Innocent Infringement based on industry standards for website developers

By James Juo.

Instead of actual damages and profits, a copyright owner may elect to recover statutory damages, which a court may award in the range between $750 and $30,000. 17 U.S.C. § 504(c)(1). For willful infringement, statutory damages may be increased up to $150,000. The court has broad discretion to assess damages within the statutory limits. Sometimes, a court will set statutory damages at double the standard licensing fee based on the need to deter future copyright infringement.  See Harrington v. Aerogelic Ballooning, LLC, 2019 WL 5095683 (D. Colo. 2019) (“doubling a work’s licensing value is a common way of deterring future copyright infringements” for statutory damages); see also Girlsongs v. 609 Industries, Inc., 625 F.Supp.2d 1127 (D. Colo. 2008).

The Court also may, in its discretion, reduce statutory damages to a minimum of $200 if “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.” 17 U.S.C. § 504(c)(2).

The Southern District of Indiana in Hebenstreit v. Merchants Bank of Indiana, No. 18-cv-00056, recently held that the defendant in that case was “an innocent infringer” and reduced the statutory damages to the minimum of $200.

The defendant had created a blog post to recruit potential employees which used a photograph from a Media Library provided by its website developer. Unfortunately, the website developer apparently did not obtain a license to use that photograph, and the plaintiff accused defendant of copyright infringement. The plaintiff send an email demanding that the defendant immediately take down the photo and pay him $5,000. After the defendant removed the photo, the plaintiff filed suit seeking damages of $150,000. The website developer later separately settled with a $2,000 payment to the plaintiff.

The district court found that “it is industry standard for website developers … to have a license or otherwise have permission to use images that they present to a client for use on a website” and that the defendant had relied on its website developer to have permission to use the photos that it uploaded to the website for the defendant’s use. The Court concluded that the defendant did not know or have reason to know that the asserted photograph was copyright protected, so the plaintiff was only entitled to recover the minimum statutory damages of $200 for innocent infringement.

Because when a plaintiff settles with one of several joint tortfeasors, the nonsettling defendants are entitled to a credit for that settlement, see McDermott, Inc. v. AmClyde, 511 U.S. 202, 208 (1994), the defendant was entitled to a credit of $2,000 because of the separate settlement with the website developer; so the plaintiff was not entitled to recover any additional
damages from the defendant here.

The copyright attorneys at Thomas P. Howard, LLC are experienced in litigating copyright infringement.