Rogan Introduces Bill to Increase Damages for Copyright Infringement

(May 13, 1999) Rep. James Rogan introduced the Copyright Damages Improvement Act on May 11, 1999. The bill would increase the statutory damages available for copyright infringement, and serve as an increased deterrent against copyright violation.

HR 1761 IH, titled the Copyright Damages Improvement Act of 1999, is sponsored by Rep. James Rogan (R-CA) (web site | bio) and cosponsored by Rep. Howard Coble (R-NC), the Chairman of the House Courts and Intellectual Property Subcommittee.

The House Courts and Intellectual Property Subcommittee, of which Rep. Rogan is also a member, held a hearing on Wednesday afternoon, May 12, on HR 1761. (The hearing also addressed the failure by the Department of Justice to enforce the No Electronic Theft Act.)

Rep. Rogan explained at the hearing that the purpose of his bill is to "serve as a strong deterrent for those who wish to skirt the law." It raises penalties generally. It also contains a clause that will have the effect of greatly increasing the penalties for web site operators who distribute pirated software or music.

Rep. Rogan

"The Internet and online commerce have opened a whole new world to consumers and to businesses," said Rep. Rogan. "But at the same time, it has created a new venue for those who deliberately break the law and violate copyright protections. The Copyright Damages Improvement Act will increase the range of statutory damages which violators can be held liable for. These penalties have not been increased in over ten years."

Rep. Rogan added that "it is crucial that this country remains the leader in protection and enforcement of intellectual property rights. It is our obligation to continue to support the value and integrity of intellectual property and to set an example for other countries to follow."

HR 1761 amends Title 17, Section 504, the federal statute setting remedies for copyright infringement. Under section 504 an infringer is liable for either actual damages and lost profits of the copyright holder, or specified statutory damages. HR 1761 increases these statutory damages. If the copyright holder elects to receive statutory damages, then under the current statute the court awards at least $500, but not more than $20,000, for one infringement.

Under the Rogan bill, this range would be increased to $700 to $30,000. Second, in cases where the copyright infringement is "committed willfully", the current maximum statutory damages is $100,000. HR 1761 would increase this to $150,000. These two changes could be described as adjustments for inflation.

Third, HR 1761 contains a change that would aid copyright holders in actions against copyright infringers who use web sites to distribute pirated property. The new clause reads:

"In a case where the copyright owner demonstrates that the infringement was part of a repeated pattern or practice of infringement, the court may increase the award of statutory damages to a sum of not more than $250,000 per work."

Finally, the Rogan bill would amend the bankruptcy code to provide that damage awards for willful infringement are not dischargable in bankruptcy. The clause reads:

`For purposes of chapter 5 of title 11, `willful' infringement shall be considered to be willful and malicious injury to the property of another.'.

Batur Oktay, an attorney for Adobe Systems, testified, testified at the hearing on behalf of the Business Software Alliance. He testified that:

"BSA would like to commend Representative Rogan for his efforts to update the Copyright Act in the enforcement area. Representative Rogan's bill recognizes the critical need to ensure that the Copyright Act is an effective enforcement tool. To be that, it must be kept up-to-date. The changes to the Copyright Act proposed by Representative Rogan would (1) update the current level of statutory damages in the Copyright Act; (2) provide an effective deterrent for persons who engage in a pattern or practice of infringement; and (3) clarify that for bankruptcy purposes a judgment for willful copyright infringement may not be discharged."

Tim Starback or Emigre, Inc., testified on behalf of the Software and Information Industry Association. "SIIA strongly supports the amendments proposed in the Copyright Damages Improvement Act of 1999."

"SIIA believes it is appropriate and necessary to amend the Copyright Act to increase the levels of statutory damages, and to create a new tier of damages applicable to repeat offenders," said Starback. "Such amendments are necessary for several reasons, most notably to account for inflation and other changes in business practices and technology that have taken place over the past decade."

Rep. Rogan represents the California 27th District, which includes Glendale and Burbank. The district is home to many entertainment and information businesses. Much of the assets of these companies is in the form of intellectual property.

None of the witnesses or members of the subcommittee spoke in opposition to the bill.

The only members of the subcommittee who participated were Representatives Coble, Rogan, Bob Goodlatte (R-VA), and Edward Pease (R-IN). Ranking Minority Member Howard Berman (D-CA) was present at the very beginning, but left. The hearing coincided with the debate and voting in the House chamber on HR 775, a major piece of legislation to reform Y2K problem litigation procedure and liability.