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83 Tex L. Rev. 525 (2004-2005)
Grossly Excessive Penalties in the Battle against Illegal File-Sharing: The Troubling Effects of Aggregating Minimum Statutory Damages for Copyright Infringement

handle is hein.journals/tlr83 and id is 543 raw text is: Notes Grossly Excessive Penalties in the Battle Against Illegal File-Sharing: The Troubling Effects of Aggregating Minimum Statutory Damages for Copyright Infringement* I. Introduction Imagine that you are a file-sharer. You download copyrighted songs to your computer for your personal use. You think of it like recording songs from the radio. Now imagine that a plaintiff sues you for downloading the one song to which she holds a registered copyright. Suppose the plaintiff knows that her monetary loss caused by your conduct is exactly one dollar.' At trial, this plaintiff can elect to recover statutory damages for copyright infringement and thereby receive a guaranteed $750 in damages,2 all but one dollar of which would be noncompensatory in nature. The noncompensatory damages, those which exceed the loss that you caused, serve as a punishment,3 and there are several valid reasons for their imposition: they admonish you for your misconduct, they deter future infringement by increasing its cost, and they add an incentive for the copyright owner to sue. Now suppose that you have been a file-sharer for the past few years, accumulating some four thousand songs on your computer, all copyrighted and registered by the plaintiff. When the minimum statutory damage award of $750 is aggregated across every copyright that you have infringed, you are * I am grateful to Professors Oren Bracha, Karen Engle, Douglas Laycock, R. Anthony Reese, Eugene Volokh (and his website, lawtopic.org), and Ernie Young for their insightful comments and helpful suggestions. I also owe thanks to the Texas Law Review editors for their fine editorial contributions. My deepest gratitude lies with my wife Emily, who was the first to lay eyes on this piece, for her extraordinary forbearance and support. 1. This figure is used for illustrative purposes only; it is likely that the direct harm to copyright owners from the sharing of a copyrighted music file is more than just one dollar. On the other hand, a recent study by professors at the Harvard Business School and the University of North Carolina concludes that file-sharing has no statistically significant effect on purchases of the average music album and that it increases the sales of hot albums by one CD sale for every 150 downloads. Felix Oberholzer & Koleman Strumpf, The Effect of File-Sharing on Record Sales: An Empirical Analysis 23-24 (Mar. 2004), at http://www.unc.edu/-cigar/papers/FileSharingMarch2004.pdf. 2. 17 U.S.C. § 504(c)(1) (2000) (providing for a $750 minimum statutory damage award per copyrighted work infringed); see id. § 412 (forbidding the award of copyright infringement statutory damages for unpublished works that were unregistered at the time of infringement and for then- published works that were not registered within three months of their first publication). This conclusion assumes that your infringement did not qualify as innocent, a possibility further discussed below. See infra notes 54-60 and accompanying text. 3. See Cass County Music Co. v. C.H.L.R., Inc., 88 F.3d 635, 643 (8th Cir. 1996) (noting that copyright's statutory damages comprise remuneration for injury but also serve as a penalty).

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