The opinion of the court was delivered by: VICTOR Marrero, United States District Judge.
On May 1, 2003, the Court read into the trial record of this matter a statement explaining the basis for its ruling with regard to a proposed instruction to the jury concerning the availability of punitive damages in copyright infringement cases. The Court considered and rejected, for the reasons set forth in the Court's remarks, Defendants' request for an instruction stating categorically that punitive damages are not available at all in copyright infringement actions.
Accordingly, it is hereby
ORDERED that the Court's statement made on the trial record of this matter on May 1, 2003, a copy of which is attached and incorporated hereto, be filed in the docket of this case.
TVT Records, Inc. v. The Island Def Jam Music Group
Statement of the Court Regarding Jury Instruction Concerning
Punitive Damages for Copyright Infringement
May 1, 2003
The Court has spent considerable time reviewing the matter of the availability of punitive damages for copyright infringement under the Copyright Act of 1976. The Court notes that many cases have articulated the general proposition that punitive damages are not available in "statutory copyright actions." Those cases that elaborate on the theory behind this principle explain, as does one of the pair of cases most recently cited by defendants to the Court — Kamakazi Music Corp. v. Robbins Music Corp., 534 F. Supp. 69, 78 (S.D.N.Y. 1982) — that "[w]here an award of statutory damages is awarded . . . punitive or exemplary damages are inappropriate. . . . The public policy rationale for punitive damages of punishing and preventing malicious conduct can be properly accounted for in the provisions for increasing a maximum statutory damage award . . . [for] infringement found to be willful."
The more difficult question, however, arises when a copyright infringement action under the Copyright Act is not limited to statutory damages, as is the case here regarding defendants' use of "Get Tha Fortune," or when a copyright infringement action under the Copyright Act does not authorize statutory damages at all, as is the case regarding defendants' use of "The Rain." 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.
The Court has considered the case law that Defendants cited in support of their arguments against awarding punitive damages in this case under any circumstances. But the facts of most of those decisions are meaningfully distinguishable from the facts of the litigation at hand. The case most directly on point is Leutwyler v. Royal Hashemite Court of Jordan, 184 F. Supp.2d 303, 308 (S.D.N.Y. 2001). There, Judge Lynch specifically addressed the availability of punitive damages where actual damages plus profits are elected, indicating that even in such cases, the Copyright Act does not contemplate punitive damages. The Leutwyler court relies on Oboler v. Goldin, 714 F.2d 211, 213 (2d Cir. 1983), in which the Second Circuit implicitly precluded punitive damages where actual damages plus profits are elected. Judge Lynch, while recognizing that the germane language in Oboler may have been dicta, still found the Circuit Court's statement sufficiently persuasive to warrant its application to the facts of Leutwyler. See 184 F. Supp.2d at 308.
Nonetheless, Judge Lynch, in a more recent opinion — Silberman v. Innovation Luggage, Inc., No. 01 Civ. 7109, 2003 WL 1787123, at *10 (S.D.N.Y. April 3, 2003) — seems to acknowledge the possibility of punitive damages for copyright infringement under the Copyright Act where malice is present. The court stated that
[a]s a general matter punitive damages are not
awarded in a statutory copyright infringement action
because the purpose of punitive damages — to punish
and prevent malicious conduct — is generally
achieved by statutory damages available under the
Copyright Act. . . . While no statutory damages are
available here, there is still no reason to deviate
from this principle in a case where, as here, no
malice or ill will towards the plaintiffs has been
Id. (emphasis added).
Similarly, the Second Circuit seems to have softened its interpretation of punitive damages under the Copyright Act since its decision in Oboler 21 years ago. In On Davis v. The Gap, Inc., 246 F.3d 152, 172 (2d Cir. 2001), the Circuit Court, like Judge Lynch in Silberman, indicated that punitive damages were unavailable in the statutory copyright context "[a]s a general rule . [because] [t]he purpose of punitive damages — to punish and prevent malicious conduct — is generally achieved under the Copyright Act through the provisions of 17 U.S.C. § 504(c)(2), which allow increases to an award of statutory damages in cases of willful ...