What is the definition of “willful copyright infringement” under the Federal Copyright Laws?
Whenever a company is faced with a legal demand letter (or an individual for that matter) dealing with the subject matter of federal copyright infringement due to having infringing songs, books, movies, ringtones, pictures, photos, videos, software, or other types of digital content that you can find on the internet, the “cease and desist” or “take down notice” (sometimes it is a DMCA takedown notice) normally claims that your company is a “willful infringer” of a federally registered copyright. But what exactly does this mean? What is the legal definition of “willful copyright infringement? This blog examines this internet law issue.
Legal definition of willful infringement
There are several different ways the concept of willful infringement is discussed. Here are what a few federal courts in the United States have said (most cases cited below come from the Ninth Circuit which covers Oregon, Washington, California, Arizona, Nevada, Idaho, Montana and Utah):
“A plaintiff sustains its burden of proving willfulness “by showing the defendant knew or should have known it infringed the Plaintiff’s copyrights. Willful copyright infringement does not require a showing of actual knowledge. To prove willfulness, plaintiffs may show that the infringer had actual or constructive knowledge that it was infringing the plaintiffs’ copyrights or that the infringer acted in reckless disregard of the high probability that it was infringing plaintiffs’ copyrights. Arclightz and Films Pvt. Ltd v. Video Palace, Inc., 303 F. Supp. 2d 356, 361-62 (S.D.N.Y. 2003); Microsoft Corp. v. Grey Computer, 910 F. Supp. 1077, 1091 (D.Md. 1995) (defendant’s business practices and knowledge of software industry and its licensing practices gave “rise to an inference that the infringement was willful”); Fitzgerald Pub Co., Inc, v. Baylor Pub. Co., Inc., 807 F.2d 1110, 1115 (2d Cir. 1986) (defendant’s actual or constructive knowledge proves willfulness). See also Cable/Home Commc’n Corp. v. Network Productions. Inc., 902 F.2d 829, 845 46 (11th Cir. 1990) (standard of knowledge for contributory infringement is objective); Basic Books, Inc. v. Kinko’s Graphics Corp., 758 F. Supp. 1522, 1543 (S.D.N.Y. 1991); Wow & Flutter Music, Hideout Records and Distributors, Inc. v. Len’s Tom Jones Tavern, Inc., 606 F. Supp. 554, 556 (W.D.N.Y. 1985); and Lauratex Textile Corp. v. Allton Knitting Mills Inc., 519 F. Supp 730, 733 (S.D.N.Y. 1981) (willfulness established by reckless disregard for a copyright owner’s rights).
The court will consider all relevant evidence, including direct evidence of willfulness in the form of employee and/or former employee testimony about how infringing copies came to be installed on defendants’ computers, and the number of unlicensed copies installed. See Chi Boy Music v. Charlie Club, Inc., 930 F.2d 1224, 1227 (7th Cir. 1991).
As one counsel for the Business Software Aliance informed us:
“We are prepared to present evidence of willfulness in this matter by proving that:
(1) your client was actually aware of the infringing activity,
(2) your client’s actions were either a “reckless disregard” or “willful blindness” of our client’s federally protected copyright interests. In re Aimster Copyright Litigation, 334 F.3d 643, 650 (7th Cir. 2003) (“willful blindness is knowledge, in copyright law”); and Int’l Korwin Corp. v. Kowalczyk, 855 F.2d 375, 380-81 (7th Cir. 1988) (in determining whether a violation is willful the trier of fact may consider evidence that the defendant ignored plaintiff’s notices about copyright protection, did not seek the advice of counsel, and passed the matter off as a nuisance).
