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Risks of HUGE copyright infringement damages if you Default

Posted by Steve Vondran | Aug 01, 2022

Attorney Steve® Copyright Law Essentials - Damages for Infringement of Copyright and Trademark

copyright infringement under the microscope


Unauthorized duplication of computer software products and use of unlicensed computer software products constitute copyright infringement.  Using trademarks, logos, slogans, and other trademarks without authorization, and causing consumer confusion, can create liability for trademark infringement.

Under the Copyright Act, damages per work infringed can reach $150,000 if "willfulness" is shown.

Officers and Directors can be personally liable for copyright infringement despite the so-called "corporate veil"  where they had the ability to supervise and a financial interest in the infringement (ex., saving licensing fees).

This blog presents a few case examples of what you risk if you (a) don't resolve your software audit, (b) it goes to litigation, and (c) you default (ex. cannot afford to litigate against a deep-pocket Plaintiff).


Here is some good case law to consider if you think of "defaulting" on a software infringement lawsuit or fighting in court.   

As you can see, you would be taking a pretty huge risk.

Lowry's Reports, Inc. v. Legg Mason, Inc., 302 F. Supp. 2d 455, 458 (D. Md. 2004) (statutory damages award of $19,725,270 awarded to copyright holder).

Fair Use defense denied: The burden of proving the affirmative defense of fair use rested upon Legg Mason. Montgomery County Association of Realtors, Inc. v. Realty Photo Master Corp., 878 F. Supp. 804, 811, n. 12 (D. Md. 1995). The jury could reasonably find that Olszewski's July 11 deposition testimony was correct and that Cripps continued to improperly use copies of the Reports. Dennis v. Columbia Colleton Med. Ctr., 290 F.3d 639, 644-45 (4th Cir. 2002)HN12 (judgment as a matter of law is proper only when a reasonable jury could rule in only one party's favor). Further, the jury may simply not have credited Legg Mason's fair use of evidence based on Olszewski's deposition and Thayer's conflicting testimony. 10/1 Tr. at 13-14; id. At 34-35. That Phase III infringement occurred after Legg Mason had promised to stop copying the Reports could also have been a factor in the jury's fair use analysis. Harper & Row, Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 549, n. 3, 85 L. Ed. 2d 588, 105 S. Ct. 2218 (1985) (fair use is an "equitable rule of reason"). Accordingly, Legg Mason is not entitled to judgment as a matter of law on its fair use defense for Phase III infringement.

It is therefore ORDERED that the defendants, and all persons under the defendants' control, are enjoined from, in any manner, directly or indirectly, unlawfully reproducing, distributing, preparing derivative works from, performing, or displaying publically any tangible or electronic copy of any issue, or a portion, of Lowry's New York Stock Exchange Market Trend Analysis and copyrighted portions thereof.
The facts of this case are discussed in Lowry's Reports, Inc. v. Legg Mason, Inc., 271 F. Supp. 2d 737 (D. Md. 2003). In brief, Lowry's accused Legg Mason of using Lowry's New York Stock Exchange Market Trend Analysis ("the Reports") in a manner that infringed its copyrights and breach of contract. On October 3, 2003, a jury found Legg Mason liable to Lowry's  [*458]  for breach of contract and wilful copyright infringement and awarded $ 19,725,270.00 in damages

Fox News Network, LLC v. Does 1-10, 20-cv-00200-AJT-MSN [Doc. 81] (E.D. Va., Feb. 11, 2021) (statutory damages award of $4,150,000.00 in trademark action);

This matter is before the Court on the Report and Recommendation [Doc. No. 80] of the Magistrate Judge recommending that Plaintiffs' Motion for Default Judgment be granted and default judgment be entered in favor of Plaintiffs Fox News Network, LLC, Fox Media, LLC, ("Fox News Plaintiffs") and Laura Ingraham's ("Ingraham") (collectively, "Plaintiffs") in the amount of $4,150,000.00. ORDERED that judgment be, and the same hereby is, ENTERED in favor of Plaintiffs Fox News Network, LLC, Fox Media, LLC, and Laura Ingraham and against website Defendants,, and in the amount of $4,150,000.00 in statutory damages against each website Defendant, jointly and severally, to include an award of pre-judgment interest as of the date the Complaint was filed, see and post-judgment interest on the damages award; and it is further ORDERED that Defendants, their officers, agents, servants, employees, attorneys, or other persons who are in active concert or participation with any of them be, and the same hereby are, permanently ENJOINED from making, using, selling, or offering for sale unauthorized products containing the Fox News or Laura Ingraham trademarks

Electronic Creations Corp. v. Gigahertz, Inc., 2013 WL 3229125 (N.D.N.Y. 2013) (statutory damages award of $150,000 plus attorney's fees for infringement of ONE WORK);

Defendants did not obtain permission or a valid license from Plaintiff to copy, distribute, alter, display, host, sell, or promote the copyrighted works. The design of Defendants' sites was done with the purpose of copying materials from existing webpages, publishing and displaying those materials on Defendants' websites, and submitting the infringing sites to internet search engines. (Id.) Defendants frequently distorted, blocked, or otherwise made Plaintiff's copyright notices unviewable.

