Jonathan Zavin on Arista Records LLC v. Lime Group LLC

  By Jonathan Zavin of Loeb & Loeb LLP

USDC S.D. New York, April 7, 2011    

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  • In copyright infringement litigation against peer-to-peer network, court denies defendants' motion that would have precluded plaintiffs from recovering a statutory damage award from defendants for sound recordings for which plaintiffs have already recovered a statutory damage award from an individual direct infringer with whom defendants are jointly and severally liable.  

On May 11, 2010, the court granted summary judgment to plaintiff record companies on their claims against defendants for secondary copyright infringement. Defendants were affiliated with the LimeWire online file-sharing network, and the court found that they had induced hundreds if not thousands of users of LimeWire to use the system to infringe plaintiffs' copyrights.

The litigation is now in the damages phase, with a trial on damages scheduled for May 2, 2011.

On March 10, 2011, the court held that plaintiffs are entitled to a single statutory damage award from defendants for each "work" infringed, notwithstanding that many individual direct infringers may have infringed that particular work on the LimeWire system.

In this decision, the court addressed the defendants' assertion that plaintiffs are precluded from recovering a statutory damage award from defendants with respect to 104 sound recordings for which plaintiffs have already recovered a statutory damage award from an individual direct infringer with whom defendants are jointly and severally liable. The court stated that there is little guidance on this issue because the issue of whether a plaintiff should be precluded from recovering a statutory damage award from a secondarily liable inducer, with respect to those sound recordings for which that plaintiff has already obtained a judgment against an individual direct infringer, "has never been addressed."

Section 504 of the Copyright Act provides that a copyright owner may elect to recover "an award of statutory damages for all infringements involved in the action, with respect to any one work, for which any one infringer is liable individually, or for which any two or more infringers are liable jointly and severally." The court held that this language "does not speak to the issue of whether an award in one action precludes an award in a later action. Specifically, Section 504 does not state that a copyright owner is limited to a single statutory damage award for each work, no matter how many actions the owner brings. Rather, the language, 'all infringements involved in this action,' is included in Section 504 to make clear that a plaintiff copyright owner may obtain only one statutory damage award per work in any one action, regardless of the number of times that a particular work is infringed."

According to the court, Section 504 speaks about limiting statutory awards based on infringements involved in "this action"; it does not speak to precluding statutory awards across different actions. "The statute does not state that an award of statutory damages against a defendant in one action has an effect on a statutory award against a different defendant in a different action."

The court also stated that with respect to those 104 works for which plaintiffs have recovered a statutory damage award from a direct infringer, it will be permissible for the fact-finder to consider that plaintiffs have already recovered from a direct infringer for some portion of the infringement that defendants induced, because defendants are jointly and severally liable with those direct infringers.

For more information, please contact Jonathan Zavin at jzavin@loeb.com or at 212.407.4161.

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