue of registrability.<ref name="ftn324">17 U.S.C. § 411(a).</ref>'' ''

=== {{anchor|Toc187938}} Limitations on liability: statute of limitations and sovereign immunity ===

There are two important limitations on exposure to copyright liability. The first is section 507 of the Copyright Act, which sets forth a period of limitations of three years for civil proceedings and five years for criminal proceedings. The running of the statute is “tolled” during any period of fraudulent concealment of the infringement or, more generally, when a reasonable person in the plaintiff’s shoes would not have discovered the infringement.<ref name="ftn325">Taylor v. Meirick, 712 F.2d 1112 (7th Cir. 1983).</ref> The courts are divided, however, on the question whether repeated acts of infringement—the latest of which may be minor and may occur long after the principal infringements have ceased—should be treated as a single “continuing” wrong, such that the plaintiff may sue for all infringing acts so long as the most recent one falls within the three-year statutory period.<ref name="ftn326">'' Compare'' ''Meirick'', 712 F.2d 1112 (“continuing wrong”), ''with'' Roley v. New World Pictures, Ltd., 19 F.3d 479 (9th Cir. 1994) (rejecting a “rolling statute of limitations”).</ref>

A second, and controversial, limitation on copyright liability is the doctrine of sovereign immunity. The Eleventh Amendment to the Constitution prevents federal courts from hearing claims against states. Although the Supreme Court has held that Congress has the power to abrogate that immunity, the scope of that congressional power has been the subject of evolving and not altogether clear standards since the 1980s (accompanied by sharp divisions within the Court). The Court held in 1989 that Congress could abrogate the immunity of the states in substantive areas falling within Article I of the Constitution, such as interstate commerce and patents and copyrights.<ref name="ftn327">Pennsylvania v. Union Gas Co., 491 U.S. 1 (1989).</ref> However, the intention to make states liable for money damages had to be manifested in very explicit statutory language,<ref name="ftn328">Atascadero State Hosp. v. Scanlon, 473 U.S. 234 (1985).</ref> and so the statute was amended in 1990 by the Copyright Remedy Clarification Act. To section 501(a), which defines “an infringer of the copyright” as “anyone” who violates any of the exclusive rights of the copyright owner, Congress added two new sentences:

{{Quote|As used in this subsection, the term “anyone” includes any State, any instrumentality of a State, and any officer or employee of a State acting in his or her official capacity. [They] shall be subject to the provisions of this title in the same manner and to the same extent as any nongovernmental entity.}}

To make the congressional purpose doubly clear, a new section 511 was added, explicitly providing that the state, the state instrumentality, or their employees “shall not be immune, under the Eleventh Amendment of the Constitution of the United States or any other doctrine of sovereign immunity” from suit in a federal court for copyright infringement, and that the full range of remedies ordinarily available against private defendants is also available in such suits.

Within a mere six years, the constitutionality of these provisions fell subject to serious question. In ''Seminole Tribe of Florida v.'' ''Florida'',<ref>517 U.S. 44 (1996).</ref> the Supreme Court in 1996 overruled earlier precedent and held (5 to 4) that the Commerce Clause is not a source of congressional authority to overturn states’ sovereign immunity. Then, in 1999, the Court considered whether it was constitutional for Congress to subject the states to patent-infringement or trademark-infringement liability by means of provisions that were essentially the same as those added to the Copyright Act in 1990. In the two ''Florida Prepaid Postsecondary'' cases, the Court considered the Commerce and Patent Clauses of the Constitution, as well as the Fourteenth Amendment, which empowers Congress to enact legislation implementing the constitutional ban on state deprivation of “property” without due process of law. The Court held (again, 5 to 4) that on the facts presented none of those constitutional sources empowered Congress to abrogate the immunity of the states against federal-court actions for damages for patent or trademark infringement.<ref name="ftn329">Coll. Sav. Bank v. Fla. Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666 (1999) (Lanham Trademark Act); Fla. Prepaid Postsecondary Educ. Expense Bd. v. Coll. Sav. Bank, 527 U.S. 627 (1999) (Patent Act).</ref>

