Berne, Baby Berne
Court upholds registration requirement as prerequisite for statutory damages and attorney’s fees

The United States became a member of the Berne Convention for the Protection of Literary and Artistic Works effective March 1, 1989.  The Berne Convention is the foremost multilateral copyright treaty in effect today; most of the economically significant countries in the world adhere to it.  The most significant accomplishment of the Berne Convention was to eliminate the requirement of any “formalities” as a prerequisite to copyright protection.  I’ve always thought of this as the “black tie optional” rule for copyright; works are protected by copyright in Berne member countries even if they are published without a copyright notice and if they are never registered for copyright protection.  Before the U.S. signed onto Berne, works published without a copyright notice risked injection into the public domain.  Today, works are protected from the moment they are fixed in a tangible medium of expression, without need for notice or registration. 

Registration remains essential, however, for the enforcement of copyright in domestic works and for the availability of certain remedies.  Under Section 412 of the Copyright Act, in order to be eligible to recover statutory damages for infringement and attorney’s fees, a copyright owner must have registered the work before the infringement began (or within three months of first publication of the work).  Statutory damages are critical in cases where it is difficult to prove actual damages, and provide copyright owners with significant leverage in settlement negotiations.  Thus, Section 412 acts as a powerful incentive for authors and owners to register their works promptly. 

In Elsevier B.V. v. UnitedHealth Group, Inc., 2010 U.S. Dist. LEXIS 3261 (S.D.N.Y. Jan. 14, 2010), the Southern District of New York addressed the question whether, by virtue of the Supremacy Clause, the Berne Convention supersedes Section 412 with respect to unregistered foreign works.  In other words, may plaintiffs suing to enforce copyrights in unregistered foreign works recover statutory damages and attorney’s fees?  The answer hinged on whether Berne was a “self-executing” treaty under U.S. law – that is, a treaty which becomes law upon ratification.  By contrast, Congress must affirmatively enact treaties which are not self-executing in order for their provisions to take effect under domestic law.  

The court concluded that the Berne Convention was not self-executing.  In adopting the Berne Convention Implementation Act, Congress explicitly stated that the treaty was “not self-executing under the Constitution and the laws of the United States”; that U.S. obligations under Berne “may be performed only pursuant to appropriate domestic law”; and that U.S. copyright law, as amended by the Implementation Act, satisfied U.S. obligations under Berne.  Moreover, Article 36 of Berne itself states that the treaty is not self-executing:

“(1) Any country party to this Convention undertakes to adopt, in accordance with its constitution, the measures necessary to ensure the application of this convention. 

(2) It is understood that, at the time a country becomes bound by this Convention, it will be in a position under its domestic law to give effect to the provisions of this Convention.” 

Congress passed the Implementation Act specifically to revise U.S. law to comply with the Berne Convention.  Though the Implementation Act amended other sections of the Copyright Act, it deliberately left Section 412 unchanged.  For instance, Congress eliminated the requirement in Section 411(a) that foreign works be registered as a prerequisite to maintain an infringement action, finding the requirement to constitute a prohibited formality.  On the other hand, Congress concluded that the statutory incentives for registration in Section 412 “are not preconditions for the ‘enjoyment and exercise’ of copyright” because “they do not condition the availability of all meaningful relief on registration, and therefore are not inconsistent with Berne.” 

Because the Berne Convention was not self-executing, the court concluded that it could not preempt Section 412 of the Copyright Act.  Owners of foreign works who might seek to enforce their copyrights in the United States would thus be well advised to register their works in order to maximize the tools and remedies available to them in the event of infringement.

Tenenbaum Tries, Tries Again
Seeks New Trial or Reduction of Damages Award

Joel Tenenbaum rang in the New Year by seeking a new trial or, alternatively, a reduction of the $675,000 award of statutory damages imposed by a jury last summer for his illegal file-sharing activities.  Attempting to capitalize on favorable language in the court’s opinion rejecting his fair use defense, Tenenbaum’s motion trumpeted the court for becoming “the first to recognize a fair use interregnum for copyright infringement following the debut of Napster.”  Tenenbaum can’t be blamed for trying to turn lemons into lemonade, but the court recognized no such thing, though it plainly wished to rule otherwise.  At most, the court speculated that a file sharer “might” be able to rely on a fair use defense under certain limited circumstances not applicable to Tenenbaum’s conduct, such as by swapping files during the time period “before digital media could be purchased legally, but [] later shift[ing] to paid outlets.”

