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Raising the Stakes in Copyright Litigation: The Availability of Punitive Damages
The threat of enhanced damages, particularly in the hands of a jury, can have a considerable effect influencing the strategic conduct of litigation. Assuming some merit to a claim ' at least sufficient to withstand summary judgment ' the possibility of a verdict doubled or trebled or otherwise multiplied to deter or punish perceived willful, malicious conduct, perhaps representing many times the plaintiff's actual damages or the defendants' profits, can indeed be something of a gun to the head. To some plaintiffs seeking to vindicate a perceived wrong, the prospect of punitive damages can, of course also be something akin to the brass ring, adding extra incentive spurring pursuit of a verdict to the very end, even in a case that might otherwise settle.
To many practitioners, it is likely assumed that the sole monetary remedies under the Copyright Act are those specified in Section 504 of the statute, namely the copyright owner's provable losses and/or the infringer's profits, or, alternatively, statutory damages (which, by statutory formula, include possible stepped-up awards in cases of willful infringement). It was thus with some significance and perhaps surprise that on Aug. 30, 2004, in a slender decision of only seven paragraphs, Blanch v. Koons, 329 F. Supp.2d 568 (S.D.N.Y. 2004), a federal judge in New York (Louis Stanton) rendered a decision granting a motion to amend the complaint in a copyright case to allow the plaintiff to seek punitive damages (not simply enhanced statutory damages). As Judge Stanton's decision makes clear, his ruling is largely unprecedented.
Judge Stanton explained the basis for permitting the amendment: “where the contemplated award is actual damages plus profits, such a recovery is compensatory only and does not address the interests of deterrence and punishment that are reflected in the principles underlying both punitive damages and statutory damages for willful infringement. Therefore in this context, to say that the public policy rationale for punitive damages can be properly accounted for is not correct.” 329 F. Supp.2d at 569 (quoting TVT Records v. The Island Def Jam Music Group, 262 F.Supp.2d 185, 186 (S.D.N.Y. May 5, 2003)). Indeed, in Blanch, enhanced statutory damages were not available because the infringement commenced before the plaintiff's work was registered.
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