The following year, in ''Chavez v. Arte Publico Press'',<ref>204 F.3d 601 (5th Cir. 2000).</ref> the ''Florida Prepaid'' Patent Act decision was held dispositive by the Court of Appeals for the Fifth Circuit in an action for copyright infringement by an author against the University of Houston, a state agency. The court held that the 1990 amendments to the Copyright Act purporting to render states fully liable for copyright infringement, including damages, exceeded Congress’s power under both Article I and the Fourteenth Amendment. (Under generally prevailing sovereign-immunity jurisprudence, there is no bar to the issuance of injunctions against state instrumentalities or to judgments for damages against state officials in their individual capacity.)

Given the broad use of copyrighted materials by state instrumentalities—libraries, schools, universities, as well as the wide range of typical executive and administrative agencies—their immunity against damages actions would create a major gap in the enforcement of the copyright laws, especially with the compounding inequity of the states’ ability to enforce those laws against private parties. It remains to be seen whether this gap will long continue, in the face of further decisionmaking by the courts and by Congress.

== {{anchor|Toc187940}} Remedies ==

Injunctive relief, both temporary and final, is commonly issued in copyright actions and is expressly provided for in section 502 of the 1976 Copyright Act. It is commonly held that once the plaintiff establishes a prima facie case of a valid copyright and its infringement, irreparable injury will be presumed and a temporary injunction will issue.<ref name="ftn330">Apple Computer, Inc. v. Formula Int’l, Inc., 725 F.2d 521 (9th Cir. 1984).</ref> The Supreme Court has, however, urged circumspection in the issuance of injunctions—at least in those cases in which the infringing material makes its own “transformative” literary, artistic or musical contribution. In such cases, the interests of the copyright-owner and of the public (in having access to the infringing work) may be best served by limiting the remedy to one for damages.<ref>Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994); N.Y. Times Co. v. Tasini, 533 U.S. 483 (2001).</ref> The court may also order, pursuant to section 503, the impounding and the reasonable disposition (including the destruction) of all infringing copies and phonorecords and of the devices used to manufacture them.

Perhaps the most intricate, and most important, remedial section of the statute is section 504, which spells out in detail the circumstances under which damages and profits may be awarded. The Act provides for the award of either ''actual'' damages and any additional profits, or what are known as ''statutory'' damages.

In order to dispel the confusion that had existed under the 1909 Act regarding the possible duplicative award of actual damages and profits, section 502 of the 1976 Act provides:

{{Quote|The copyright owner is entitled to recover the actual damages suffered by him or her as a result of the infringement, and any profits of the infringer that are attributable to the infringement and are not taken into account in computing the actual damages. In establishing the infringer’s profits, the copyright owner is required to present proof only of the infringer’s gross revenue, and the infringer is required to prove his or her deductible expenses and the elements of profit attributable to factors other than the copyrighted work.}}

The principal purpose of the statutory provision is to avoid doublecounting in the computation of monetary remedies. Thus, if the copyright owner marketed its copyrighted wares only east of the Mississippi River at a profit of $1 per unit, and the infringer marketed its infringing wares from coast to coast at a profit of 50 cents per unit, a court should award damages measured by the loss of $1 for each of the plaintiff’s displaced east-region sales and the infringer’s profits measured by 50 cents for each of the west-region sales. A frequently used measure of the plaintiff’s damages is the reasonable value that the defendant would have paid for a license to use the copyrighted material legally.<ref name="ftn331">On Davis v. The Gap, Inc., 246 F.3d 152 (2d Cir. 2001).</ref> It is, of course, sometimes difficult to determine which of the defendant’s sales should be treated as causing a direct economic loss to the plaintiff (i.e., damages) and which should be treated exclusively as generating noncumulative profits for the defendant.<ref name="ftn332">'' See'' Taylor v. Meirick, 712 F.2d 1112 (7th Cir. 1983).</ref>

Once the court separates out the defendant’s profits, it is at least as difficult to determine which of those profits “are attributable to the infringement.” All that the plaintiff need do is prove the defendant’s gross profits derived from the enterprise of which the infringement is a part. The burden then shifts to the defendant to reduce the award of profits, which can be done in two different ways.

