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Lime Wire Single Statutory Damages Award March 10, 2011

Lime Wire Single Statutory Damages Award March 10, 2011

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Published by Ray Dowd
Lime Wire decision of March 10, 2011 permitting a single statutory damages award per work against a secondary infringer who permitted multiple infringements.
Lime Wire decision of March 10, 2011 permitting a single statutory damages award per work against a secondary infringer who permitted multiple infringements.

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Published by: Ray Dowd on Apr 11, 2011
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UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK------------------------------------------------------------------xARISTA RECORDS LLC; ATLANTIC RECORDINGCORPORATION; ARISTA MUSIC, fka BMGMUSIC; CAPITOL RECORDS, INC; ELEKTRAENTERTAINMENT GROUP INC; INTERSCOPERECORDS; LAFACE RECORDS LLC; MOTOWNRECORD COMPANY, L.P.; PRIORITY RECORDSLLC; SONY MUSIC ENTERTAINMENT, fka SONYBMG MUSIC ENTERTAINMENT; UMG RECORDINGS,INC; VIRGIN RECORDS AMERICA, INC.; andWARNER BROS. RECORDS INC., 06 CV 5936 (KMW)OPINION AND ORDERPlaintiffs,-against-LIME GROUP LLC; LIME WIRE LLC; MARKGORTON; GREG BILDSON; and M.J.G. LIME WIREFAMILY LIMITED PARTNERSHIP,Defendants.------------------------------------------------------------------xKIMBA M. WOOD, U.S.D.J.:
I. Introduction
On May 11, 2010, this Court granted summary judgment in favor of Plaintiffs on theirclaims against Defendants LimeWire LLC (“LW”), Lime Group LLC (“Lime Group”), and Mark Gorton (collectively, “Defendants”) for secondary copyright infringement. The Court found thatDefendants had induced multiple users of the LimeWire online file-sharing program(“LimeWire”) to infringe Plaintiffs’ copyrights. In the Court’s Opinion and Order (as amendedon May 25, 2010), the Court detailed this case’s procedural and factual background, familiaritywith which is assumed. See Dkt. Entry No. 223. The litigation is now in the damage phase, witha trial on damages scheduled for May 2, 2011.
Case 1:06-cv-05936-KMW -DCF Document 622 Filed 03/10/11 Page 1 of 13
 
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Plaintiffs have identified approximately 11,000 sound recordings that they allege havebeen infringed through the LimeWire system. For the over 9,500 post-1972 sound recordings,Plaintiffs have elected to seek statutory damages under Section 504(c)(1) of the Copyright Act(hereinafter “Section 504”). See 17 U.S.C. § 504(c)(1) (providing that a “copyright owner mayelect” to seek “an award of statutory damages for all infringements involved in the action, withrespect to any one work, for which any one infringer is liable individually, or for which any twoor more infringers are liable jointly and severally”).Squarely before the Court is a threshold dispute regarding Plaintiffs’ entitlement tostatutory damage awards against Defendants: Where, as here, Defendants have been found liablefor inducing numerous individual LimeWire users to infringe Plaintiffs’ copyrights, mayPlaintiffs recover from Defendants a separate statutory award for each individual’s infringementof a work as to which Defendants are jointly and severally liable? Or, rather, are Plaintiffslimited to one statutory damage award per work from Defendants, regardless of the number of direct infringers of that work with whom Defendants are jointly and severally liable?Plaintiffs contend that they may recover from Defendants a separate statutory damageaward with respect to each individual infringer of the same work, because LimeWire is jointlyand severally liable with each individual direct infringer. (See Pl. Mem. at 7.) See also Pl.Reply Mem. at 2 (“[Section] 504(c)(1) authorizes separate statutory awards for eachinfringement for which Defendants are separately liable.”).Defendants, however, contend that Plaintiffs are entitled to a single statutory damageaward per work infringed, regardless of how many individual LimeWire users directly infringedthat particular work. Defendants assert that, “because the only alleged liability between Lime
Case 1:06-cv-05936-KMW -DCF Document 622 Filed 03/10/11 Page 2 of 13
 
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Wire and its users is joint and several, the statute mandates a single statutory award per work infringed.” (Def. Op. at 3-4.)
II. Analysis
To the best of this Court’s knowledge, the issue of whether a plaintiff should be able torecover from a secondarily liable defendant multiple awards per work based on the number of direct infringers of that work has never been addressed in a context where the secondarily liabledefendant has enabled hundreds, if not thousands, of individuals to infringe one work’scopyright, as occurred here, in the online peer-to-peer file sharing program run by LimeWire.Consequently, there is a considerable lack of guidance on this precise issue.However, for the reasons that follow, the Court finds that Plaintiffs are entitled to a singlestatutory damage award from Defendants per work infringed.A. Section 504(c) of the Copyright ActThe present dispute stems from the parties’ conflicting interpretations of the languagecontained in Section 504(c)(1) of the Copyright Act. In relevant part, Section 504 provides that acopyright owner may elect:an award of statutory damages for all infringements involved in the action, with respectto any one work, for which any one infringer is liable individually, or for which any twoor more infringers are liable jointly and severally, in a sum not less than $750 or morethan $30,000 as the Court considers just . . ..
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 17 U.S.C. § 504(c)(1) (emphasis added).Focusing on the language of Section 504, Defendants contend that, because Section504(c)(1) refers to “an award” (in the singular) where “any two or more infringers are jointly andseverally liable,” Plaintiffs cannot obtain more than “an award” for any given work, if there are
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Section 504(c)(2) provides that, where the infringement was committed willfully, “the court in itsdiscretion may increase the award of damages to a sum not more than $150,000.” 17 U.S.C. § 504(c)(2).
Case 1:06-cv-05936-KMW -DCF Document 622 Filed 03/10/11 Page 3 of 13

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