“Only one thing is impossible for God: To find any sense in any copyright law on the planet.” — Mark Twain
Twain, the author behind high school English class mainstays like “Huckleberry Finn” and “The Adventures of Tom Sawyer,” spoke from experience. He rose to fame during a time when copyright infringement was standard business practice for many unscrupulous publishers. These “literary pirates” capitalized on the publishing industry’s lack of regulation by simply transcribing Twain’s published writings into unauthorized editions. They then sold those editions without his permission, effectively guaranteeing he would never see a cent of his own profits.
If someone has copied or reproduced your original work without your permission, you likely understand Twain’s frustration. But the good news is, your copyrighted work has much stronger legal protection in 2021. In this article, you will learn about your legal options and available monetary relief if you fall victim to copyright infringement.
Table of Contents
- Talk to an Attorney
- Send a Cease-and-Desist Letter
- Filing a Lawsuit
- Elements of a Copyright Infringement Claim
- Procedural Requirements
- Substantial Similarity
- Remedies for Copyright Infringement
- Monetary Relief
- Next Steps
Talk to a Copyright Attorney
Contrary to Twain’s quote, the copyright infringement attorneys at Robinson & Henry can in fact make sense of copyright law. And if someone has copied your protected work, we will use every ounce of our legal knowledge and practical experience to stop the infringement and ensure you are financially made whole. Call (303) 688-0944 today to begin your free case assessment.
Your Legal Options if Your Copyright is Infringed
There are a number of legal remedies you can take if someone infringes your copyright. First, talk to an attorney who has a background in intellectual property law and copyright infringement cases. They’ll be able to identify the best course of action for your particular circumstances. Now, let’s dive into your legal options.
Send a Cease and Desist Letter
If you have evidence that someone else is using your original work without your permission, you’ll likely want to file a complaint with the U.S. Copyright Office. Before you do that, however, it’s wise to draft an attorney-reviewed cease-and-desist letter.
As the name implies, the cease-and-desist letter demands two actions from the alleged infringer:
- Cease: stop misusing your copyrighted work
- Desist: refrain from misusing your copyrighted work in the future
The cease-and-desist letter is not a requirement. However, it provides strong legal evidence that you made the person aware of their alleged infringing actions and that they ignored your request to stop.
What to Include in a Cease-and-Desist Letter
A typical cease-and-desist letter contains the following:
- Description – A detailed description of the alleged infringement. This should include information about the original work, evidence that you own a valid copyright for the original work, and any harm you have suffered due to the alleged infringement.
- Request to Cease and Desist – A formal request to stop using the copyrighted work and to not use it again once stopped.
- Consequences/Action – A detailed statement explaining the consequences if the alleged infringer disregards this cease-and desist letter.
- Timetable – Specify the amount of time the person will have to respond to your letter.
You’ll obviously want to include your name (or your attorney’s) and contact information, as well as the name, address, and information of the person receiving the letter. You may also want to include a request for payment for the unauthorized use of your copyrighted work.
File a Lawsuit
If your cease-and-desist letter does not stop the copyright infringement, you may have to resort to filing a lawsuit. Suing the copyright infringer can help clear up any consumer confusion that may happen when someone copies your work without permission. You can even obtain monetary damages stemming from lost profits.
Elements of a Copyright Infringement Claim
Infringement is the legal term for copyright violation. To prove copyright infringement, you generally must show:
- ownership of a valid copyright
- copying of original elements
- substantial similarity between the infringing work and the copyrighted work
You do not have to register your copyright with the U.S. Copyright Office for it to be valid. However, registration is a requirement to file a copyright infringement claim.
In the 2019 case Fourth Estate Public Benefit Corp v. Wall-Street.com LLC et al., Supreme Court justices unanimously decided that you must have a registration from the U.S. Copyright Office — or have been refused a registration — in order to sue for copyright infringement.
Justice Ruth Bader Ginsberg noted in her written opinion that once a registration has been issued for a copyright, a copyright owner can recover damages for infringement that occurred both before and after registration.
The court also ruled that the Copyright Act, which is the foundation for U.S. copyright law, allows for preregistration in certain circumstances. This simply means the copyright owner can file an infringement suit before a registration is issued.
When Preregistration is Permitted
Preregistration is allowed if a copyright owner is preparing to distribute a work that is vulnerable to pre-distribution infringement, such as a movie or musical composition.
If registration is required and you do not own a copyright, you and your attorney can file an application with a special handling request due to prospective litigation. The cost to do this is substantially more than an ordinary application for registration. However, if approved, the Copyright Office usually grants registration within one to two weeks.