The defendant may show that its profits were derived from elements of its activities other than the infringement. A motion picture producer who has made illicit use of a copyrighted novel can show, for instance, that the bulk of its box-office (and video sale and rental) receipts can be traced to its starring players, its original plot elements, its cinematography and special effects, its advertising campaign, and the like.<ref name="ftn333">''See'' Sheldon v. Metro-Goldwyn Pictures Corp., 309 U.S. 390 (1940). ''See generally'' Caffey v. Cook, 409 F. Supp. 2d 484 (S.D.N.Y. 2006), for a thorough discussion of the noninfringing elements contributing to profits, as well as the costs of a theatrical production.</ref> The defendant may also show—whether or not its gross profits were attributable to noninfringing elements—that its venture in fact was so costly as to eliminate most or all of its profits. Thus, even if an infringing theatrical production is based word-for-word on a copyrighted dramatic text, the defendant can attempt to prove that the salaries of the performers, the cost of renting the theater, the cost of advertising and the like were so high as totally to absorb its box-office receipts. In such a case, it would be proper for the court to award no profits— although it would of course be perfectly appropriate for the court to award damages as measured by the reasonable value of a license to perform the play publicly, or as measured by the lost opportunity to market the script to a film producer (because of the bad press received by the infringing theatrical performance).

Two decisions by the Court of Appeals for the Ninth Circuit, in which the court had to make difficult determinations in assessing the defendant’s profits, are illustrative. In one case, the infringing brewing company used the plaintiff’s music as a minor accompaniment pattern in a beer commercial.<ref name="ftn334">'' ''Cream Records, Inc. v. Jos. Schlitz Brewing Co., 754 F.2d 826 (9th Cir. 1985).</ref> In another, the infringer was a hotel and gambling enterprise that used the plaintiff’s music in one part of a multiscene musical revue in the hotel theater.<ref name="ftn335">Frank Music Corp. v. Metro-Goldwyn-Mayer, Inc., 772 F.2d 505 (9th Cir. 1985).</ref> The court’s decisions should be examined for thoughtful suggestions as to how to assess the plaintiffs’ possible claims, respectively, to all of the brewer’s profits on the advertised beer and to all of the profits from the hotel’s gambling operations that were presumably fueled in part by those who attended the nearby musical theater. In a more recent case raising the issue, the Court of Appeals for the Second Circuit observed:

{{Quote|[I]f a publisher published an anthology of poetry which contained a poem covered by the plaintiff’s copyright, we do not think the plaintiff’s statutory burden would be discharged by submitting the publisher’s gross revenue resulting from its publication of hundreds of titles, including trade books, textbooks, cookbooks, etc. In our view, the owner’s burden would require evidence of the revenues realized from the sale of the anthology containing the infringing poem. The publisher would then bear the burden of proving its costs attributable to the anthology and the extent to which its profits from the sale of the anthology were attributable to factors other than the infringing poem, including particularly the other poems contained in the volume. . . . [T]he statutory term “infringer’s gross revenue” should not be construed so broadly as to include revenue from lines of business that were unrelated to the act of infringement.<ref name="ftn336">''The Gap'', 246 F.3d at 160. ''See also'' Mackie v. Rieser, 296 F.3d 909 (9th Cir. 2002) (copyrighted sculpture was depicted in symphony orchestra brochure, without permission; sculptor unsuccessfully based claim for profits upon the orchestra’s gross box-office income for the musical season).</ref>}}

