Copyright Claims Board Awards It’s Highest Damages Ever
Today, the Copyright Claims Board (CCB) issued its highest and second-highest damage awards in back-to-back final determinations.
The two claims, which have very similar facts, pit a video content creator against two separate real estate companies who allegedly uploaded their content to YouTube. In both cases, the respondent did not participate, leading to a default judgment, with the CCB finding for the claimant.
In the first case, the CCB awarded $10,200 in damages, the first and only five-figure damage award from the CCB. It awarded $8,400, the second-highest amount, in the second case.
The CCB used the same logic in both cases to determine whether infringement occurred and what damages should be awarded. But while these damage awards are high, they are nowhere near the maximum of $30,000 the CCB can award.
In fact, even though they are both much higher than most CCB decisions, there’s a strong argument that they should have been even higher.
Two Fights Over Real Estate Videos
Both cases involved the same claimant: Say It Visually, Inc. (SIV)
SIV is a video production company that creates videos for other businesses to include on their websites and social media accounts. The videos are customized with the customer’s branding and licensed on a monthly, quarterly or yearly basis.
However, SIV does not offer the video files and streams them from its own platform on behalf of customers.
According to SIV, two real estate companies, America’s Real Estate Force Corporation (AREF) and America’s Real Estate Brokers, Inc (AREB), somehow obtained the video files and uploaded them to YouTube without a license.
According to SIV, they only recently learned about the infringement though it had been ongoing for some time. AREB had been using the videos for 56 months and AREF for 66 months. SIV filed both cases with the CCB, seeking “appropriate statutory damages.”
Neither respondent answered the claim. Eventually, the CCB opted to file a default determination in both cases. Though the CCB weighed potential defendants that the respondent might have, it ruled in favor of SIV in both cases.
In both cases, the CCB examined what an actual license would have cost the respondent. They determined that such a license would have cost $708 per year. They then reduced that license slightly since even the “starter” plan included videos that were not featured on either company’s account.
Following that, they calculated the total license cost for the time the videos have been online and then tripled it, as they have done in other cases. In the case against the AERF, this came to $10,200. For AREB, it comes to $8,400.
But while these are the two highest damage awards the CCB has ever handed out, there’s a strong argument that the award should have been even higher.
Why It Should Have Been More
Though the damage awards are very high for the CCB, the board worked hard to get the figures as low as they did.
First, the board discounted the licenses by roughly 20%. According to the CCB, the reason was that the plan offered content that wasn’t used by the respondents. This included additional videos, blog posts and other content that wasn’t infringed.
However, it’s highly unlikely that every customer uses all the work they license. From the perspective of SIV, the license fee is the same if a customer uses five videos or thirty. It’s literally the least expensive license they offer, and the CCB discounted it further.
But then there is another problem: The license itself isn’t particularly relevant.
SIV doesn’t offer licenses that allow users to download and re-upload its content. SIV requires users to stream the videos from their platform. As such, the respondents’ behavior is well outside the boundaries of any available license.
The board did not consider that in its final decision. When determining damages, the board simply looked at the license fee, less the discount that they had previously decided on, and tripled it.
While I agree that the license fee is a reasonable place to start the damages discussion, the board doesn’t distinguish between infringers who simply didn’t have a license and those who engaged in behavior for which there is no possible license.
Though the CCB discusses deterrence as “an important consideration” in this case, its approach to damages is unlikely to deter much future infringement.
Bottom Line
The CCB is walking a delicate tightrope in cases like this one. This is inherently a commercial infringement. Between the high license costs and the length of time the infringement took place, damages would always be high.
The CCB doesn’t want to become a haven for copyright trolls” or other questionable actors. They are under pressure to keep damages reasonable and connected to the actual harm. This is one of the reasons why the board has adopted its “triple the license fee” strategy with damages.
However, it also needs to encourage participation, ideally by both sides. Both of these claims were default judgments, indicating potential respondents are not taking the CCB seriously.
Even with the added expense and time, this case would likely have fared better in a federal court. The cases took roughly one and one and a half years to resolve, respectively, and damages would have likely been much higher in a federal court. Even a settlement would have likely been under better terms.
This is the exact type of case the CCB was supposed to be built for. However, it was likely the wrong choice for SIV.
In balancing between being useless and being abused, the CCB has leaned hard toward the former. However, that may harm it in the long run as it makes it only useful for a very narrow set of cases.
Ultimately, the CCB could have flexed some of its might but chose to minimize its impact. While that will placate fears that the CCB would become a haven for abuse, it won’t do much to encourage claimants or respondents to take it seriously as an alternative.
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