Beldar asks:
Am I correct in assuming that even if Jibjab violated the rights of the owners of the original song copyright, they still would have to prove damages — presumably, lost sales, licensing revenues, etc. — to prevail? Wouldn’t that require a witness who could come in and say, “I was on the brink of paying $___ for licensing rights to this song, until I saw that jingle on the internet?” And isn’t that rather unlikely?
Since I like to stay on the good side of people with ominous sounding names like Beldar (I’ll bet he’s got a whole fleet of Viking raiders behind him), here’s a quick answer to the first question: “No.”
OK, maybe that’s too quick. The less quick answer: Copyright owners who have registered their copyright (which I suspect the This Land Is Your Land people have) can get at least four kinds of remedies:
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Actual damages plus profits. If that’s what the owners ask for, they’ll probably get little on the damages, for the reasons Beldar mentions, though they would probably get at least the customary license fee for this sort of use (which may be hard to determine, but I’m sure lots of expert witnesses would be happy to estimate it), on the theory that this is what they would have gotten if the defendant had acted legally (though query whether this is available if the copyright owners’ theory is that they would never have licensed such a use). But if JibJab made a profit on the work, the owners could get a fraction of the profit (the fraction to be determined by the judge or jury, based on how significant the original work is as a part of the new work).
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Statutory damages. But because actual damages are often so speculative (and profits so small), the Copyright Act lets plaintiffs elect to instead get statutory damages — $750 to $30,000 per work infringed, with the amount to be set by the judge or jury based on a grab bag of factors. If the defendants can show that they acted innocently (which probably means that they reasonably thought their actions were legal, even if the court concludes otherwise), the range gets lowered to $200 to $30,000. If the plaintiffs can show that the defendants acted willfully (which probably means that they knew their actions were illegal or at least likely illegal, as opposed to merely being negligent about that), the range gets raised to $750 to $150,000. What number within the range will be selected? No-one knows, though judges and juries are supposed to consider various factors, including their best guess about the harm to the plaintiff, and their sense of how willful or innocent (see below) defendant’s conduct was. The customary license fee for this sort of use will likely play a role in this calculation.
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Injunction. The plaintiffs can also get a preliminary injunction and ultimately a permanent injunction, which won’t require them to show damages (though to defeat a fair use defense, it would help them to show that such a use, if it became widespread, would cause them and others like them harm). In some cases, the threat of an injunction is a huge bargaining chip, which can often yield a settlement far in excess of damages — if a movie studio is enjoined from distributing a movie, it may well pay a lot to get the case settled. But there has been some talk by courts that injunctions should be issued less often when the new work really transforms the original; if a court adopts that view, it can find infringement, award damages, but decline to issue an injunction.
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Court costs and attorney fees. A prevailing plaintiff or defendant may (in the judge’s discretion) get his court costs and attorney fees reimbursed by the other side. But this is pretty much entirely up to the judge, just as the statutory damages amount is pretty much up to the judge or jury (depending on whether the parties elect a bench trial or a jury trial).
So the bottom line is that copyright plaintiffs can get some pretty substantial remedies even if they can’t prove any damages — though it does help to be able to make a good case about damages, either if they ask for actual damages or if they ask for statutory damages and want the judge or jury to award the damages at the high end.
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