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Don?t Ignore Copyright Infringement Allegations

By Stephanie Robinson

It?s never a good idea for a business or individual accused of copyright infringement to simply ignore the allegations, hoping they?ll go away. This is particularly true when the copyright holder files a lawsuit seeking damages, as the defendant in Broadcast Music, Inc. v. Spring Mount Area Bavarian Resort, LTD., 2008 WL 2152060 (E.D. Pa. 2008), recently learned. Indeed, a failure to respond to allegations of copyright infringement may result in a finding that the infringement was willful, leading to a larger damages award. BMI is a collection of music recording companies, licensing companies, and affiliated artists that own the copyrights to various popular songs. Spring Mount operates Crazy Carol?s Sports Bar located in Schwenksville, Pennsylvania. BMI alleged that Crazy Carol?s performs, or causes to be performed, songs whose copyrights are owned by BMI. Between August 2005 and May 2007, BMI sent numerous ?cease and desist? letters to Spring Mount demanding that Spring Mount honor BMI?s copyrights and also placed nearly fifty telephone calls to Crazy Carol?s in an attempt to address the issue. BMI finally sent a representative to Crazy Carol?s to determine whether it was continuing to violate the copyrights. During a four-hour period, the representative documented extensive violations of the copyrights. Had Crazy Carol?s entered into a typical licensing agreement with BMI, licensing fees owed from August 2005 would have totaled approximately $10,000.00. Crazy Carol?s neither responded nor ceased the activity, and BMI filed suit against Spring Mount and an individual officer of Spring Mount for copyright infringement. BMI sought statutory damages, injunctive relief, costs, and attorney?s fees. Defendants did not answer the complaint or otherwise appear, and the clerk entered a default against Defendants. BMI then moved for default judgment, seeking statutory damages in the amount of $2,000.00 for each of eight violations, an injunction prohibiting further copyright infringement by Defendants, and more than $5,000.00 in attorney?s fees and costs. Because Defendants had not responded, the court accepted BMI?s allegations as true and found that Defendants were liable for eight instances of copyright infringement. The court also found that ?Defendants? default and their decision not to defend against these allegations are grounds for concluding that their actions were willful.? The court noted that this finding was also supported by evidence indicating that Defendants continued to infringe on the copyrights months after being notified. According to the court, ?Plaintiffs provided Defendants with clear and unambiguous notice that they were infringing Plaintiff?s copyrights, and Defendants nonetheless persisted in their unlicensed use.? Defendants? ?intransigence prior to the initiation of this litigation,? coupled with their refusal to appear, ?indicate a conscious decision to ignore this problem in the hope that it will simply go away.? That decision proved costly to Defendants. Under the Copyright Act, a court may increase the award of statutory damages up to $150,000.00 when it finds the infringement was committed willfully. The court concluded that the requested award of $2000.00 per infringement, although higher than the minimum statutory damages amount of $750.00, was just and appropriate under the circumstances. Similarly, the court found that it was appropriate to award attorney?s fees and costs and also allow interest on the damages, costs, and fees ?as a further incentive to Defendants to promptly and finally resolve this matter.? The result in Broadcast Music is a clear reminder that it is rarely a good idea to ignore a copyright infringement allegation because the refusal to respond to an allegation may be used as evidence that infringement was willful, resulting in a higher damages award.

Full post as published by Business and Technology Law on May 29, 2008 (boomark / email).