In making all of these calculations, courts are obviously often reduced to engaging in approximations. It is commonly held that “Any doubt as to the computation of costs or profits is to be resolved in favor of the plaintiff.”<ref name="ftn337">'' Frank Music Corp''., 772 F.2d at 514''.''</ref>

As an alternative to an award of actual damages and profits, section 504(c)(1) gives to the plaintiff the right to “elect, at any time before final judgment is rendered, to recover . . . an award of statutory damages for all infringements involved in the action, with respect to any one work . . . in a sum of not less than $750 or more than $30,000 as the court considers just.” Such an award is referred to as “statutory damages.” The Supreme Court has held—based on constitutional law and history—that when an infringement case is being tried to a jury, all issues pertinent to the award of statutory damages are to be decided by a jury.<ref name="ftn338">Feltner v. Columbia Pictures Television, Inc., 523 U.S. 340 (1998).</ref>

Statutory damages provide a vindication of the copyright owner’s interest when litigation would otherwise appear largely futile even though just. For example, in some cases of copyright infringement, such as the occasional unauthorized music performance in a restaurant or nightclub, proof of actual damages and profits may be difficult or nonexistent—despite the acknowledged violation of the plaintiff’s rights. Such cases are appropriate for the award of statutory damages. In addition the purpose of the statutory-damage remedy is largely deterrent and even punitive. Indeed, under section 504(c)(2), the court has the discretion to award as much as $150,000 upon determining that the infringement was committed “willfully” (which is generally understood to require proof that the defendant knew it was violating the law). For that reason it is generally regarded as inappropriate to award punitive damages in an infringement action in which statutory damages are sought.<ref name="ftn339">''The Gap'', 246 F.3d 152.</ref>

Although the plaintiff need not offer proof of actual damages or profits to secure statutory damages, the court of course may—and generally does—take account of such proof in making an award of statutory damages. It should be noted that the general statutory range of $750 to $30,000 applies not to each infringement but rather to each work infringed by the defendant, regardless of the number of infringements. Thus, if a nightclub without a performance license stages twicenightly performances of 10 songs over a period of four months, the court can make only 10 statutory-damage awards, one for each copyrighted song. Section 504(c) expressly provides that “For the purposes of this subsection, all the parts of a compilation or derivative work constitute one work.” Copying without consent all of an author’s poems in her anthology would most likely give rise to a single award of statutory damages, while copying and marketing videotapes containing several television shows from a single season would most likely give rise to multiple awards.<ref name="ftn340">''Compare'' Stokes Seeds, Ltd. v. Geo. W. Park Seed Co., 783 F. Supp. 104 (W.D.N.Y. 1991) (flower photographs on seed packets copied from book of flower photographs), ''with'' MCA T.V., Ltd. v. Feltner, 89 F.3d 766 (11th Cir. 1996) (television series).</ref>

Just as the statute provides for an award of statutory damages five times as great as the usual amount in the case of willful infringement, section 504(c) also provides for reductions below the statutory “floor” in certain cases of demonstrated innocent infringement. If the infringer can prove that he or she “was not aware and had no reason to believe that his or her acts constituted an infringement,” the court may reduce the award to as little as $200. (Since the effective date of the Berne Convention Implementation Act, March 1, 1989, this has been the principal remaining statutory inducement to copyright owners to place a conspicuous copyright notice on their works.) And statutory damages may be remitted by the court completely if the defendant reasonably believed that his or her use was a fair use under section 107 and the defendant was an employee of a nonprofit school or library, acting in the scope of employment (or was, under certain conditions, a public broadcaster).

