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Copyrights - 17 USC Section 504
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01/19/04
Sec. 504. Remedies for infringement: Damages and profits
(a) In General. - Except as otherwise provided by this title, an
infringer of copyright is liable for either -
(1) the copyright owner's actual damages and any additional
profits of the infringer, as provided by subsection (b); or
(2) statutory damages, as provided by subsection (c).
(b) Actual Damages and Profits. - The copyright owner is entitled
to recover the actual damages suffered by him or her as a result of
the infringement, and any profits of the infringer that are
attributable to the infringement and are not taken into account in
computing the actual damages. In establishing the infringer's
profits, the copyright owner is required to present proof only of
the infringer's gross revenue, and the infringer is required to
prove his or her deductible expenses and the elements of profit
attributable to factors other than the copyrighted work.
(c) Statutory Damages. -
(1) Except as provided by clause (2) of this subsection, the
copyright owner may elect, at any time before final judgment is
rendered, to recover, instead of actual damages and profits, 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, in a sum of not less than $750
or more than $30,000 as the court considers just. For the
purposes of this subsection, all the parts of a compilation or
derivative work constitute one work.
(2) In a case where the copyright owner sustains the burden of
proving, and the court finds, that infringement was committed
willfully, the court in its discretion may increase the award of
statutory damages to a sum of not more than $150,000. In a case
where the infringer sustains the burden of proving, and the court
finds, that such infringer was not aware and had no reason to
believe that his or her acts constituted an infringement of
copyright, the court in its discretion may reduce the award of
statutory damages to a sum of not less than $200. The court shall
remit statutory damages in any case where an infringer believed
and had reasonable grounds for believing that his or her use of
the copyrighted work was a fair use under section 107, if the
infringer was: (i) an employee or agent of a nonprofit
educational institution, library, or archives acting within the
scope of his or her employment who, or such institution, library,
or archives itself, which infringed by reproducing the work in
copies or phonorecords; or (ii) a public broadcasting entity
which or a person who, as a regular part of the nonprofit
activities of a public broadcasting entity (as defined in
subsection (g) of section 118) infringed by performing a
published nondramatic literary work or by reproducing a
transmission program embodying a performance of such a work.
(d) Additional Damages in Certain Cases. - In any case in which
the court finds that a defendant proprietor of an establishment who
claims as a defense that its activities were exempt under section
110(5) did not have reasonable grounds to believe that its use of a
copyrighted work was exempt under such section, the plaintiff shall
be entitled to, in addition to any award of damages under this
section, an additional award of two times the amount of the license
fee that the proprietor of the establishment concerned should have
paid the plaintiff for such use during the preceding period of up
to 3 years.
HISTORICAL AND REVISION NOTES
HOUSE REPORT NO. 94-1476
In General. A cornerstone of the remedies sections and of the
bill as a whole is section 504, the provision dealing with recovery
of actual damages, profits, and statutory damages. The two basic
aims of this section are reciprocal and correlative: (1) to give
the courts specific unambiguous directions concerning monetary
awards, thus avoiding the confusion and uncertainty that have
marked the present law on the subject, and, at the same time, (2)
to provide the courts with reasonable latitude to adjust recovery
to the circumstances of the case, thus avoiding some of the
artificial or overly technical awards resulting from the language
of the existing statute.
Subsection (a) lays the groundwork for the more detailed
provisions of the section by establishing the liability of a
copyright infringer for either "the copyright owner's actual
damages and any additional profits of the infringer," or statutory
damages. Recovery of actual damages and profits under section
504(b) or of statutory damages under section 504(c) is alternative
and for the copyright owner to elect; as under the present law, the
plaintiff in an infringement suit is not obliged to submit proof of
damages and profits and may choose to rely on the provision for
minimum statutory damages. However, there is nothing in section 504
to prevent a court from taking account of evidence concerning
actual damages and profits in making an award of statutory damages
within the range set out in subsection (c).
Actual Damages and Profits. In allowing the plaintiff to recover
"the actual damages suffered by him or her as a result of the
infringement," plus any of the infringer's profits "that are
attributable to the infringement and are not taken into account in
computing the actual damages," section 504(b) recognizes the
different purposes served by awards of damages and profits. Damages
are awarded to compensate the copyright owner for losses from the
infringement, and profits are awarded to prevent the infringer from
unfairly benefiting from a wrongful act. Where the defendant's
profits are nothing more than a measure of the damages suffered by
the copyright owner, it would be inappropriate to award damages and
profits cumulatively, since in effect they amount to the same
thing. However, in cases where the copyright owner has suffered
damages not reflected in the infringer's profits, or where there
have been profits attributable to the copyrighted work but not used
as a measure of damages, subsection (b) authorizes the award of
both.
The language of the subsection makes clear that only those
profits "attributable to the infringement" are recoverable; where
some of the defendant's profits result from the infringement and
other profits are caused by different factors, it will be necessary
for the court to make an apportionment. However, the burden of
proof is on the defendant in these cases; in establishing profits
the plaintiff need prove only "the infringer's gross revenue," and
the defendant must prove not only "his or her deductible expenses"
but also "the element of profit attributable to factors other than
the copyrighted work."