Fair use

Tenenbaum devoted much of his brief to rehashing the same fair use arguments that the court already (properly) rejected.  After praising the court for supposedly establishing the so-called “fair use interregnum,” Tenenbaum faulted the court for cutting it off before his file-sharing was detected in August 2004 due to the fact that “a commercial market for digital music had fully materialized” by then.  According to Tenenbaum, early online sellers of digital music did nothing to alleviate the injustice of having to purchase entire CD’s rather than individual songs because they employed encryption technology which restricted purchasers’ ability to transfer songs between different media players.  This “boxed music consumers like Tenenbaum into an unfair choice” until the music industry began offering unrestricted copies of songs for sale online in 2007.  Tenenbaum also reasserted his “attractive nuisance” argument – that the music industry lured Tenenbaum and other consumers into wrongdoing with their marketing strategies – and bemoaned anew the conscription of parents and universities as “copyright police to regulate internet use” by children and students.  None of these arguments is likely to persuade the court that it made a mistake in rejecting Tenenbaum’s fair use defense, which remains, as the court succinctly noted, “completely elastic, utterly standardless, and wholly without support.” 

Statutory damages and due process

Tenenbaum buried his most interesting, and potentially most successful, argument at the end of the brief – that the $675,000 statutory damages award is so grossly excessive that it violates his Constitutional right to due process.  The Supreme Court has held that statutory damages violate due process where they are “so severe and oppressive as to be wholly disproportioned to the offense and obviously unreasonable.”  St. Louis, I.M. & S. Ry. Co. v. Williams, 251 U.S. 63, 67-68 (1919).  In Williams, the Court upheld a $75 statutory damages award against a railroad that had overcharged passengers by 66 cents per ticket.  Relying on the Williams standard, Tenenbaum contrasted the “bankrupting” size of the award with his conduct, which he characterized as “at most comparable to shoplifting music from a record store.”  Assuming a purchase price of 99 cents per song, Tenenbaum calculated that the ratio between the award and the actual damage to the plaintiffs was 22,500 to 1 – far in excess of the 113 to 1 ratio which the Williams Court found acceptable.    

The shoplifting analogy is a compelling one.  The consequences for theft can be severe, but it is almost inconceivable that Tenenbaum would have been assessed a six-figure penalty for walking out of a record store with a handful of CD’s stuffed under his jacket.  The methodology he used to arrive at his 22,500:1 ratio is flawed in that it fails to account for the fact that a single song, made available over a peer-to-peer system, could be copied innumerable times, thus resulting in more than one lost sale to the plaintiffs.  Nonetheless, the award is strikingly high given the nature of the offense.  The judge has already expressed considerable sympathy for Tenenbaum and distaste for the record industry’s strategy of suing individual file sharers; the argument that a penniless college student should not be bankrupted for a relatively petty offense could well resonate with the court.  

Tenenbaum also argued that the damages award violated due process under the standard applied to punitive damages.  A punitive damages award which is “grossly excessive” in relation to the state’s interest in punishment and deterrence enters “the zone of arbitrariness that violates the Due Process Clause of the Fourteenth Amendment.”  BMW v. Gore, 517 U.S. 559, 568 (1996).  Courts examine three “guideposts” to determine whether punitive damages are appropriate: (1) the degree of reprehensibility of the defendant’s conduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the damages award; and (3) the difference between the award and the civil penalties authorized or imposed in comparable cases.  Id. at 575.  Tenenbaum contended that his conduct was not reprehensible, involving only economic harm not motivated by intentional malice and conduct that “even now many see as having been unauthorized but not morally wrong”; that the Supreme Court has noted that “few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process”; and that statutory damage awards in file-sharing cases in which the defendants lost by default or on summary judgment have been limited to the minimum possible statutory damage amount. 