As a final element of compensatory relief, a court has the discretion, under section 505, to award costs to either party and to award a reasonable attorney’s fee to the prevailing party. Recall that, under section 412, a plaintiff is not entitled to attorney’s fees (or statutory damages) if, in the case of a published work, registration of the copyright is not effected until after the infringement has “commenced”; the plaintiff does, however, have a three-month post-publication grace period during which registration will protect against the sacrifice of costs and attorney’s fees even for pre-registration infringements.<ref name="ftn341">17 U.S.C. § 412.</ref> In 1994, the Supreme Court, in ''Fogerty v. Fantasy, Inc''.,<ref name="ftn342">510 U.S. 517 (1994).</ref> addressed a question that had divided the circuits: whether attorney’s fees are more readily to be awarded to successful plaintiffs (in order to encourage the litigation of meritorious claims of copyright infringement, which promotes the public interest in creativity) or whether a more evenhanded standard should be applied. The Supreme Court endorsed the latter view, noting that in order to serve “the purpose of enriching the general public through access to creative works, . . . defendants who seek to advance a variety of meritorious copyright defenses should be encouraged to litigate them to the same extent that plaintiffs are encouraged to litigate meritorious claims of infringement.”<ref name="ftn343">''Id.'' at 527.</ref> The Court, however, rejected the argument that the prevailing party should routinely be awarded attorney’s fees, as is true under the “British Rule.” Rather, the Court concluded that the language of the Copyright Act makes it clear that such fees are to be awarded to prevailing parties only as a matter of the court’s discretion, based upon such factors as frivolousness, motive, objective unreasonableness, and the need in certain cases to advance considerations of compensation and deterrence (so long as applied evenhandedly to prevailing plaintiffs and defendants).<ref name="ftn344">''Id.'' at 534 & n.19. ''See'' Gonzales v. Transfer Techs., Inc., 301 F.3d 608, 610 (7th Cir. 2002) (in the interest of deterrence, “the prevailing party in a copyright case in which the monetary stakes are small should have a presumptive entitlement to an award of attorneys’ fees”).</ref>

In rare cases, copyright infringement may result in the imposition of criminal liability under section 506. Under section 506(a), the government must prove that the infringement was willful (understood to mean that there is awareness of illegal activity) and either “for purposes of commercial advantage or private financial gain” or “by the reproduction or distribution, including by electronic means” of copies or phonorecords—during any 180-day period—with a total retail value of more than $1,000. The punishment is set forth in 18 U.S.C. § 2319, and involves a sliding-scale of fines and imprisonment based on the total value of the goods involved and the frequency with which the offense has been committed. The court also has the discretion to order the forfeiture and destruction of all infringing copies or phonorecords and of devices used in the infringement. Subsections 506(c), (d) and (e), respectively, set forth the crimes of fraudulent placement of a copyright notice, fraudulent removal of a copyright notice, and false statements of material fact in a copyright registration application. As already noted, the statute of limitations for criminal proceedings under the Copyright Act is five years (compared with three years in civil infringement cases).

== {{anchor|Toc187941}} Technological Protection Measures ==

Given the speed with which the Internet can be used both to reproduce near-perfect copies and phonorecords and to transmit them around the world, Congress concluded it was important to support the efforts of copyright owners to prevent infringement at the outset, rather than merely to seek judicial relief afterward. The Digital Millennium Copyright Act (DMCA) was added to the Copyright Act in 1998. Its purpose (apart from the secondary-liability provisions just discussed) is to ensure that “technological protection measures”—such as scrambling or encrypting digital versions of recordings, films and books—are not circumvented without proper authorization. Such technological protection measures typically ensure that the copyright-protected work will not be copied, stored or transmitted to others. Section 1201(a) provides that “no person shall circumvent a technological protection measure that effectively controls access to a work” protected by copyright, and that “no person shall manufacture, import, offer to the public, provide or otherwise traffic in any technology, product, service, device, component, or part thereof” that (among other things) is “primarily designed or produced” for the purpose of circumvention or is knowingly marketed for use in circumvention. While section 1201(a) thus forbids circumvention of what is known as “access-protection” technology, section 1201(b) imposes comparable proscriptions upon “copyprotection” technology (which effectively protects against the violation of rights held by copyright owners). Violations of section 1201 are not technically infringements of copyright, but sections 1203 and 1204 impose civil and criminal liability, respectively, much like that for copyright infringement.

