Eighth Circuit Upholds Damages Award of $9,250/song for Willful Infringement OF the Copyright Act

September 20, 2012

Tuesday, September 18, 2012, by Drew Hargrove
This month, in Capital Records, Inc. et al. v. Thomas-Rasset et al. the Eighth Circuit held that a trial court’s award of $220,000 ($9,250 per song) in damages for willful copyright infringement was not a violation of due process.  
In 2005, several record companies began investigating potential copyright infringements.  In conducting this investigation the record companies discovered Jammie Thomas-Rasset’s username and song files on KaZaA, a peer-to-peer file sharing internet service.  The record companies filed suit under 17 U.S.C. §106 of the Copyright Act. 
The case reached the Eighth Circuit after three jury trials.  In the first trial, the district court judge instructed the jury that sharing files of songs downloaded without permission is a violation of the Copyright Act, regardless of whether there is proof of “actual distribution.” The jury found in favor of the record companies and it awarded them $220,000 in damages ($9,250 per song).
A new trial was granted because the trial court found that it had erred in instructing the jury that the Copyright Act can be violated without proof of “actual distribution.”  However, in the new trial, the jury awarded the record companies $1,920,000 in damages ($80,000 per song).  The judge remitted the entire verdict to $54,000. Subsequently, the record companies filed for a new trial. 
In the third trial the jury awarded the record companies $1,500,000 in damages ($62,500 per song) but the judge, again, reduced the verdict to $54,000 and held that $54,000 was the maximum damages allowed under the Due Process Clause.  The record companies appealed, seeking reinstatement of the verdict of the first jury trial.
At appeal, the Eight Circuit Court noted that the Supreme Court has found that “Congress possesses a ‘wide latitude of discretion’ in setting statutory damages.” Since the damages assessed were statutory, not punitive, the court concluded that the damages were not, as the Supreme Court has found, “so severe and oppressive as to be wholly disproportionate to the offense and obviously unreasonable.”  The court added that the damages awarded by the jury were well within the range provided by 15 U.S.C § 504(c) of the Copyright Act.  The fact that the defendant’s willful infringement was “noncommercial” was irrelevant because “Congress was well aware of the threat of noncommercial copyright infringement when it established the lower end of the [statutory damages] range.”
Unfortunately, the Eight Circuit did not weigh in on whether plaintiffs must show that the alleged copyright infringer “actual distributed” the copyrighted material, which will perpetuate confusion amongst trial courts.