Last month, the Copyright Office held a closed-door session on the issue of statutory damages. A small affair, the roundtable was a response to the PRO-IP Act introduced in Congress late last year. In the wake of the meeting, eight public interest and industry groups have published a white paper (PDF) arguing against any changes to the "one work" rule and the increases in statutory damages that would result from such changes.

The PRO-IP Act would drastically alter US copyright law by increasing the amount of statutory damages that could be awarded to rightsholders. For instance, someone copying a 50 songs from a boxed set could be liable for $7.5 million in damages instead of the current $150,000. There's more: there would be a new office created within the executive branch that would be responsible for IP enforcement, while the Department of Justice would get a new IP enforcement division.

The white paper, submitted by the Consumer Electronics Association, Public Knowledge, the Center for Democracy and Technology, the Association of Public Television Stations, the Library Copyright Alliance, the Computer & Communications Industry, NetCoalition, and the Printing Industries of America, argues against the kind of changes to the copyright law envisioned in the PRO-IP Act.

Noting that the courts can currently award massive statutory damages without rightsholders having to demonstrate that they have suffered any actual harm (ask Jammie Thomas about that), the white paper calls current copyright law a "carefully designed compromise" meant to balance the interests of both parties. After all, if a rights-holder believes that it has suffered damages in excess of the statutory limits, it has the option to seek punitive damages as well.

From the standpoint of Big Content, the problem is that it can be difficult to prove actual damages; lifting the ceiling on statutory damages is much easier. During the Jammie Thomas trial, one recording industry executive testified that she had no idea what the RIAA's actual damages were. "We haven't stopped to calculate the amount of damages we've suffered due to downloading," testified Sony BMG's head of litigation Jennifer Pariser.

That's not enough, argues the white paper. Supporters of the PRO-IP Act are "not able to produce any examples where that rule has created unfair outcomes for rightsholders," according to the groups. "In fact, at the January 25 meeting Associate Register Carson asked the proponents of Section 104 if they could cite a single example where the one work rule produced an unjust result. The proponents were unable to do so."

The authors of the white paper paint a dreary future where "copyright trolls" file lawsuits in order to rake in massive amounts of statutory damages, where innovation is stifled, and where artists are afraid to "Recut, Reframe, and Recycle" because of the financial risks involved.

The PRO-IP Act would also strengthen the hand of rightsholders when it comes to secondary infringement, a development the white paper contends should be avoided at all costs. Noting that courts have seldom—if ever—ruled on the question of the applicability of statutory damages in the case of secondary infringement (a federal judge rejected the RIAA's argument that Debbie Foster was liable for secondary infringement in Capitol v. Foster), the authors argue that any changes to the Copyright Act must limit liability for secondary infringement. Otherwise, companies would be less willing to create innovative new products for fear of running afoul of this issue.

The increase in statutory damages might be justified, allow the white paper's authors, if there was evidence that it would help in the fight against piracy. They argue that such evidence is lacking. "At the January 25, 2008, meeting, supporters of the amendment provided no evidence that weakening the one work rule would deter infringement by end users or commercial 'pirates.'"

There's a lot more in the white paper, including a fascinating (well, fascinating to me, anyway) look at the history of development of the statutory damages clause in the Copyright Act. But the key takeaway is this: current law already provides for adequate damages for rightsholders, and the proposals backed by Big Content in the current legislation would have far-reaching negative consequences if the bill is passed in its current form.

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