According to 17 U.S.C. § 504(c), a plaintiff in an action for copyright infringement shall be entitled to statutory damages of "not less than $750 or more than $30,000" for "all infringements involved in the action, with respect to any one work, as the court considers just." 17 U.S.C. § 504(c)(1). However,  if the infringement is deemed to have been committed "willfully," the court may increase the award of statutory damages up to a sum of $150,000 per infringed work. 17 U.S.C. § 504(c)(2). "Statutory damages for copyright infringement are available without proof of plaintiff's actual damages or proof of any damages." All-Star Mktg. Group, LLC v. Media Brands Co.., 775 F. Supp. 2d 613, 626 (S.D.N.Y. 2011) (internal quotations omitted).

When determining the appropriate amount of statutory damages, the Court considers the following six factors:

(1) the infringer's state of mind;

(2) the expenses saved and profits earned by the infringer;

(3) the revenues lost by the copyright holder;

(4) the deterrent effect on the infringer and third parties;

(5) the infringer's cooperation in providing evidence concerning the value of the infringing material;


(6) the conduct and attitude of the parties. Bryant v. Media Right Prods., Inc., 603 F.3d 135, 144 (2d Cir. 2010).

Moreover, because actual damages would be hard to prove, statutory damages are appropriate. Plaintiff is seeking statutory damages in the amount of $150,000. To prove "willfulness" under the Copyright Act, the plaintiff must show

(1) that the defendant was actually aware of the infringing activity,


(2) that the defendant's actions were the result of "reckless disregard" for, or "willful blindness" to, the copyright holder's rights. Island Software and Comp. Serv., Inc. v. Microsoft Corp., 413 F.3d 257, 262 (2d Cir.2005)  (where the defendant recklessly disregarded the possibility that its conduct represented infringement).

Here, Defendants took the time to cover the copyright notices on Plaintiff's website. Defendants should also know that their software—which was designed to copy other websites—would be infringing the copyrights and trademarks that are owned by those websites. The statutory damages in the present case are appropriate due to the willful and egregious disregard by the Defendants and their actions. This should also serve as a deterrent not only to the current Defendant but as a general deterrent to others who may contemplate engaging in this "fake hack" infringing behavior in the future. All-Star Mktg. Grp., 775 F. Supp. 2d at 627.

ORDERED that a PERMANENT INJUNCTION be entered in favor of Plaintiff Electronic Creations Corporation against Defendants David Brown (a/k/a David Browne) and Gigahertz, Inc., its officers, directors, principals, agents, servants, employees, and successors, and all other persons in active concert or participation with them, enjoining and restraining them from doing the following:

Montblanc-Simplo GmbH v. Ilnitsky, 2018 WL 844401 (E.D. Va. 2018) (statutory damages judgment of $32,150,000 on copyright/trademark claims);

ORDERED that default judgment be and is entered against defendant Miroslav Ilnitskiy on Counts 2, 3, and 4 of the First Amended Complaint in the total amount of $32,150,000.00 (consisting of $150,000 in statutory damages for violations of the Copyright Act and $2 million in statutory damages for each of the 16 identified trademark violations under the Anticounterfeiting Consumer Protection Act), with prejudgment interest calculated in accordance with Va. Code § 6.2-302 and accruing from August 17, 2015 until the date of entry of judgment and postjudgment interest calculated in accordance with 28 U.S.C. § 1961 and accruing from the date of entry of judgment.


If you or your company is facing a copyright or trademark infringement matter, it is important to find a way to settle it out of court.  If not, and if you are found liable, you could be facing significant financial penalties, and officers and directors of a company could be held PERSONALLY LIABLE (meaning your personal assets are at stake).  We handle copyright infringement claims, including software infringement, software piracy, fair use defense, jewelry, and fabric design copyright cases, copyright small claims (opt-out), Strike 3 Holding BitTorrent Defense, photo and image infringement, TV signal piracy cases (MPA/ACE/Dish-Nagrstar) and Boxing Piracy claims (ex. Joe Hand Promotions). 

We can be reached at (877) 276-5084 or leave us a message through our contact form.  We have helped HUNDREDS of clients resolve legal disputes, including through arbitration and mediation.  We were also identified as the NUMBER ONE copyright infringement defense law firm in the UNITED STATES for both 2020 and 2021 (poised to repeat in 2022) by in terms of the number of cases handled.

About the Author

Steve Vondran

Thank you for viewing our blogs, videos and podcasts. As noted, all information on this website is Attorney Advertising. Decisions to hire an attorney should never be based on advertising alone. Any past results discussed herein do not guarantee or predict any future results. All blogs are written by Steve Vondran, Esq. unless otherwise indicated. Our firm handles a wide variety of intellectual property and entertainment law cases from music and video law, Youtube disputes, DMCA litigation, copyright infringement cases involving software licensing disputes (ex. BSA, SIIA, Siemens, Autodesk, Vero, CNC, VB Conversion and others), torrent internet file-sharing (Strike 3 and Malibu Media), California right of publicity, TV Signal Piracy, and many other types of IP, piracy, technology, and social media disputes. Call us at (877) 276-5084. AZ Bar Lic. #025911 CA. Bar Lic. #232337

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