Copyright, Statutory Damages And Unicorn Party Dresses

Back in September 2024, I reviewed a case before the Copyright Claims Board (CCB) that pitted artist Wendy Sloan against the online retailer Just for Littles LLC (JFL).

The allegations in the case were relatively straightforward. Sloan filed the claim in September 2023, alleging that JFL sold party dresses featuring a unicorn pattern that she licensed for other clothing companies to use.

Tami Enz, the owner of JFL, pointed the finger at the Tuance E-Commerce Firm. According to Enz, she purchased the dresses from them and said they provided the license to use the pattern. However, it was clear that Tuance never had a license for the pattern and sold Enz infringing copies that she resold.

As such, Sloan was seeking $4,131 in damages. This represents the amount she estimated to be JFL’s profits plus her missed licensing fee.

At the time of my original reporting, the case was in limbo. Though JFL had submitted a response to the claim, it had failed to provide any other documents, including evidence that the board requested.

Earlier this week, the CCB handed down its final determination. Though the determination is a default in all-but-name, it is an interesting case study of how the CCB determines damages.

What Happened Since September

When I reported on the case in September, it was already heading toward a default determination. Though JFL had filed its claim response in March of that year, it did not file anything after that.

Sloan, for her part, submitted more evidence and an additional statement. However, JFL’s lack of participation meant nothing really moved on the case until the final determination.

To that end, the CCB opted not to list this as a default determination. Instead, the board accepted the response as testimony and other documents and ruled on the case with that information.

That final determination almost completely sides with Sloan. It was found that JFL infringed on her copyright, and it found that JFL infringed on her rights and was liable for that infringement.

However, as with many CCB cases, the interesting part was the determination of damages.

Sloan had asked for $4,131 in damages. This was her estimate of the net revenue for the sale of the dresses ($3,475) plus her estimated license fee ($656).

To that end, the CCB largely agreed with her estimations. They did a minor recalculation of the profits, bumping it down to $3,197, but largely agreed with her numbers.

However, the CCB did reject Sloan’s request for her license fee. The board argued that doing so would be double-dipping on the estimated profits, setting the actual damages to $3,197.

But, since Sloan had asked for statutory damages, the board sought to multiply that amount. However, it quickly ran into a problem.

The board has historically given 3x actual damages, which in this case would have equaled $9,591. However, even a 2x multiplier would have been higher than the $4,131 Sloan had requested.

As such, the board capped the damages to the $4,131 Sloan initially requested, awarding her that.

Why Crazy Damages Aren’t Always Crazy

Copyright cases often generate headlines for eye-watering high-damage requests. For example, in February 2023, it was revealed that Getty Images sought up to $1.8 trillion in damages from the AI company Stable Diffusion.

To be clear, no one, least of all Getty Images, believes they will be awarded those damages. This number simply comes from multiplying the number of alleged infringed works, 12 million, times the maximum damages per work, $150,000.

Even if the court rules that all 12 million works should be awarded statutory damages (which is unlikely), those damages can range from $750 to $150,000 per work. Courts usually award toward the lower end of the spectrum.

To be clear, maximum damages are sometimes awarded. For example, in December 2023, a jury awarded photographer Scott Hargis $6.3 million in a case that involved 42 works. This was mainly due to the defendant’s behavior through the dispute.

Regardless, neither the courts nor the CCB will give you more than you request. So, if you request X amount of damages, that will probably be the upper limit of what you can receive.

As such, many litigants ask for the maximum and trust that the judge and/or jury will reduce them later. They don’t want to set an artificial cap.

High damages are also a motivator for a settlement. One will be more inclined to settle if they are facing $150,000 in damages instead of $750.

In short, it’s important to understand that asking for maximum damages is a legal tactic in and of itself. While it doesn’t make the damage requests less eye-watering, it’s essential to understand why litigants make them.

That said, this likely doesn’t impact Sloan’s case. While she could have won a higher damages amount, maximizing damages wasn’t likely her goal.

Bottom Line

If Sloan had requested the maximum statutory damages, $15,000 in this case, she likely would have more than doubled her award.

But does that matter in this case? Like many CCB cases, receiving the judgment may be more difficult than winning it. Though CCB determinations are enforceable in court, much of the point of the CCB is to avoid going through the court system.

It doesn’t matter what the damages are on paper if Sloan never receives them.

Ultimately, I think Sloan did an excellent job as a claimant. Though asking for lower damages was a tactical error, the damage from that is likely hypothetical.

She did an excellent job stating her case, calculating her actual damages and arguing that JFL was liable. Sloan is clearly very savvy about these issues and made reasonable arguments that the board almost wholly agreed with.

She is so savvy that I was surprised she represented herself.

Still, the case is a reminder of why plaintiffs in copyright cases often ask for maximum damages, even in cases that clearly don’t warrant it. Sometimes, you may be able to win more than you are asking for, so it doesn’t make sense to limit yourself.