I never did very well in math – I could never seem to persuade the teacher that I hadn’t meant my answers literally.  ~Calvin Trillin

We are often asked (by “we” we mean Ed) what is the formula the Federal Courts use to determine the amount of statutory damages a copyright holder can be awarded if successful at trial? Remember that statutory damages are monies that you may receive only if you have registered your work in a timely fashion ie. before publication or within three months of publication.

While there is no specific, algebraic or algorithmic type formula to compute such amounts, just a few weeks ago the United States Circuit Court of Appeals for the 2nd Circuit in New York provided a list of the factors the federal trial courts should employ in coming up with the amount of such awards. In Louis Psihoyos v. John Wiley & Sons, Inc. the court generated a decision which is quite good for photographers on several levels, others of which will shortly be the subject of another article in this blog.

Both paraphrasing and quoting from the court’s decision – it held that with respect to willful infringements and statutory awards:

1. When a copyright holder proves that the infringement was willful and statutory damages are available, the Court can award up to $150,000;

2.  The jury had found two willful violations and awarded the photographer $100,000 on one and $30,000 on the other.  The defendant appealed those awards claiming in effect, that such amounts had no relationship to the financial harm or “actual damages” suffered by the photographer.

Here’s the good part. We added the italics for emphasis. The Appeals Court upheld the awards and ruled that:

A.  Revenue lost by the author may be relevant but there need not be any correlation between statutory damages and actual damages.

B.   In setting the appropriate amount of statutory damages the courts (whether by a judge or jury) ought consider (at least) the following factors and then use its discretion in arriving at a final amount:

* the infringer’s state of mind;
* the expenses saved, and profits earned, by the infringer;
* the revenue lost by the copyright holder;
* the deterrent effect on the infringer and third parties;
* the infringer’s cooperation in providing evidence concerning the value of the infringing material; and
* the conduct and attitude of the parties.

The above list is not necessarily exhaustive. If for example, the infringer could not have turned out the product, item or image without violating some law, that would play a role in the court’s decision. So if the infringing product/image incorporated the face of a model or celebrity who would never have given consent to such use even if the photographer would have (if paid), that factor would play heavily in the Court’s arithmetic.

So to create an extreme example of a common scenario:

Sally Photographer photographs Cardinal Timothy Dolan of the Archdiocese of New York. She promptly registers the image on May 2, 2014 the day after she shot the portrait.  On June 3, 2014, “Enjoy Condoms and Birth Control Pills” comes out with a line of products called “Father No More” with Sally’s photo of Fr. Dolan’s emblazoned on the product packaging.  No consent or license to use the photo was ever sought from either the photographer or clergyman.

Let’s assume for the moment that the Sally would have agreed to having one of her other images used for this purpose for the right price. In no event would the she license this image as she had no model release from the Cardinal for any commercial use nor would she even dream of asking him for consent to use his image on condoms. The Cardinal we can all safely assume, would never under any circumstances have granted his permission to use his image for this purpose and that fact would be painfully obvious to the folks at “Enjoy” as well as to the members of any jury.

In such a scenario the fact that the infringer had engaged in activity that would have been impossible without trampling on the legal rights of others, would play a considerable role in affecting the amount of any statutory award. These situations typically arise where a photo of a celebrity is stolen from the photographer and used for purposes without even trying to obtain the celebrity’s consent because such consent would come at a price the infringer could not hope to pay. Welcome to the worlds of Internet commerce where such bogus goods are sold daily and crime pays.

Again, more on this case, Psihoyos v. John Wiley & Sons, to follow.