Although the provisions of section 1201 are rather elaborate (and include a half-dozen exemptions, to which several more have been added by the Copyright Office), their core application can be illustrated by the 2001 decision of the Court of Appeals for the Second Circuit in ''Universal City Studios, Inc. v. Corley''.<ref name="ftn345">273 F.3d 429 (2d Cir. 2001).</ref> There, the plaintiffs were eight major motion picture studios that had incorporated in their DVD versions of their copyrighted films a Content Scramble System (CSS), which prevented making copies of the DVDs, or playing them on devices lacking licensed decryption technology, or transmitting them on the Internet. After a Norwegian teenager succeeded in reverseengineering CSS and devising a computer program to circumvent it (DeCSS), the defendants posted DeCSS on their Internet website and linked to other sites that also made DeCSS generally available. The court readily found the defendants to have violated section 1201(a)(2) (“trafficking”) of the DMCA, by offering and providing on their website circumvention software that was “primarily designed” for the purpose of circumventing the CSS “technological measure that effectively controls access to a work” protected by copyright. The court also found that the defendants and DeCSS did not fall within any of the several statutory exemptions, and that the finding of liability and the issuance of an injunction did not violate the First Amendment.

In a criminal prosecution arising from the Internet distribution of software designed to circumvent the access-protection technology used on so-called e-books marketed on the Internet, the district court upheld section 1201(a) against a series of constitutional challenges, including vagueness, the “limited times” provision of the Copyright and Patent Clause, and the limits upon Congress’s power to regulate interstate commerce.<ref name="ftn346">United States v. Elcom, Ltd., 203 F. Supp. 2d 1111 (N.D. Cal. 2002).</ref>

It has, however, been held that section 1201 does not bar the unauthorized use of an access password, or similar decryption device, that has been issued by the copyright owner to a third party from whom the defendant obtained it; the defendant was held to have merely bypassed permission to move through the technological measure, rather than having surmounted or evaded that measure.<ref name="ftn347">I.M.S. Inquiry Mgmt. Sys., Ltd. v. Berkshire Info. Sys., Inc., 307 F. Supp. 2d 521 (S.D.N.Y. 2004).</ref> And courts have resisted the efforts of manufacturers of everyday consumer products—such as computer-printer cartridges<ref name="ftn348">Lexmark v. Static Control Corp., 387 F.3d 522 (6th Cir. 2004).</ref> and garage-door openers<ref>Chamberlain v. Skylink, 381 F.3d 1178 (Fed. Cir. 2004).</ref>—to use section 1201 of the DMCA to bar those who would design and sell replacement parts, even when those competitors circumvent software codes that enable, respectively, the cartridges to interact with the printer and the opener to operate the garage door. A principal reason was that section 1201 was designed not to allow sellers of consumer goods to monopolize the sale of aftermarket parts, but rather to bar access to and copying of underlying works that are themselves within the intended protection of the Copyright Act, such as music recordings, video games and motion pictures.

Section 1202 of the DMCA is designed to encourage the copyright owner to embed important copyright-related information in digital copies and phonorecords, including the name of the author and copyright owner and the terms and conditions for use of the work. This is known as copyright management information (CMI). Section 1202 prohibits knowingly providing false CMI with the intent to facilitate or conceal copyright infringement, as well as furthering the removal or alteration of CMI with reasonable grounds for knowing it will facilitate or conceal an infringement.<ref name="ftn349">For cases illustrating the difficulty of securing relief under section 1202(b), see ''Gordon v. Nextel Communications'', 345 F.3d 922 (6th Cir. 2003); ''Schiffer Publishing, Ltd. v. Chronicle Books, LLC'', 76 U.S.P.Q.2d 1493 (E.D. Pa. 2005).</ref>

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