Stop, thief! How to win big in a copyright infringement case – art business journal

It’s heartbreaking to find your artwork on a t-shirt at Forever 21 or as an image on someone’s blog without your permission. The theft of your intellectual property, also known as an infringement, is not that different from any theft of your property — except you can’t go to the police to help you get justice.

Unfortunately, enforcing your rights and being properly compensated for the infringement often becomes your responsibility in the form of filing a lawsuit, which can be time-consuming. Even worse? It often costs more money in legal fees than you would receive from winning the suit.

As a way around this conundrum, the U.S. Congress included a “statutory damages” provision in the Copyright Act to ensure that artists receive guaranteed compensation for an infringement along with making any infringement case easier and faster to litigate.

What are statutory damages and how can you get them if your artwork is used without your permission? Let’s find out.

What qualifies as an infringement of artwork?

Before you can initiate any action against a party who has used your artwork without permission, they must have violated your copyright. So let’s first review what copyright protects and when and how that protection goes into effect.

Your creative work receives copyright protection as soon as your creative idea is “fixed in a tangible medium.” That means that ideas are not protected, only the physical expression of that idea. A painting, a sketch on a napkin, or even a photo displayed on an iPhone, are all physical mediums that are subject to copyright protection.

The copyright holder (usually the creator but could also be a company or other entity) has the exclusive right to make copies, publicly display, distribute, and create derivatives of the artwork. Any person or entity that violates these rights is an infringer and subject to legal action. More importantly, copyright is a no-fault law so it doesn’t matter why or how the violation occurred. If the copyright holder’s rights are violated, it is an infringement. Period.

The idea is to encourage a self-enforcement mechanism where people and entities check to make sure that the images they use have the requisite permissions. If they don’t, they may pay a lot more through a lawsuit against you.

Here is an example to illustrate the concept.

Let’s say Jack grabs your artwork from your personal website and uploads it to a website he created called Stock Art Online, where he sells all his stolen digital art to make some extra cash. Jill is looking for an image to use in her blog article and finds your artwork on Stock Art Online. She then purchases it and makes it her blog article’s featured image.

Obviously, Jack who intentionally copied, then publicly displayed the artwork on his site, and distributed the artwork to Jill, is guilty of infringement. But, Jill is also guilty of infringement for displaying your artwork on her blog. It doesn’t matter that she legally purchased the artwork and was unaware that it was stolen. She is an infringer and subject to legal action just like Jack

Due to the no-fault aspect of Copyright law, most infringement cases do not revolve around whether there was an infringement, but rather on how much money the copyright holder should receive for the violation.

Copyright registration is like having art insurance

Since there is no agency, like the police or FBI, that enforces copyright violations, it is up to the copyright holder to enforce their rights through a lawsuit or other legal action..

Unfortunately, the high cost of a lawsuit often makes it more expensive to sue the infringer than the damage award that the copyright holder receives from the lawsuit. Statutory damages alleviate this problem. To understand how statutory damages work, let’s look at what happens in a traditional lawsuit with non-statutory damages.

How does a traditional infringement lawsuit work?

In a traditional infringement lawsuit with non-statutory damages, the copyright holder can win:

actual damages PLUS a percentage of the profits that are attributed to the infringement.

Actual damages represent the money that would have been received if the artist had sold or licensed it to the infringer. To illustrate this concept, let’s continue with the infringement scenario discussed earlier.

Suppose you were suing Jill for her use of your artwork on her blog. Your fee for licensing work to a blog is $400, so the actual damage is the loss of that licensing fee. The fact that you would never have licensed the work to Jill’s blog or that she would never have paid $400 for it is immaterial.

The percentage of the profit can be much trickier to calculate. Again, let’s use our previous scenario.

Jill’s site requires a paid membership, from which she makes $1000 per month. Your artwork has been on her site for exactly one month and that blog article generated 10% of all views that month. The blog article is worth 10% of $1,000 or $100.

Through various calculations, the court has determined that 25% of the people that viewed the article got there because they liked the picture they saw while the other 75% clicked on the article because of the title and content. So, of the $100 value attributed to the article, only $25 is attributable to your artwork.

Even worse, from the $25, Jill can deduct a portion of her business expenses, such as web hosting fees, marketing expenses, rent, and more.

In the end, you may only be entitled to a maximum non-statutory damage award of around $420. Since any lawsuit will cost upwards of $5,000 plus all the time and effort, it clearly doesn’t pay to enforce your rights.

The result is that Jill isn’t penalized and you receive nothing for the infringement. In fact, Jill could likely continue to use the image since it is unlikely to ever have a damage value high enough to make legal action worthwhile.

What are statutory damages and how can I get them?

The issue of costs being more than the potential return in an infringement lawsuit is very common. Congress created the statutory damages provision of the Copyright Act to alleviate that issue. 

However, statutory damages are only available if you file a copyright registration for the work with the U.S. Copyright Office either:

• before the infringement ocurred, or
• the registration must have been filed within three months of publication (see here for information on what constitutes publication).

Copyright Registration is easy to do using the Copyright Office’s Registration Portal. It costs $45 to register a single work, such as a painting or drawing, or $55 for a group of up to 750 photographs from the same photographer in the same calendar year. (For more about Copyright Registration, see Planning for the Copyright Registration Process).

If the Copyright registration requirements are met, the copyright holder is entitled to:

• a minimum of $750 to a maximum of $30,000 per infringement.
• up to $150,000 per infringement if it is proven to be willful or intentional.
• reasonable legal fees for the winning party.

Let’s once again look at our earlier scenario with Jack and Jill.

Statutory damages would require that Jill pay at least $750 for her infringement. The copyright holder is not required to present proof of damages or profits; However, the court will consider it or other evidence in determining where along the $750-$30,000 range damages should fall.

Jill didn’t receive much profit from the infringement and you as the copyright holder did not lose very much money so it is likely the award would be on the lower end of the scale, like $1,500.

You can receive even more money if you can prove that the infringer knew they were violating your copyright.

In our scenario, it seems like Jack intentionally and knowingly stole your work. However, proving someone’s state of mind without physical evidence can be difficult, requiring mental experts, depositions of his friends and family, or analysis of his emails and computers.

While the damage award of the Jill lawsuit may not seem like enough to warrant the costs of the lawsuit and Jack’s Lawsuit might be very costly due to the witnesses and analysis required, Congress has fixed that problem too.

The Copyright Act also has a provision that allows the winner of the lawsuit’s legal fees to be paid for by the loser. The legal fees provision doesn’t just save you money but also makes the entire litigation process easier and simpler.

First, most attorneys will take the case on “contingency.” That means that you won’t have to pay any legal fees upfront. The attorney will take the fees at the end when the damage award is received.

Also, with the infringer knowing that for every hour that they defend themselves, they have to pay for your legal fees, they are more likely to settle the case early rather than dragging it out, getting you money in your pocket faster..

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The advantages of registering your work with the U.S. Copyright Office so you can receive statutory damages in an infringement case are clear. Copyright registration is like insurance. For a small fee, you can be sure that you can enforce your copyright. Copyright registration will make most infringement lawsuits financially feasible, where they may not have been before. And more importantly, most intellectual property attorneys will take an infringement case with statutory damages on contingency so you won’t have to pay legal fees in advance. All that needs to be done is to register your artistic works.

Do you register your works for copyright protection? Let us know in the comments below.