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No Punitive Damages Under Federal Copyright Law

By Stephanie Robinson

Viacom?s well-publicized court fight against YouTube and Google his given Judge Louis Stanton of the U.S. District Court for the Southern District of New York an opportunity ? or, perhaps more accurately ? a good reason to now repudiate one of his prior decisions that seemed to leave the door open for punitive damages in copyright infringement cases. In Blanch v. Koons (2004), though she was able to prove willful infringement on the part of the defendants, the plaintiff found herself unable to pursue a claim for statutory damages under the Copyright Act, because she had not registered the works at issue before the infringement occurred. Moreover, she could not pursue actual damages, because she had sustained none that she could prove. However, Judge Stanton gave the plaintiff leave to amend her complaint ?so that [she] has a chance to prove malice and raise squarely the question whether punitive damages are available to her.? The court?s decision was based largely on suggestions from other courts that such damages might be available, but despite the fact that nowhere in its text does the Copyright Act purport to allow awards of punitive damages for proven infringement, willful or otherwise. However, this month, Judge Stanton reconsidered his earlier ruling in light of Viacom?s claims against YouTube and Google that the ubiquitous video sharing service is liable for the unauthorized copying and distribution of Viacom?s copyrighted content. In the pending case, Viacom relied upon the court?s decision in Blanch to move for leave to amend its complaint to include a punitive damages claim (despite the availability to Viacom of the full array of ordinary copyright protections for the content alleged to have been infringed). Judge Stanton denied the motion and made clear in surprisingly blunt terms that, to the extent that the opinion in Blanch was good law, it had been roundly rejected by other courts and commentators. As the court here held: ?It is time to extinguish the ignis fatuus held out by Blanch. Common-law punitive damages cannot be recovered under the Copyright Act.? Businesses facing claims of copyright infringement clearly should take them very seriously indeed, as the damages explicitly allowed under the Copyright Act can be substantial, especially where it is possible to prove willful infringement. However, if it ever was a concern, the need to factor in potential punitive damages into an exposure estimate now seems (once again) to have no practical utility whatsoever. It will be interesting to watch the Viacom case as it progresses through the trial and (no doubt) appellate stages. With the implications of the case as weighty as they are, it is likely that this will not be the last time a court uses the case as a vehicle to explain or confirm existing law, or, conceivably, make new law based on the facts and arguments presented.

Full post as published by Business and Technology Law on April 03, 2008 (boomark / email).