07 October 2003

Another doh! copyright decision that somehow comes as a surprise to the infringer—an infringer that should bloody well know better. Today's Baltimore Sun (H.L. Mencken's once-upon-a-time haunt) carries an announcement of the jury's verdict in the Legg-Mason interoffice copying scandal. After American Geophysical Union and Michigan Document Services, Legg-Mason really should not be surprised.

   What happened is something like this, according to the jury's findings: Legg-Mason, a major brokerage and mutual fund company, subscribed to a single copy of a stock research newsletter from Lowry's Reports. Using its internal e-mail system, Legg-Mason systematically copied the newsletter to around 1300 of its employees. As bad as this sounds, it gets worse: Legg-Mason received and acknowledged a cease-and-desist letter from Lowry's, but nonetheless continued the practice.

   Not too surprisingly, the jury found this conduct willful, and smacked Legg-Mason with $50,000 per infringed newsletter before the C&D letter, and $100,000 per each infringed newsletter thereafter. (The jury could have assessed $150,000 per infringed newsletter once it found willful infringement.)

   This is a no-brainer. That's a pretty good description of the kind of counsel Legg-Mason got, if it got any at all, regarding this practice. In American Geophysical Union v. Texaco, 60 F.3d 913 (2d Cir. 1994), and Princeton University Press v. Michigan Document Svcs., 99 F.3d 1381 (6th Cir. 1996) (en banc), the courts made it pretty clear that wholesale redistribution—even for academic purposes, as alleged in Michigan Document Services—of copyrighted material is an infringement unless specifically licensed. However, since neither of those opinions comes from the Fourth Circuit (which includes Maryland), attorneys whose practice does not focus on copyright very well might not be familiar with them. (Giving advice in an area in which one is not qualified is a no-brainer of a different kind, and usually requires notifying one's malpractice carrier.) Or, of course, management might well have decided that whatever advice it got from counsel did not require it to conform to pretty obvious law.

   There are so many bits of irony in here that I don't know where to begin… except, perhaps, to note that Legg-Mason itself puts out copyrighted market research materials…