In a somewhat surprising case, the Second Circuit appeals court has ruled that infringing on a full album only counts as a single infringement for the sake of statutory damages
, rather than counting each song separately. In an era when juries are awarding the record labels $1.92 million
for an album's worth of songs being infringed (and industry apologists claim this is totally reasonable
), it's nice to see a court recognize how ridiculous this is. As Eric Goldman notes in the link above, this is a situation where a company "snatched defeat from the jaws of victory." It won the lawsuit, and while the court suggested it settle, it kept demanding an award of over $1 million
, by claiming each song was a separate infringement and that each infringement deserved the statutory max of $150,000 per infringement (despite the fact that the amount of actual infringement involved was minimal -- totally $331 accidentally not paid to the client).
That's what happens when you use statutory damages for copyright infringement being totally out of line with common sense. Copyright holders start dreaming of a legal windfall. Thankfully, the court said no way, noting that each album (there were two) only were eligible for a single statutory damage claim, and that the infringement was "innocent infringement," lowering the awards even more. The total amount awarded: $2,400 -- or significantly less than the copyright holder most likely spent on legal fees. The court seemed to recognize the blatant greed in the copyright holder:
Appellees also were reasonable in trying to resolve the case short of trial: Appellees made an Offer of Judgment in the amount of $3000, which Appellants rejected, in favor of continuing to demand over $1 million in damages, notwithstanding the evidence that Appellees had received less than $600 in revenues from infringing sales.
Of course, the news might not be all bad for the record labels. Eriq Gardner is suggesting that some labels may read the decision in a way that will help them prevent artists from terminating
their copyright assignments and taking back control over their works. Many musicians have been preparing to take back their copyrights
through the somewhat complex system of copyright termination, which lets original copyright holders reclaim works they assigned to others after a certain period of time. The labels have been fighting this for years, famously having a Congressional staffer sneak four words
into an unrelated bill late at night, to make all music ineligible for such termination rights, by calling it a "work for hire." That Congressional staffer was then hired for a cushy job at the RIAA a few months later. However, the outrage from musicians finally got Congress to rescind that change.
But it hasn't stopped the industry from looking for ways to prevent termination rights -- including trying to claim that a remastered version
of a song should get a new copyright, separate from the old one. And, don't be surprised if they try to use this ruling in their favor as well. As Gardner notes, even though this ruling was over a totally different issue (damages for infringement), the current definition of a "work for hire" includes "compilations," and the judge's ruling in this case points that an album is a single infringement because it's considered a compilation. And, so, the argument goes, the record labels may have just been given a judge to quote on why albums are compilations... and thus works made for hire... and thus not eligible for termination rights. Fun stuff.