It has been a long time since we discussed statutory damages in this space. Statutory damages are, of course, the high monetary damages that rights holders can elect when they sue someone for infringement. Instead of having to prove the actual harm they suffered, statutory damages presume that harm and make proving it unnecessary. In the U.S., statutory damages can be as high as $150,000 per infringing act (see 17 U.S. Code section 504(c)). This is a number that the content industries love to throw around, especially as part of the highly-fictionalized warning you see at the beginning of DVDs.
Back in 2009, when the recording industry was actively suing its own customers for copyright infringement because of file-sharing, statutory damages were briefly a hot topic after juries returned million-dollar verdicts against ordinary individuals for downloading files the actual value of which was less than $100. At the time I wrote about this issue, and also linked to another lawyer’s blog post which argued that these statutory damages were likely unconstitutional. Since the RIAA has taken its campaign for ever-stronger copyright enforcement and ever-steeper penalties in a different direction, there has been less conversation about these disproportionate penalties.
This week, however, a development in Europe has reminded me that we should not let this issue drop. Last week Poland’s Constitutional Court released a ruling which effectively declares Poland’s own take on statutory damages a violation of the Polish Constitution. Polish law, it seems, enacts the same policy of allowing increased damages, well beyond ordinary judicial remedies, for copyright infringement with a provision that allows tripling of the “respective remuneration that would have been due at the time of claiming it in exchange for the rights holder’s consent for the use of the work” (see Article 79 of the English translation of Poland’s copyright law here, on the WIPO site). What this essentially says is that triple the actual harm done (the amount the rights holder would have been due) can be awarded as a form of statutory damages. And the Polish Constitutional Court has now decided that that provision must be changed because it violates a constitutional provision ensuring equality of protection for property ownership. It seems they are concerned that the Polish copyright law gives a level of protection to copyrighted property that is much greater than other forms of property.
It is interesting to compare this situation to what we find in U.S. law. We do not, of course, have the same provision about equal protection for copyright ownership in our Constitution. The Constitutional case against statutory damages is made more on the grounds of due process, where the damages are so in excess of the harm that they are unreasonable, out of proportion, and unfair to defendants. Still, there is intuitive sense to the idea that copyrighted works are protected far more comprehensively and stringently than most other kinds of property, If this is true in Poland, and the Polish Court thinks it is, it is certainly even more the case in the U.S.
Consider two points. First, in the Jamie Thomas file sharing case, the relationship between the actual harm — it would have cost about $24 for her to buy the songs at issue — and the 1.9 million dollar verdict against her, was much more disproportional than the triple damages that concerned the Polish court. If a factor of 3 was too much for the Polish court to accept, a multiplier of nearly 800,000 ought to shock every U.S. court and every U.S. citizen. Second, it is important to notice the different types of parties involved in the Polish case; it involved a cable TV network that apparently rebroadcast some films without a license. So corporate entities were involved, and the Polish Court still felt that tripling the damages was unfair. Yet in the U.S. we have allow grossly more disproportionate damages to be awarded against private citizens.
The content industry often looks to Europe and to other international laws and agreements they can use to convince U.S. lawmakers to increase protection for copyrighted works. Here we have an international court pointing the other way; showing us in the U.S. how out of whack our copyright law has become in the area of statutory damages. Something tells me this will not be an example cited by the MPAA or the U.S. Trade Representative. But as Congress and the Copyright Office discusses reforming the copyright law, this finding from the Constitutional Court of Poland should shame us into looking at statutory damages here in America and recognizing that this is a problem in desperate need of remedy.
The author’s apparent confusion between “distribution” of infringing works (as was the case in Capitol vs. Thomas) and simple “downloading” of infringing works is awfully surprising, and borders on obtuse, which starts us off on very bad footing.
The $24 he cites is apropos of nothing – the Polish law allows for a penalty equivalent to the license fee for infringing *distribution* of content, which is the basic statute that Thomas violated, and which her ultimate $222k judgment fairly well represents. The “cost . . . to buy” language is just poor slight of hand here, and an unfortunate strawman.
Most importantly, we haven’t been given the facts about whether or not the Polish award was essentially statutory. There seems to be no discussion here about the math the Polish court used to get to a judgment of 2.2 percent of UPC Poland revenues, and whether a calculation of actual damages was done at all, or with any rigor. That’s the real, basic, interesting question to be asked by this author. I think that before he heads down this rabbit hole of exponential postulation, he should clarify whether the court even said what he thinks it said.
I’m admittedly not a scholar on Mr. Smith’s scholarship, but these mistakes seem surprising for someone with his pedigree.