Under the Copyright Act, an infringer of a copyright is liable for either the owner’s actual damages and any additional profits of the infringer or statutory damages. It is within the discretion of the plaintiff, or individual seeking to protect his or her copyrighted work, to elect either actual damages or statutory damages. More often than not, the owner will elect statutory damages where that owner has registered the work with the Library of Congress. The reason for this is that the owner may not be able to establish actual damage to the copyright, to the owner’s business, or ill-gotten profits of the infringer in such a way that the total amount is greater than that which is available under the Copyright Act for statutory damages.
That said, it is important to note that courts, within their broad discretion, may look to actual damages suffered when determining what the statutory damages award should be. However, there are limitations within the Copyright Act that control the amount of statutory damages on a minimum and maximum basis. For example, a willful infringement of a registered copyright enables the court to award statutory damages up to a maximum of $150,000. However, where the plaintiff fails to sustain its burden of proving willful infringement, the court may reduce the award of statutory damages to a minimum of $200. Typically, an owner pursuing an infringer will be limited to statutory damages between $750 and $30,000 for the infringement of one work.
While statutory damages are intended to create an incentive for owners to protect their valuable intellectual property, and conversely to deter the unauthorized and unlawful use of another’s copyright, the ability to recover costs and attorneys’ fees is yet an additional motivation of some owners when seeking to redress copyright infringement. Once again, the importance of a federal registration of a copyright becomes clear because not only are statutory damages available, but attorneys’ fees and costs are also available in an infringement lawsuit.
In sum, it is important that an owner understands what damages may be available to redress infringement of copyright. Likewise, an entity accused of copyright infringement should understand not only the legal exposure, but must also understand the financial exposure. With these principles in mind, owners can make educated decisions regarding which works to protect with federal registrations, how often to file such registrations, and whether to file as compilations, understanding that infringement of such compilation will be limited to statutory damages for one work.