What is the definition of “willful copyright infringement” under the Federal Copyright Laws?
JUMP TO VONDRAN LEGAL HOUR PODCAST EXPLAINING DEFINITION OF WILLFUL COPYRIGHT INFRINGEMENT
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.
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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)
As you can see, if you are a business owner you should probably have an idea of what's going on in the IT Department and know what software your business is using. Realistically, you should also have policies and procedures that address a “ software code of ethics” or having a social media policy or other policies and procedures to help make sure your company has plausable deniability. In the area of software piracy and copyright infringement, “ignorance” may not be a worthwhile defense.
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).” See ICG-Internet Commerce Grp., Inc. v. Wolf, 519 F. Supp. 2d 1014, 1019–20 (D. Ariz. 2007)
Second Circuit Definition
World Color maintains that its conduct cannot be willful as a matter of law because the district court found that it had a right to reprint Golden Legacy and did not maliciously intend to change Fitzgerald's copyright notices. This contention may be disposed of quickly. First, a court need not find that an infringer acted maliciously to find willful infringement. See Fallaci v. New Gazette Literary Corp., 568 F.Supp. 1172, 1173 (S.D.N.Y.1983); 3 Nimmer § 14.04[B] at 14–28. Second, whether World Color had the right to reprint Golden Legacy is not dispositive. The pertinent point is whether it had the right to reprint with the copyright notices changed. As just discussed, the Baylor-Fitzgerald contract, upon which World Color relied, did not give Baylor—and by extension, World Color—the right to change the notices.
Even in dismissing these arguments, the question remains as to what qualifies as “willfulness” for purposes of § 504(c)(2) of the Act. More specifically, given that World Color knew—as its own internal memoranda revealed—or should have known—as an experienced printing concern—that Baylor lacked the authority to change the notice, did it willfully infringe upon Fitzgerald's copyrights?
We have not had occasion to consider this question. One commentator has concluded that “willfully” means with knowledge that defendant's conduct represents an infringement. See 3 Nimmer § 14.04[B] at 14–28.
Defining knowledge, several district courts have held that something less than proof of actual knowledge will suffice to establish knowledge and, hence, willfulness. For example, one court found a willful infringement based upon the infringer's position—itself a publisher of a copyrighted newspaper—and its failure to appear and defend in the copyright action. Fallaci, 568 F.Supp. at 1173. Another court held that “reckless disregard” for the copyright holder's rights establishes knowledge of the infringement. Lauratex Textile Corp. v. Allton Knitting Mills, Inc., 519 F.Supp. 730, 733 (S.D.N.Y.1981).
We agree that a defendant's knowledge that its actions constitute an infringement establishes that the defendant acted willfully within the meaning of § 504(c)(2) for purposes of enhancing statutory damages.
Other language in § 504(c)(2) supports this conclusion. Congress there provided for a reduction in the minimum level of statutory damages should the defendant establish that it neither knew, nor had reason to know, that its conduct represented an infringement. Id. In other words, a defendant can claim the defense of “innocent intent” to reduce the amount of statutory damages.
It is plain that “willfully” infringing and “innocent intent” are not the converse of one another. Thus, it is possible in the same action for a plaintiff not to be able to prove a defendant's willfulness, and, at the same time, for the defendant to be unable to show that it acted innocently. But in indicating what conduct will reduce the penalty, the statutory language also suggests what conduct should increase the penalty. Thus, just as the lack of actual or constructive knowledge will establish an innocent intent, so a defendant's actual or constructive knowledge proves willfulness.
The district court implicitly used this standard in determining that World Color Press acted willfully in infringing Fitzgerald's copyright.
Reviewing this finding on the clearly erroneous standard, Fed.R.Civ.P. 52(a), we are convinced that the district court correctly concluded that World Color willfully infringed Fitzgerald's copyright. Two internal memoranda circulated by World Color acknowledged that all Baylor had received from Fitzgerald was the right to reprint Golden Legacy. The instructions from Baylor received by World Color on March 17th contained no indication that Baylor had obtained greater rights in Golden Legacy. Moreover, World Color had a copy of the Baylor-Fitzgerald contract on March 22, which we may assume it read, and—as an experienced publisher must have realized—that it contained no authorization to change the copyright notice. Fitzgerald Pub. Co. v. Baylor Pub. Co., 807 F.2d 1110, 1114–15 (2d Cir. 1986)
LITIGATION TIP: This case law does indicate that the “ burden of proof” is on the Plaintiff making the claim of willfulness. “Willful does not mean malicious, rather, it means with knowledge, whether actual or constructive.” See Basic Books, Inc. v. Kinko's Graphics Corp., 758 F.Supp. 1522, 1543 (S.D.N.Y.1991). LITIGATION TIP: “Constructive notice” means you were on notice of the infringement (even though you may not have actually been aware of it). “Alternatively, willfulness is shown where the defendant recklessly disregarded the possibility that its conduct represented infringement.” See Sega Enterprises Ltd. v. MAPHIA, 948 F.Supp. 923, 936 (N.D.Cal.1996). LITIGATION TIP: This is the “I don't give a crap if that is infringing or not” approach. “ Willful blindness is knowledge, in copyright law as it is in the law generally, a deliberate effort to avoid guilty knowledge is all the law requires to establish a guilty state of mind.” Willfulness need not be proven directly but may be inferred from the defendant's conduct. LITIGATION TIP: This is the “bury your head in the sand” approach to copyright law.
What are some common examples of willful federal copyright infringement?
1. Using a copy of a picture, image or photo on your website without the copyright owners consent (or without paying for it on a commercial website such as fotolia or Getty Images). A common infringement claim involving photos, gifs, jpegs, png's on websites is “I found the image on google images and it didn't have a copyright notice so I figured it was in the public domain.” This is a good way to get sued. Make sure you are buying or licensing your photos and other digital copyrighted content. It does not have to have the “C” or copyright symbol on the digital artwork to be protected by copyright laws. 2. Downloading an eBook (ex. as a proof reader) and copyright the book and selling it as your own on internet websites such as eBay, Craigslist and Amazon.com. Sure way to get sued for willful copyright infringement. 3. Downloading music and software on the internet on pirate websites (basically downloading expensive software programs, mp3 and other digital content without paying for it when you know or should know the artist, author, or software programmer expects to get paid for their work). 4. Cutting and pasting poetry, screenplays, comedy sketches, videos, and website content and claiming it as your own (maybe mixing up a few words here and there). I once had another law firm cutting and pasting my website verbatim (without so much as giving me an attribution link and cutting off my name entirely). Out of professional courtesy, I merely sent a copyright “ take down notice” but this could have easily been a case of willful copyright infringement. I don't mind people sharing my content under a copyright creative commons attribution license, but not claiming or passing it off as your own work. This is obviously just a short sample list. But I think you get the idea.
How does a Defendant in a federal copyright infringement lawsuit attempt to negate a showing of willful infringement?
As other federal copyright cases have held in regard to proving willful copyright 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:
Section 504(c)(2) of the Copyright Act provides in pertinent part: “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)
4. How copyright infringement lawsuits can affect your brand (Adweek)
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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