In citing Williams as the standard for assessing the appropriateness of a statutory damages award in the copyright context, and addressing Gore as an alternative argument, Tenenbaum departed from the post-trial strategy employed by Jammie Thomas-Rasset, the other file sharer to seek modification of a massive statutory damages award.  Thomas-Rasset was found liable for copyright infringement for sharing 24 songs, and a jury initially awarded the plaintiffs $222,000.  The court vacated that award due to concerns over the propriety of the jury instructions concerning liability.  After a second trial, Thomas-Rasset was again found liable, and the jury awarded the plaintiffs $1.9 million in damages.  Thomas-Rasset moved for a new trial, relying primarily on the standard set forth in Gore, essentially conflating the two tests (“The Due Process jurisprudence that is today embodied in BMW v. Gore has its roots in Williams, a case involving statutory damages”).  


Tenenbaum then argued that if the court does not grant him a new trial, it should reduce the statutory damages award to the minimum amount.  Remittitur is appropriate where an award is “grossly excessive, inordinate, shocking to the conscience of the court, or so high that it would be a denial of justice to permit it to stand.”  Here, Tenenbaum’s strategy mirrored Jammie Thomas-Rasset’s; she also sought remittitur as an alternative to her due process argument.  The court recently granted Thomas-Rasset’s request, reducing the $1.9 million award to $54,000. 

Tenenbaum argued that Congress set the currently applicable range of statutory damages to combat large-scale commercial piracy of software over the Internet, but did not intend to subject consumers like Tenenbaum to the upper limit of available damages.  According to Tenenbaum, Congress sought to remedy the tremendous costs of software piracy to software companies, their employees and the economy – concerns that sound strikingly familiar in the music file-sharing context – but that it envisioned imposing those damages on those who made the software available for download on a widespread basis and not the individuals who actually downloaded them.  Of course, Tenenbaum himself placed songs in the shared folder of his hard drive, making them available for download to anyone within his peer network, so it is unclear how, in practical effect, his conduct differed from that of the software pirates, except perhaps in degree. 

Moreover, Tenenbaum offered no justification for why the minimum statutory damages amount is the appropriate award, as opposed to some other amount.  This omission underscores the difficulty associated with his request; namely, how the court can defensibly set a damages award within such a large range of potential statutory damages.  Perhaps the court will look for guidance to the recent decision in the Thomas-Rasset case; there, the judge settled on a trebling of the minimum award per sound recording as the appropriate amount, based on treble damage provisions in other federal statutes.

The Department of Justice, intervening to defend the constitutionality of the Copyright Act’s statutory damages provisions, and the plaintiffs have submitted their briefs opposing Tenenbaum’s motion.  A hearing is scheduled to occur on February 23, 2010.

Stop! In the Name of Copyright – Interim Copyright Office Regulation Exempts Mandatory Deposit of Online Works

Effective February 24, 2010, electronic works published in the United States only in online, and not physical, form will be exempt from mandatory deposit unless the Copyright Office makes a demand for deposit of such works. The interim regulation will identify categories of online works subject to demand, the first of which will be electronic serials. The regulation will also establish procedures for issuing and responding to a deposit demand; redefine the term “complete copy” as applied to deposit of online-only works; and establish criteria for determining the “best edition” of online works to be deposited. The Copyright Office will seek comments on the implementation of the regulation later in 2010. A more detailed discussion of the contents of and rationale behind the interim regulation can be found at 75 Fed. Reg. 3863.

It is important to remember that mandatory deposit is distinct from the deposit requirement associated with registration. Copies deposited with an application for registration serve to identify the work. The purpose of mandatory deposit, on the other hand, is to provide the Library of Congress with an archival copy of all works published in the United States. Although copyright registration is optional, all copyrightable works that are published in the United States (with limited exceptions) are subject to mandatory deposit.

Within three months of publication, two copies of the “best edition” of every copyrightable work must be deposited with the Copyright Office. No application for registration need accompany the mandatory deposit; however, a deposit made in connection with registration will satisfy the mandatory deposit requirement.

At any time after a work is published, the Register of Copyrights may demand the required deposit copy. If the required deposit is not made within three months of this demand, the person or entity obligated to make the deposit may be liable for a fine, plus the retail price of the copies. Copyright Office Circular 7d discusses the requirements of mandatory deposit in more detail.