Tenenbaum Case Finds Copyright Statutory Damages Unconstitutional

Hot off the press, here’s Judge Gertner’s ruling. Hat tip: Eric Goldman. This is a bombshell!

Update: Here are my rough first thoughts. This is a huge decision. If it’s upheld on appeal, it will not only change the contours of the Copyright Act, but might hold larger implications for the ability of Congress to set administrative schemes for damages. The decision is thoughtful, introspective, and well-argued. I also think it’s incorrect. Essentially, Gertner rules that the statutory damages provisions for the Copyright Act can’t apply where the harm is de minimis. It’s not clear, though, how her newly created damages maximum, of three times the minimum statutory penalty, isn’t subject to the same faults and attack that she launches at the jury’s original award. If the actual harm from the thirty songs that Tenenbaum was found to have infringed is in the range of $21, isn’t a damages award of $67,500 still unconstitutionally excessive? Why is the statutory minimum still a touchstone in her analysis? And I doubt that file-sharing is unique here. Congress clearly thought about low-level, minimum infringement in the pre-digital era, yet still put in place a scheme where the minimum statutory award against an innocent infringer is $200. If in fact the Copyright Act’s system violates the Due Process clause, I think Judge Gertner needs to face that question squarely, and not just assume that treble damages of the low end of the scheme is constitutionally acceptable…

Update #2: BMW v. Gore found that a damages award ratio of 500:1 (punitive to actual damages) was unconstitutional. But, if Gertner is correct, and the actual damage to Sony is about $21, then her award of $67,500 fails this test – it’s a ratio of 526:1. Testing her empirical assumptions on the damages limits seems quite important here, as her argument may prove too much for her own award. Hat tip: Thinh Nguyen.

One Response to “Tenenbaum Case Finds Copyright Statutory Damages Unconstitutional”

  1. “I also think it’s incorrect.”

    Can you expand on this a bit, Derek? I originally assumed that you meant ‘it is incorrect to cap the damages’, but reading further it seems perhaps you meant ‘the cap she reaches is still too high and should be even lower’, which would be a very radical result (even if I agree on moral grounds that BMW should apply both to corporate defendants and individuals.)