As previously noted the day after the opinion issued on this blawg, encouragement of others to infringe is not "a new doctrine for copyright." The Second Circuit explicitly included "inducement" within the scope of contributory infringement over thirty years ago (Gershwin Publ. Corp. v. Columbia Artists Mgmt., 443 F.2d 1159, 1162 (2d Cir. 1971)), and the discussion in the seminal case on vicarious infringement (Shapiro, Bernstein & Co. v. H.L. Green Co., 316 F.2d 304 (2d Cir. 1963)) did much the same even earlier. Justice Day considered the problem of inducing others to infringe—admittedly in different and inelegant language—in the piano roll case (White-Smith Music Publ. Co. v. Apollo Co., 209 U.S. 1, 7 (1908) ("The primary use and adaptation of the thing determines its copyrightability or infringement of copyright. Intention as to use is material and may be controlling.") (argument of appellee as cited in syllabus, consistent with brief)). And "incitement" to infringe goes back to the 18th century, in cases concerning the measure of damages against a plagiarist (and the derivative liability of the printer who printed the plagiarist's "work").
Calling "inducement" a "new" theory of liability is historically inaccurate. It is also logically unsound; the "right and ability to control" prong of vicarious liability clearly could be satisfied through inducing others to act. This is even within the ordinary dictionary definition of "vicarious", see Merriam-Webster Collegiate Dictionary (10th ed.) (def. 2).
Then, too, there's the irony that in support of "progress" an advocate for high tech and "progress" via the Internet would be attacking "progress" in copyright doctrine if the assertion that this is a "new" doctrine is correct. This is another logical problem with the whole argument. The argument presumes that all progress in technology and its applications is necessarily good, but would refuse that judgment to progress in law. Cf. Edison v. Lubin, 122 F. 240, 242 (3rd Cir. 1903) (motion pictures can be copyrighted, although the then-effective copyright statute explicitly stated only "photographs").
The bulk of the screed, however, concerns opposition to statutory damages in copyright actions. Mr von Lohman says:
Why is legal uncertainty in this context particularly chilling to innovators? First, and most important, is copyright's statutory damages regime. Unlike nearly every other area of law, copyright allows plaintiffs to skip proving actual damages and instead collect statutory damages, which a court may set between $750 and $30,000 per work infringed. So when secondary copyright claims are made against mass market products like the iPod, CD burners or file-sharing software, all of which are regularly used by customers to make copies of millions of works, statutory damages become a corporate death penalty. Insurance is unavailable for risks of this size and a claim against one product can sink an entire company. In contrast, patent law has no similar provision, nor do most other countries around the world.
(emphasis in original) Ah, now we see the objective. The real problem isn't with the doctrine of liability, but with what can be done to remedy it.1 The contrast with patent law, however, is rather troubling—because it does not consider one aspect of patent damages that is not part of copyright law: implied license fees. Copyright "actual damages" seldom consider what a "reasonable license" would have cost, and virtually never establish an ongoing license rate for further use. Then, too, one is left with the troubling question of what statutory damages are intended to do. They are not just a means of compensation—but of deterrence. That is true for all varieties of statutory damages, both inside intellectual property and elsewhere. See, e.g., US v. Ursery, 518 U.S. 267, 292 (1996) (Kennedy, J., concurring) ("we long have held that this purpose [deterrence] may serve civil as well as criminal goals"); Tull v. US, 481 U.S. 412, 422–25 (1987) (Clean Water Act). In other words, statutory damages are justified precisely because they might "sink an entire company."
A deterrent purpose for statutory damages is unusually well aligned with the means/ends dichotomy enshrined in the Intellectual Property Clause itself. Unlike virtually all of Congress's other powers, the Founders believed it necessary to state not just the power itself, but its rationale.2 The Commerce Clause does not require Congress to have any particular rationale in "regulat[ing] Commerce with foreign Nations, and among the several States, and with the Indian Tribes;" any rationale at all will do, so long as it is consistent with the grant of power—which is unrestricted. However, the IP Clause provides a rather extraordinary right—an exclusive right. A monopoly. Given that the damages caused by an improper monopoly are at best speculative—we can try to infer what the price for a given article might have been but for the monopolization, but it's never better than an argument among purported experts—the converse case (determining damages to the rightholder for violation of a proper monopoly) is equally compelling.3
Then, too, there's the question of "excessiveness" of statutory damages. The critical language that Mr von Lohman's piece fails to acknowledge is "up to." When justified by the evidence, the judge may choose to impose huge statutory damages—but is not obligated to do so. The judge has considerable discretion to tailor the damages to the facts, even within the realm of statutory damages.4 Mr von Lohman's article emphasizes the twice-struck-by-lightning extreme case and uses it as justification to eliminate that variety (not level) of remedy for all cases. This is disingenuous, to say the least; and that is aside from the poor logic underlying it. Avoiding reductio ad absurdem is supposed to be part of basic logic, and surely there is enough time spent in law school on the value of "slippery slope" arguments (or, usually, absence of it).
Unfortunately, I've come to expect this kind of reasoning from EFF on copyright issues. The organization and its spokespeople would do well to remember that the Internet is not the only source of "Progress of Science and useful Arts."
- This seems a curious argument, to say the least, in an opinion piece that criticizes the Court for answering a question different than the one(s) the parties asked. The proper scope of statutory damages was not an issue raised in this appeal!
- The only "exceptions" are the Militia Clauses (14 and 15)—but these also concern powers elsewhere explicitly shared with the individual states.
- The counterargument that disgorgement of profits would be sufficient neglects two critical factors. First, the harm to the holder is seldom well-aligned with the benefit to the infringer in intellectual property actions; that is one reason that injunctions get so much emphasis in litigation (aside from the fun of arguing them). Second, that gets us into the morass of defining what "profit" is in this context—and one need not try to puzzle out why almost no film ever shows a "net profit" to see the difficulties.
- (update, 1210) I should also have noted that Mr von Lohman's assertion that no other country in the world allows statutory damages for copyright infringement is counterbalanced by attorney's fees. Only in the US is a winning copyright claimant not automatically entitled to costs and attorney's fees. Although the statute allows for such a recovery, it is increasingly rare in the face of the four Fogerty factors to actually obtain such a recovery in all but the most egregious cases. In a sample of 220 cases in which the plaintiff prevailed from the Second, Seventh, and Ninth Circuits that terminated between 1997 and 2001, I found only 27 in which the plaintiff was awarded attorney's fees—and a dozen of them reduced the fee award substantially based on "partial success."