Statutory Damages, Remixes Headline 3rd Copyright Roundtable on Commerce Department’s Green Paper

The “goal” of statutory damages “may not be to deter and punish infringement,” but “to enhance creativity,” said George Borkowski, RIAA senior vice president-litigation and legal affairs. Creativity is enhanced by “deterring and punishing infringement, because otherwise the creators aren’t going to be creating,” he said. The idea of a “total damages cap” isn’t a “good idea, because each case is very fact-specific,” said Borkowski. The “guideposts” to help juries determine damages could be made “uniform, so that all juries and judges have to consider them,” he said. Increasing the court’s “flexibility to lessen the minimum statutory damages” for large infringements “would encourage large-scale infringement,” he said: “The more you infringe, the less you're on the hook for infringement.” The $150,000 statutory damages cap is “probably still too low,” because they're “almost never rewarded by the juries,” said Scott Burroughs, Doniger Burroughs copyright attorney. Infringers usually seek a “discouragement of profits,” which they see as a “cost of doing business” rather than a deterrent, he said. Burroughs cited a discrepancy in how statutory damages are applied to digital companies like Amazon and to brick-and-mortar companies. Amazon “could” have profited by selling an infringing product, even after removing it from its website under the Digital Millennium Copyright Act’s notice-and-takedown statute, and still claim safe harbor protections, he said. A brick-and-mortar company, like Wal-Mart, would be taken to court under strict liability, he said: “That probably needs to change.”

One “can’t always give a black-and-white answer” on copyright infringement to an individual or company that’s “really pushing the boundaries of technology,” said Teri Karobonik, New Media Rights staff attorney fellow. Karobonik asked whether the copyright community should re-evaluate the benefits of safe harbor claims if it costs “millions” in litigation. An iPhone with infringing music could be worth “$500 million,” said Morgan Pietz, founder of The Pietz Law Firm, which specializes in copyright and entertainment law: “That’s nuts.” A criminal who steals an iPhone with infringing material would receive a reduced punishment compared with the infringer, he said. “We need to substantially revise” statutory damages, he said. A “fundamental divide” must be created within statutory damages “between commercial and noncommercial infringement,” he said. “The enforcement of statutory damages is about as frequent as being hit by lightning, and the effects are about as severe,” said Pietz, who wants to “substantially cap” the damages. He proposed creating something “more akin” to a small claims court for “individual, noncommercial infringements.” Individual infringers can be “capable of a great deal of damage,” said Rachel Stilwell of the Law Offices of Rachel Stilwell, which specializes in copyright and entertainment law. RIAA’s Borkowski called the “life-ending” scenarios via statutory damages exaggerated.

To protect remixes, the “only” tool available to musicians is the “derivative right,” said Dina LaPolt of LaPolt Law, an IP and entertainment firm. “Any limitations on the derivative right,” such as a compulsory license, would “substantially devalue music,” she said. If an artist can’t clear a license for a remix or sample, “you can’t use it,” said LaPolt. Unless an artist can afford a “zealous advocate” who knows the music industry, music “licensing is pretty much closed off to you,” said New Media Rights’ Karobonik: “That’s problematic.” If you want a music license, hire a “smart” attorney and “get it done,” said LaPolt; if you can’t get a music license, “stop whining and complaining.”

"Copyright is a property right,” and the word “'remix’ is a misnomer,” said Jay Cooper, an entertainment lawyer with Greenberg Traurig. Artists aren’t “remixing, they're really mashing up” music, he said. Musicians are taking “property rights” and “doing what they want with it, which the client may or may not approve,” he said: It’s the client’s “right to approve or say no.” That intellectual property isn’t the same as tangible property is “very real,” because intellectual property has an expiration date, said Ty Turley-Trejo, Brigham Young University music licensing administrator. “I don’t understand why that would be,” said CEO Helene Muddiman of Hollywood Elite Composers. Copyright terms “last too long,” said Turley-Trejo. “Intellectual property is different from real estate,” because it’s “limited and that’s what the [U.S.] Constitution says,” he said, also citing intellectual property’s association with free speech as another differentiating factor.

The notion that protecting one’s copyright prohibits someone else’s “freedom of speech is nuts,” said Muddiman. “You can say whatever you like, just don’t use my music to embellish what you want to say,” she said. “If you want someone’s property,” you have to negotiate for it, “otherwise create your own property,” said Muddiman. “Copyright is not the same thing as real property,” said Karobonik. The “distinction” lies in intellectual property’s involvement with “free speech,” she said: “We need to keep fair use in mind” for remixes and other digital media, because it’s “one of the few ways that our First Amendment is being exercised on the Internet.”