§ 504. — Remedies for infringement: Damages and profits.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 17USC504]
TITLE 17--COPYRIGHTS
CHAPTER 5--COPYRIGHT INFRINGEMENT AND REMEDIES
Sec. 504. Remedies for infringement: Damages and profits
(a) In General.--Except as otherwise provided by this title, an
infringer of copyright is liable for either--
(1) the copyright owner's actual damages and any additional
profits of the infringer, as provided by subsection (b); or
(2) statutory damages, as provided by subsection (c).
(b) Actual Damages and Profits.--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.
(c) Statutory Damages.--
(1) Except as provided by clause (2) of this subsection, the
copyright owner may elect, at any time before final judgment is
rendered, to recover, instead of actual damages and profits, an
award of statutory damages for all infringements involved in the
action, with respect to any one work, for which any one infringer is
liable individually, or for which any two or more infringers are
liable jointly and severally, in a sum of not less than $750 or more
than $30,000 as the court considers just. For the purposes of this
subsection, all the parts of a compilation or derivative work
constitute one work.
(2) 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. In a case
where the infringer sustains the burden of proving, and the court
finds, that such infringer was not aware and had no reason to
believe that his or her acts constituted an infringement of
copyright, the court in its discretion may reduce the award of
statutory damages to a sum of not less than $200. The court shall
remit statutory damages in any case where an infringer believed and
had reasonable grounds for believing that his or her use of the
copyrighted work was a fair use under section 107, if the infringer
was: (i) an employee or agent of a nonprofit educational
institution, library, or archives acting within the scope of his or
her employment who, or such institution, library, or archives
itself, which infringed by reproducing the work in copies or
phonorecords; or (ii) a public broadcasting entity which or a person
who, as a regular part of the nonprofit activities of a public
broadcasting entity (as defined in subsection (g) of section 118)
infringed by performing a published nondramatic literary work or by
reproducing a transmission program embodying a performance of such a
work.
(d) Additional Damages in Certain Cases.--In any case in which the
court finds that a defendant proprietor of an establishment who claims
as a defense that its activities were exempt under section 110(5) did
not have reasonable grounds to believe that its use of a copyrighted
work was exempt under such section, the plaintiff shall be entitled to,
in addition to any award of damages under this section, an additional
award of two times the amount of the license fee that the proprietor of
the establishment concerned should have paid the plaintiff for such use
during the preceding period of up to 3 years.
(Pub. L. 94-553, title I, Sec. 101, Oct. 19, 1976, 90 Stat. 2585; Pub.
L. 100-568, Sec. 10(b), Oct. 31, 1988, 102 Stat. 2860; Pub. L. 105-80,
Sec. 12(a)(13), Nov. 13, 1997, 111 Stat. 1535; Pub. L. 105-298, title
II, Sec. 204, Oct. 27, 1998, 112 Stat. 2833; Pub. L. 106-160, Sec. 2,
Dec. 9, 1999, 113 Stat. 1774.)
Historical and Revision Notes
house report no. 94-1476
In General. A cornerstone of the remedies sections and of the bill
as a whole is section 504, the provision dealing with recovery of actual
damages, profits, and statutory damages. The two basic aims of this
section are reciprocal and correlative: (1) to give the courts specific
unambiguous directions concerning monetary awards, thus avoiding the
confusion and uncertainty that have marked the present law on the
subject, and, at the same time, (2) to provide the courts with
reasonable latitude to adjust recovery to the circumstances of the case,
thus avoiding some of the artificial or overly technical awards
resulting from the language of the existing statute.
Subsection (a) lays the groundwork for the more detailed provisions
of the section by establishing the liability of a copyright infringer
for either ``the copyright owner's actual damages and any additional
profits of the infringer,'' or statutory damages. Recovery of actual
damages and profits under section 504(b) or of statutory damages under
section 504(c) is alternative and for the copyright owner to elect; as
under the present law, the plaintiff in an infringement suit is not
obliged to submit proof of damages and profits and may choose to rely on
the provision for minimum statutory damages. However, there is nothing
in section 504 to prevent a court from taking account of evidence
concerning actual damages and profits in making an award of statutory
damages within the range set out in subsection (c).
Actual Damages and Profits. In allowing the plaintiff to recover
``the actual damages suffered by him or her as a result of the
infringement,'' plus any of the infringer's profits ``that are
attributable to the infringement and are not taken into account in
computing the actual damages,'' section 504(b) recognizes the different
purposes served by awards of damages and profits. Damages are awarded to
compensate the copyright owner for losses from the infringement, and
profits are awarded to prevent the infringer from unfairly benefiting
from a wrongful act. Where the defendant's profits are nothing more than
a measure of the damages suffered by the copyright owner, it would be
inappropriate to award damages and profits cumulatively, since in effect
they amount to the same thing. However, in cases where the copyright
owner has suffered damages not reflected in the infringer's profits, or
where there have been profits attributable to the copyrighted work but
not used as a measure of damages, subsection (b) authorizes the award of
both.
The language of the subsection makes clear that only those profits
``attributable to the infringement'' are recoverable; where some of the
defendant's profits result from the infringement and other profits are
caused by different factors, it will be necessary for the court to make
an apportionment. However, the burden of proof is on the defendant in
these cases; in establishing profits the plaintiff need prove only ``the
infringer's gross revenue,'' and the defendant must prove not only ``his
or her deductible expenses'' but also ``the element of profit
attributable to factors other than the copyrighted work.''