Statutory Damages. Subsection (c) of section 504 makes clear that
the plaintiff's election to recover statutory damages may take
place at any time during the trial before the court has rendered
its final judgment. The remainder of clause (1) of the subsection
represents a statement of the general rates applicable to awards of
statutory damages. Its principal provisions may be summarized as
follows:
1. As a general rule, where the plaintiff elects to recover
statutory damages, the court is obliged to award between $250 and
$10,000. It can exercise discretion in awarding an amount within
that range but, unless one of the exceptions provided by clause
(2) is applicable, it cannot make an award of less than $250 or
of more than $10,000 if the copyright owner has chosen recovery
under section 504(c).
2. Although, as explained below, an award of minimum statutory
damages may be multiplied if separate works and separately liable
infringers are involved in the suit, a single award in the $250
to $10,000 range is to be made "for all infringements involved in
the action." A single infringer of a single work is liable for a
single amount between $250 and $10,000, no matter how many acts
of infringement are involved in the action and regardless of
whether the acts were separate, isolated, or occurred in a
related series.
3. Where the suit involves infringement of more than one
separate and independent work, minimum statutory damages for each
work must be awarded. For example, if one defendant has infringed
three copyrighted works, the copyright owner is entitled to
statutory damages of at least $750 and may be awarded up to
$30,000. Subsection (c)(1) makes clear, however, that, although
they are regarded as independent works for other purposes, "all
the parts of a compilation or derivative work constitute one
work" for this purpose. Moreover, although the minimum and
maximum amounts are to be multiplied where multiple "works" are
involved in the suit, the same is not true with respect to
multiple copyrights, multiple owners, multiple exclusive rights,
or multiple registrations. This point is especially important
since, under a scheme of divisible copyright, it is possible to
have the rights of a number of owners of separate "copyrights" in
a single "work" infringed by one act of a defendant.
4. Where the infringements of one work were committed by a
single infringer acting individually, a single award of statutory
damages would be made. Similarly, where the work was infringed by
two or more joint tortfeasors, the bill would make them jointly
and severally liable for an amount in the $250 to $10,000 range.
However, where separate infringements for which two or more
defendants are not jointly liable are joined in the same action,
separate awards of statutory damages would be appropriate.
Clause (2) of section 504(c) provides for exceptional cases in
which the maximum award of statutory damages could be raised from
$10,000 to $50,000, and in which the minimum recovery could be
reduced from $250 to $100. The basic principle underlying this
provision is that the courts should be given discretion to increase
statutory damages in cases of willful infringement and to lower the
minimum where the infringer is innocent. The language of the clause
makes clear that in these situations the burden of proving
willfulness rests on the copyright owner and that of proving
innocence rests on the infringer, and that the court must make a
finding of either willfulness or innocence in order to award the
exceptional amounts.
The "innocent infringer" provision of section 504(c)(2) has been
the subject of extensive discussion. The exception, which would
allow reduction of minimum statutory damages to $100 where the
infringer "was not aware and had no reason to believe that his or
her acts constituted an infringement of copyright," is sufficient
to protect against unwarranted liability in cases of occasional or
isolated innocent infringement, and it offers adequate insulation
to users, such as broadcasters and newspaper publishers, who are
particularly vulnerable to this type of infringement suit. On the
other hand, by establishing a realistic floor for liability, the
provision preserves its intended deterrent effect; and it would not
allow an infringer to escape simply because the plaintiff failed to
disprove the defendant's claim of innocence.
In addition to the general "innocent infringer" provision clause
(2) deals with the special situation of teachers, librarians,
archivists, and public broadcasters, and the nonprofit institutions
of which they are a part. Section 504(c)(2) provides that, where
such a person or institution infringed copyrighted material in the
honest belief that what they were doing constituted fair use, the
court is precluded from awarding any statutory damages. It is
intended that, in cases involving this provision, the burden of
proof with respect to the defendant's good faith should rest on the
plaintiff.
AMENDMENTS
1999 - Subsec. (c)(1). Pub. L. 106-160, Sec. 2(1), substituted
"$750" for "$500" and "$30,000" for "$20,000".
Subsec. (c)(2). Pub. L. 106-160, Sec. 2(2), substituted
"$150,000" for "$100,000".
1998 - Subsec. (d). Pub. L. 105-298 added subsec. (d).
1997 - Subsec. (c)(2). Pub. L. 105-80 substituted "the court in
its discretion" for "the court it its discretion".
1988 - Subsec. (c)(1). Pub. L. 100-568, Sec. 10(b)(1),
substituted "$500" for "$250" and "$20,000" for "$10,000".
Subsec. (c)(2). Pub. L. 100-568, Sec. 10(b)(2), substituted
"$100,000" for "$50,000" and "$200" for "$100".
EFFECTIVE DATE OF 1999 AMENDMENT
Pub. L. 106-160, Sec. 4, Dec. 9, 1999, 113 Stat. 1774, provided
that: "The amendments made by section 2 [amending this section]
shall apply to any action brought on or after the date of the
enactment of this Act [Dec. 9, 1999], regardless of the date on
which the alleged activity that is the basis of the action
occurred."
EFFECTIVE DATE OF 1998 AMENDMENT
Amendment by Pub. L. 105-298 effective 90 days after Oct. 27,
1998, see section 207 of Pub. L. 105-298, set out as a note under
section 101 of this title.
EFFECTIVE DATE OF 1988 AMENDMENT
Amendment by Pub. L. 100-568 effective Mar. 1, 1989, with any
cause of action arising under this title before such date being
governed by provisions in effect when cause of action arose, see
section 13 of Pub. L. 100-568, set out as a note under section 101
of this title.
Last modified: April 20, 2006
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