A recent decision in the United States District Court for the Southern District of New York discussed, and ruled upon, several issues of importance concerning copyright infringement and damages.

         The case is Arclightz and Films Pvt. Ltd. v. Video Palace, Inc. Arclightz is the producer of a motion picture entitled Asoka. The film was released theatrically in the United States on October 26, 2001. Authorized DVD's of the film were not slated for release until February 2002. However, in October and November 2001, DVD's and VHS editions of the film were being sold by defendant, a wholesaler and retailer of music and motion pictures.

         The plaintiffs obtained an order of seizure and had the United States Marshal's Service seize the VHS and DVD copies of the film. They also discovered over forty video copying machines on the second floor of the store. "Caught red-handed," the defendant conceded liability for copyright infringement, but contested the amount of damages sought.

         Plaintiffs contended that the reproduction and the distribution of the material were two separate and distinct infringements and therefore they were entitled to statutory damages for two infringing uses. The court refused to accept this distinction, stating that the number of original works infringed (i.e. one movie) determined how many separate infringements occurred. The court then found the infringement to be willful because the defendant had actual or constructive knowledge that it was infringing the plaintiffs' copyrights. This was evidenced by defendant's openly renting and selling unauthorized copies of the movie without any copyright notice or acknowledgment of plaintiffs' rights.


         The court, however, awarded only $750, the minimum statutory damages allowable. This award was based upon several stated factors, including that the defendant conceded liability, and was a small business with limited revenue. The most important factor, however, may have been that it had offered a settlement in excess of the profits it received, which had been rejected by the plaintiffs. The court reasoned that the deterrence goal of the statutory damages provision of the Copyright Act would be amply served by this award when it was coupled with the additional award of attorneys fees and costs in excess of $22,000.

         Some may question whether a minimum statutory damage award where the defendant was caught red-handed with machines to illegally reproduce copyrighted material, and where plaintiffs attempted to pursue statutory damages in excess of defendant's minimal profits, is the proper amount of the remedy to deter future copyright infringements. However, from the defendant's point of view, when the award is added to plaintiffs' attorneys fees and expenses, and its own attorneys fees and expenses, it demonstrates that willful infringement of copyright could indeed be very expensive.

Attorney Joel L. Hecker lectures and writes extensively on issues of concern to the photography industry. His office is located at Russo & Burke, 600 Third Ave, New York NY 10016. Phone: 1 212 557-9600. E-mail: Heckeresq@aol.com.

           

Tommy Thompson

Kerry Kolb

Jon Saban

Jake Nelson