Photographer John Marshall Mantel took a picture of an artist named Joe Reginella standing next to a sculpture he had created. Mantel licensed the photo to the New York Post, which ran the photo next to an article about Reginella. Mantel was given a "gutter" credit (i.e., his name was credited below the body of his photograph).
Defendant Smash.com, Inc. then ran an article featuring the same photograph without Mantel's permission or crediting Mantel. A lawsuit followed in the Western District of New York, with Richard Liebowitz and his law firm representing Mantel. In the lawsuit, Mantel claimed damages for copyright infringement and also alleged that the defendant had violating 17 U.S.C. 1202(b) by intentionally removing copyright management information (i.e., a credit listing Mantel as the creator of the photograph).
Defendant failed to appear or defend the lawsuit and Mantel moved for a default judgment. The Court agreed that judgment should be entered against Smash.com and then went on to consider Mantel's claim for statutory damages and attorneys' fees. This is when it got a bit more interesting.
Mantel asked for $30,000 as statutory damages on the copyright infringement claim ; $10,000 as statutory damages on the 1202(b) claim; $2975 in attorneys' fees and $440 in costs. The total demand, therefore, was $43,410.
The Court, in a decision available here, found that defendant's infringement was willful and its default bolstered the allegations of willfulness. Nonetheless, it concluded that a statutory damage award of $2500 on the copyright infringement claim was appropriate. In so holding, the Court noted that Mantel had not presented any evidence of lost revenue or other damages caused by the infringement. The Court noted that "statutory damages need not be directly correlated to actual damages, but they ought to bear 'some relation to actual damages.'"
With respect to the 1202(b) claim, the Court stated that the statute permits a statutory damage award of $2,500 to $25,000 per infringement. It found that other courts had awarded $5,000 in similar situations where there was evidence of willfulness but no evidence of actual damages and concluded that the $5,000 amount was appropriate in this case.
The Court then turned to the question of attorneys' fees and costs. Liebowitz has asked for $2,975, based on a claim to have spent 7 hours at an hourly rate of $425. But the Court found that Liebowitz, a relative newcomer to the bar and a prolific filer of copyright claims, had experience "more consistent with that of an associate than a partner." It held that a more reasonable rate for Liebowitz would be $180 per hour and that three hours better represented the reasonable number of hours that he had worked on the case Accordingly, the Court awarded $540 in attorneys' fees to go along with the total of $7,500 in statutory damages on the two substantive claims and $440 in costs (representing the filing fee for the action). The total award, therefore, was $8,480 about 20% of the amount that had been requested.
All of this brings us to the question whether there may be instances where a defendant is better off defaulting than responding to the complaint and litigating this type of copyright claim. In the case described in this post, the defendant avoided the need to pay its own counsel. It also avoided the expense and risk of a jury trial. As a general rule, awards of statutory damages in cases of defaults have been relatively modest, at least in instances not involving blatant counterfeiting. Most judges in these situations have calculated statutory damages as somewhere between two and five times the reasonable license value of the use.
There is, of course, some risk to a strategy of deliberate default. A Judge might decide to punish a defaulting defendant by awarding significantly higher statutory damages and/or fees. And even following a default judgment, the federal rules require the court to preserve the plaintiff's right to a jury trial in certain situations, including when there are factual issues to be determined. But given the expense and risks of litigating these cases toward a possible jury trial, the default strategy may be worth considering.
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