Federal Infringement Penalty Constitutional, DoJ Says
Federal law’s minimum $750 penalty per infringed work is constitutionally sound, the Justice Department said in a brief filed with the only court to finish a P2P trial. P2P defendant Jammie Thomas, ordered to pay $222,000 to the major labels for infringement (WID Oct 5 p2), had filed a challenge to the ruling in the U.S. District Court in Duluth, Minn., on grounds that the DMCA’s infringement statute violates the Due Process Clause by requiring that high a penalty for so little harm. Justice has said in previous P2P lawsuits it was just waiting for a fully briefed case to weigh in on the statute (WID Aug 1 p7).
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Justice told the court it doesn’t need to consider Thomas’s motion, because she didn’t raise the constitutionality defense at trial. Other defendants have challenged the statute’s constitutionality early in briefing (WID Aug 2 p8). Thomas consented to jury instructions that said the minimum penalty for willful infringement, which Thomas was found to have committed, was $750, the agency said. If the court deals with the matter, it should deal with it as an as-applied challenge restricted to this case and not a broad challenge to the statute, on its face. Judge Michael Davis granted the agency’s motion to intervene Thursday.
The Supreme Court’s decisions on punitive damages shouldn’t apply to this case as Thomas contends, DoJ said. “Statutory damages, specified by Congress, are distinct from the unregulated use of punitive damages by a jury.” The high court has blessed jury-awarded damages a hundred times higher than actual damages because they fell within the statutory range, the agency said. The Supreme Court’s punitive damages framework uses a much tougher standard than its “deferential” approach to statutory damages. And punitive damages have an element of “retribution,” whereas statutory damages “serve to deter a public wrong from being committed” and provide compensation when it’s difficult to calculate actual damages, Justice said. Statutory damages, unlike punitives, also put the public on notice of what they can expect if they are found liable, it said.
The infringement damages statute dates from the nation’s founding, Justice said. Back then, an infringement cost 50 cents for every sheet of paper copied without authorization. Common law before then recognized that a work was “the product of intellectual labor” and just as much a piece of property as the physical medium, Justice said. The statutory range for penalties has been upheld in court since 1919, the agency said. The U.S. can’t just scrap its statutory infringement penalties, under several free trade agreements with other countries, it said.
The latest amendments to the statute preceded the rise of Napster, when Congress found in 1999 that pirated software represented a quarter of sales, Justice said. Lawmakers clearly intended to deter piracy by raising the statutory damage. Since “potentially millions” of people downloaded songs from Thomas’s computer, it’s fitting that the labels opted for statutory damages, the agency said. Quoting the Copyright Office: “The actual damages capable of proof are often less than the cost to the copyright owner of detecting and investigating infringements.” The harm to the copyright owner can’t be judged by the infringer’s profits -- in this case nothing, Justice said.