Statutory Damages. Subsection (c) of section 504 makes clear that
the plaintiff's election to recover statutory damages may take place at
any time during the trial before the court has rendered its final
judgment. The remainder of clause (1) of the subsection represents a
statement of the general rates applicable to awards of statutory
damages. Its principal provisions may be summarized as follows:
1. As a general rule, where the plaintiff elects to recover
statutory damages, the court is obliged to award between $250 and
$10,000. It can exercise discretion in awarding an amount within
that range but, unless one of the exceptions provided by clause (2)
is applicable, it cannot make an award of less than $250 or of more
than $10,000 if the copyright owner has chosen recovery under
section 504(c).
2. Although, as explained below, an award of minimum statutory
damages may be multiplied if separate works and separately liable
infringers are involved in the suit, a single award in the $250 to
$10,000 range is to be made ``for all infringements involved in the
action.'' A single infringer of a single work is liable for a single
amount between $250 and $10,000, no matter how many acts of
infringement are involved in the action and regardless of whether
the acts were separate, isolated, or occurred in a related series.
3. Where the suit involves infringement of more than one
separate and independent work, minimum statutory damages for each
work must be awarded. For example, if one defendant has infringed
three copyrighted works, the copyright owner is entitled to
statutory damages of at least $750 and may be awarded up to $30,000.
Subsection (c)(1) makes clear, however, that, although they are
regarded as independent works for other purposes, ``all the parts of
a compilation or derivative work constitute one work'' for this
purpose. Moreover, although the minimum and maximum amounts are to
be multiplied where multiple ``works'' are involved in the suit, the
same is not true with respect to multiple copyrights, multiple
owners, multiple exclusive rights, or multiple registrations. This
point is especially important since, under a scheme of divisible
copyright, it is possible to have the rights of a number of owners
of separate ``copyrights'' in a single ``work'' infringed by one act
of a defendant.
4. Where the infringements of one work were committed by a
single infringer acting individually, a single award of statutory
damages would be made. Similarly, where the work was infringed by
two or more joint tortfeasors, the bill would make them jointly and
severally liable for an amount in the $250 to $10,000 range.
However, where separate infringements for which two or more
defendants are not jointly liable are joined in the same action,
separate awards of statutory damages would be appropriate.
Clause (2) of section 504(c) provides for exceptional cases in which
the maximum award of statutory damages could be raised from $10,000 to
$50,000, and in which the minimum recovery could be reduced from $250 to
$100. The basic principle underlying this provision is that the courts
should be given discretion to increase statutory damages in cases of
willful infringement and to lower the minimum where the infringer is
innocent. The language of the clause makes clear that in these
situations the burden of proving willfulness rests on the copyright
owner and that of proving innocence rests on the infringer, and that the
court must make a finding of either willfulness or innocence in order to
award the exceptional amounts.
The ``innocent infringer'' provision of section 504(c)(2) has been
the subject of extensive discussion. The exception, which would allow
reduction of minimum statutory damages to $100 where the infringer ``was
not aware and had no reason to believe that his or her acts constituted
an infringement of copyright,'' is sufficient to protect against
unwarranted liability in cases of occasional or isolated innocent
infringement, and it offers adequate insulation to users, such as
broadcasters and newspaper publishers, who are particularly vulnerable
to this type of infringement suit. On the other hand, by establishing a
realistic floor for liability, the provision preserves its intended
deterrent effect; and it would not allow an infringer to escape simply
because the plaintiff failed to disprove the defendant's claim of
innocence.
In addition to the general ``innocent infringer'' provision clause
(2) deals with the special situation of teachers, librarians,
archivists, and public broadcasters, and the nonprofit institutions of
which they are a part. Section 504(c)(2) provides that, where such a
person or institution infringed copyrighted material in the honest
belief that what they were doing constituted fair use, the court is
precluded from awarding any statutory damages. It is intended that, in
cases involving this provision, the burden of proof with respect to the
defendant's good faith should rest on the plaintiff.
Amendments
1999--Subsec. (c)(1). Pub. L. 106-160, Sec. 2(1), substituted
``$750'' for ``$500'' and ``$30,000'' for ``$20,000''.
Subsec. (c)(2). Pub. L. 106-160, Sec. 2(2), substituted ``$150,000''
for ``$100,000''.
1998--Subsec. (d). Pub. L. 105-298 added subsec. (d).
1997--Subsec. (c)(2). Pub. L. 105-80 substituted ``the court in its
discretion'' for ``the court it its discretion''.
1988--Subsec. (c)(1). Pub. L. 100-568, Sec. 10(b)(1), substituted
``$500'' for ``$250'' and ``$20,000'' for ``$10,000''.
Subsec. (c)(2). Pub. L. 100-568, Sec. 10(b)(2), substituted
``$100,000'' for ``$50,000'' and ``$200'' for ``$100''.
Effective Date of 1999 Amendment
Pub. L. 106-160, Sec. 4, Dec. 9, 1999, 113 Stat. 1774, provided
that: ``The amendments made by section 2 [amending this section] shall
apply to any action brought on or after the date of the enactment of
this Act [Dec. 9, 1999], regardless of the date on which the alleged
activity that is the basis of the action occurred.''
Effective Date of 1998 Amendment
Amendment by Pub. L. 105-298 effective 90 days after Oct. 27, 1998,
see section 207 of Pub. L. 105-298, set out as a note under section 101
of this title.
Effective Date of 1988 Amendment
Amendment by Pub. L. 100-568 effective Mar. 1, 1989, with any cause
of action arising under this title before such date being governed by
provisions in effect when cause of action arose, see section 13 of Pub.
L. 100-568, set out as a note under section 101 of this title.
Section Referred to in Other Sections
This section is referred to in sections 109, 111, 115, 119, 122,
401, 402, 405, 411, 412, 510, 511, 1101 of this title; title 28 section
1498.