Any deliberate effort to avoid culpable knowledge may constitute willful blindness. In re Aimster Copyright Litigation, 334 F.3d at 650. Any reckless disregard by defendant that its conduct possibly represented infringement may constitute willfulness. Yurman Design, Inc. v. PAJ, Inc., 262 F.3d 101, 112 (2d Cir. 2001) (to establish that a copyright infringer acted willfully, “a plaintiff is not required to show that the defendant had knowledge that its actions constituted infringement,” the plaintiff must merely show that the defendant recklessly disregarded such a possibility)
Case definition from Arizona Federal Court
“The Copyright Act does not define “willful,” but courts in the Ninth Circuit have *1020 held that “willful” means with knowledge that the defendant’s conduct constitutes infringement. See Peer Int’l Corp. v. Pausa Records, Inc., 909 F.2d 1332 (9th Cir.1990); see also Nimmer on Copyright § 14.04 (2007). At least one Circuit Court has held that on summary judgment, willfulness cannot be proved by constructive knowledge of infringement, but must be proved by evidence of the infringer’s actual knowledge. See Island Software & Computer Serv. v. Microsoft Corp., 413 F.3d 257, 260-65 (2d Cir.2005) (district court finding of willfulness on summary judgment reversed by the Second Circuit where defendant repeatedly denied actual knowledge, and where the district court had accepted the plaintiff’s evidence of constructive knowledge that showed a “reckless disregard” or “willful blindness” to the plaintiff’s interest).”
What are some common examples of willful federal copyright infringement?
How does a Defendant in a federal copyright infringement lawsuit attempt to negate a showing of willful infringement?
“To refute evidence of willful infringement, a defendant must not only establish its good faith belief in the innocence of its conduct, it must also show that it was reasonable in holding such a belief. Generally, a determination as to willfulness requires an assessment of a party’s state of mind, a factual issue that is not usually susceptible to summary judgment. Rather, the determination of willfulness is ordinarily a question of fact for the jury. See Hearst Corp. v. Stark, 639 F.Supp. 970, 980 (N.D.Cal.1986). However, where the relevant facts are admitted or otherwise undisputed, willfulness can be appropriately resolved on summary judgment. Although in reaching this decision, as in any summary judgment proceeding, the court must resolve questions of fact in favor of the non-moving party, here defendant, and must draw all justifiable factual inferences in the non-moving party’s favor. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
As these cases show, it is not always easy to say whether a copyright infringement is “willful” or just plain negligent. This is a big determination to make, given the differences in damages (see below) for copyright infringement. This highlights the importance of getting copyright counsel involved at the earliest possible stages of an alleged copyright infringement “cease and desist” or “take down notice” case.
Can I get popped for willful copyright infringement in a software licensing audit?
This is a charge we often see in a BSA or SIIA software licensing audit alleging federal copyright infringement. The software companies or their representatives will claim you are downloading and using software without paying for it and that this constitutes “software piracy” and intentional and willful copyright infringement. But it is one thing to make this allegation and quite another thing to prove it (needing to show the factors discussed above).
In many cases, the directors, officers and CEO’s and owners of the company are not aware of every single piece of software on their networks, computers, laptops and servers. This makes it much more difficult to show there is “willful infringement of copyrights” at work.
What are the damages and penalties for willful infringement?
VIDEO: Watch this video to learn more about the damages, penalties and fees that can arise if you or your company are sued in federal court and found to have committed infringement willfully.
As stated in the copyright laws:
“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.”
In UMG Recordings, Inc. v. Disco Azteca Distributors, Inc., 446 F. Supp. 2d 1164, 1173 (E.D. Cal. 2006), the East District discussed damages for willful copyright infringement:
“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 per work.”
Can a parent be held liable for their kids intentional copyright infringement?
Potentially. We have discussed the potential for parental liability in internet cases on another blog post.
Federal copyright law resources
2. BSA Software Defense (Michigan State Bar)
3. Verdict 1.92 million – Willful Copyright Infringement (24 copyrights infringed)
5. Copyright fair use & parody defense (Stanford)
Contact a Federal Copyright Law Firm
We can serve as local counsel for out-of-state Plaintiffs and Defendants in Arizona district courts and California district courts. If your company needs an internet lawyer or federal copyright attorney, give us a call to discuss your case. We can assist you with most any legal issue involving federal copyrights including BSA and SIIA software licensing audits, copyright bully defense, fair use, parody, federal copyright litigation, cyberloss subrogation, copyright creative commons disputes, youtube disputes, Craigslist, eBay and Amazon.com legal issues, and other cases arising under the U.S. Copyright Laws. We can be reached at (877) 276-5084 or fill out the form below to have one of our technology, internet attorney & intellectual property lawyers contract you.
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