consider professor samuelson’s and tara wheatley’s account of the origin and purpose of statutory awards for copyright infringements:
I. The Evolution of Statutory Damages in U.S. Copyright Law
Statutory damages in U.S. copyright law have historically been intended to ensure that copyright owners could obtain at least some measure of compensation when it was difficult to prove how much damage they had suffered as a result of the defendants’ infringements. Although Congress made some effort to cabin statutory damage awards to avoid excessiveness in the Copyright Act of 1976, the presence of the enhanced damage provision available for willful infringements has led to an increasing number of awards that are not only punitive in effect, but punitive in intent. This trend is inconsistent with sound copyright policy and with Congress’s intent in adopting this provision.
A. Statutory Damages Under the 1909 Act
Some historical context is useful to understand the purposes of the statutory damage regime established in the 1909 Act. During the late eighteenth and throughout the nineteenth centuries, U.S. law allowed copyright owners to be awarded a statutorily set penalty of 50 cents, later increased to $ 1, per infringing sheet found in the defendant’s possession. For several decades, the per sheet penalty was the only monetary remedy that could be obtained from common law courts, although later amendments generally enabled copyright owners to recover actual damages in common law courts, or if the suit was brought in equity, an accounting of the defendant’s profits along with injunctive relief.
The legislative history of the Copyright Act of 1909 is replete with expressions of dissatisfaction with the per sheet remedy. This dissatisfaction was due in part to the penal character of this remedy which caused courts to construe it narrowly, and in part to the rigidity of rules about which remedies for infringement were available at law or in equity.
Perhaps the most important remedial reform introduced in the 1909 Act was the new law’s authorization for one civil lawsuit to be brought in which actual damages and the defendant’s profits (or the “in lieu” damages to be discussed shortly) could be awarded, as well as forfeiture of infringing copies and an injunction against future infringements.
A second important reform was the elimination of the per sheet penalty, whose previously penal functions were now served by a criminal provision for willful infringements for profit, and whose compensatory and deterrent functions were taken on by the availability of monetary relief for actual damages (for example, lost license fees) and defendant’s profits attributable to infringement.
A third important reform was the creation of a new generalized regime of statutory damages, available “in lieu” of actual damages and profits, which could overcome the severe difficulties of proof of damages and profits about which participants in the legislative history had so vigorously complained.
Section 101(b) directed the courts to make such awards in an amount that was “just,” but it also set a range within which statutory damage awards should be made: no less than $ 250 and up to $ 5,000 per infringement. To aid judges in determining the appropriate amount of compensatory statutory damages within this range, § 101(b) suggested specific amounts for common types of infringements (for example, $ 10 for every infringing copy of a painting, statue, or sculpture; $ 1 per infringing copy of other works; $ 50 for every infringing performance of a lecture, sermon, or address; $ 10 for every infringing performance of a musical composition, and so on). Newspapers and motion picture studios persuaded Congress to cap their potential liability for unwitting infringements. Section 101(b) also explicitly stated that statutory damages “shall not be regarded as a penalty.”
Cases interpreting this new provision articulated its purpose as granting fair compensation to copyright owners when “the rules of law render difficult or impossible proof of damages or discovery of profits.” In keeping with this purpose, some courts refused to order defendants to pay statutory damages when actual damages or profits could be proven. Indeed, the Supreme Court held that the 1909 Act’s statutory damage provision was inapplicable when damages and profits were proven. If a successful plaintiff had suffered only nominal or no damage, the minimum of $ 250 might be awarded, but no more, in keeping with the policy that statutory damages should not be a penalty. Courts sometimes also refused to impose any statutory damages when the evidence showed no harm to the copyright owner and no profits to the infringer. In keeping with the no-penalty rule, appellate courts sometimes reduced large statutory damage awards to the minimum in close, although ultimately unsuccessful, fair use cases. Occasionally, appellate courts reduced statutory damage awards that were excessive in relation to approximate damages or profits.
We base our conclusion that statutory damages under the 1909 Act were mainly compensatory in purpose on several factors. First, the structure of § 101(b) identifies actual damages and defendant’s profits as the primary remedies for infringement, and statutory damages as an “in lieu” remedy. Second, the legislative history of the 1909 Act, as well as the case law interpreting it, view the primary impetus for adopting statutory damages as providing some relief when damages and/or profits are difficult to prove. Third, in addition to providing a range within which statutory damage awards should be made and setting a cap to prevent excessive awards, § 101(b) proffered guidelines for what Congress considered to be reasonable damages for various types of works. Fourth, the case law interpreting the 1909 Act’s statutory damage provision generally focused on its compensatory function and respected the “no penalty” direction. This is not to say that statutory damage awards under the 1909 Act lacked deterrent purposes and functions. By setting a floor of $ 250 and giving courts discretion to award up to $ 5,000, Congress surely intended to deter infringement, but the compensatory impulse was most evident in the law as applied.