Two Courts Address Constitutional Limits On Copyright Statutory Damages

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In two high-profile cases, the U.S. Court of Appeals for the First Circuit and a district court in Minnesota recently addressed the constitutional limits on statutory damage awards under the Copyright Act. Both cases involved illegal downloading of music by individuals that resulted in juries awarding extraordinarily large statutory damages — $675,000 in one case and $1.5 million in the other. The two cases provide guidance on the procedures for addressing arguably excessive jury awards in copyright cases and what courts may view as the maximum statutory damages permitted under the U.S. Constitution.

The Copyright Act provides for statutory damages ranging from $750 to $150,000 for each copyrighted work infringed. See 17 U.S.C. § 504(c). Because statutory damages are awarded on a per-work basis, cases involving large numbers of infringed works can sometimes result in total damage awards far greater than $150,000. In particular instances, a jury's award may be so excessive in relation to the defendant's wrongful conduct that it violates the Constitution's Due Process Clause, even though the award is within the range permitted by the Copyright Act.

Courts also have a non-constitutional tool to correct excessive jury awards called remittitur, a process in which a court can reduce a jury award, but the plaintiff may reject it and instead proceed to a new trial on damages. The two recent court decisions addressed these constitutional and procedural methods for correcting excessive statutory damage awards.

Sony BMG Music Entertainment v. Tenenbaum, 100 U.S.P.Q. 2d 1161 (1st Cir. 2011)

The defendant in Tenenbaum was a college student who downloaded and made available to others thousands of music recordings using his parents' home computers. At trial, he was found to have infringed the copyrights on 30 recordings. The jury awarded statutory damages of $22,500 for each infringed recording, resulting in a total award of $675,000. The defendant moved for a new trial or, alternatively, remittitur. The trial court, however, reasoned that remittitur would be futile because, in the court's view, the plaintiff would never accept the reduced damage award and a new trial would result in yet another excessive award.

Instead, the district court ruled that the jury's award violated due process and reduced the award to $67,500, or $2,250 per song. The $2,250 per-recording award was equivalent to three times the...