Still, Ginsberg warned in her opinion that:
An infringement suit brought in reliance on preregistration risks dismissal unless the copyright owner applies for registration promptly after the preregistered work’s publication or infringement. Fourth Estate Pub. Ben. Corp. v. Wall-Street.com, LLC, 139 S. Ct. 881, 884 (2019)
Copying of Original Elements
The subject matter of your work must be copyrightable. A work only qualifies for copyright protection if it is:
- original, meaning it was independently created by you and has some minimal level of creativity
- fixed, meaning that you have preserved your work in any tangible medium of expression
If your work does not fulfill both requirements, you may not have a copyright infringement case. Additionally, some types of material are ineligible for copyright protection. Ideas, procedures, principles, discoveries, and devices are all specifically excluded from copyright protection. You can read more on that here.
“The most fundamental axiom of copyright law is that no author may copyright his ideas or the facts he narrates. And, when a work expresses an idea in the only way it can be expressed, courts deny those expressions protection under the ‘merger doctrine” to avoid giving the author a monopoly over the underlying idea. … Conversely, when an idea is capable of many different ‘modes of expression,’ the expression of the idea is eligible for copyright protection.”
Enter. Mgmt. Ltd. v. Warrick, 717 F.3d 1112, 1117 (10th Cir. 2013)
Aspen Company Sued for Copyright Infringment
Escobar, Inc. v. Barwest Grp., Ltd. Liab. Co.
In September 2020, Puerto Rican corporation Escobar, Inc. filed several claims against a Colorado company that runs several businesses in Aspen named for late Columbian drug kingpin Pablo Escobar.
The Barwest Group, which was sued, does business as the Escobar Aspen nightclub; Escobar Spirits, which sells Escobar Vodka; and Escobar Aspen.
The Puerto Rican corporation claimed it held intellectual property rights for the Escobar name along with $5 million in profits. It sought a cease-and-desist order for the Aspen businesses to stop using the Escobar name.
In a copyright infringement claim filed in the U.S. District Court of Denver, the plaintiffs alleged that artwork by Roberto Escobar, Pablo Escobar’s brother, was “displayed on all of (d)efendants’ ventures” without Escobar Inc.’s consent.
While Roberto’s artwork was not registered in the United States, Escobar Inc. attorneys argued they could still bring an infringement action against the Aspen businesses.
U.S. District Judge Phillip Brimer disagreed in his September 2021 ruling. Judge Brimer said Escobar Inc. “failed to plausibly allege facts that show ownership of the copyright, which is needed to bring a copyright infringement action.” Escobar, Inc. v. Barwest Grp., Ltd. Liab. Co. (D. Colo. Sep. 22, 2021)
Brimer dismissed the claim, ensuring Pablo Escobar’s likeness will live on in Aspen.
Before you file a copyright infringement claim, be sure you can tick the boxes on certain procedural requirements and considerations, including:
- subject matter jurisdiction
- personal jurisdiction
- the statute of limitations
Subject Matter Jurisdiction
Per the U.S. Copyright Act, federal courts have exclusive subject matter jurisdiction over all copyright claims. Therefore, you cannot sue another person for copyright infringement in Colorado state court.
When is a state law not preempted by the Copyright Act?
A state law claim is not preempted by the Copyright Act if it requires the plaintiff to prove an additional element that changes the nature of the action.
Personal jurisdiction means a court has the power to render a valid judgment against a particular person. All states have laws called “long-arm statutes” that spell out the circumstances under which a court in that state may assert jurisdiction over an out-of-state defendant.
Colorado’s long-arm statute, Colorado Revised Statute § 13-1-124, provides that a non-resident may be sued in Colorado when he or she engages in some contact with Colorado, including:
- the transaction of any business
- the commission of a tortious act
- the ownership, use, or possession of any real property
- contracting to insure any person, property, or risk residing or located within this state at the time of contracting
The Copyright Act does not apply to acts of infringement that take place outside of the U.S.
The legal or beneficial owner of any of the exclusive rights in a copyrighted work has standing to sue for infringement that occurs while it owns that right, per 17 U.S.C. § 501(b).
Non-exclusive vs. Exclusive Licenses
In copyright law, there are “non-exclusive” and “exclusive” licenses.
When your business gives someone a non-exclusive license, you give that person permission to exercise the right in question — but you also maintain the right to continue exercising it yourself, as well as authorize others to do so.
When your business gives someone an exclusive license, you are agreeing that the licensee and only the licensee may exercise the right. This means that when you grant an exclusive license, even you may not exercise the granted right — nor may you authorize anyone else to do so.
Effectively, those who hold exclusive rights to a copyright have standing to sue for copyright infringement. A person holding a non-exclusive license is not entitled to sue for alleged infringement of the copyright.
Statute of Limitations for Civil Copyright Claims
A civil copyright infringement claim must be filed within three years after the claim accrued. Here’s what that means: a copyright infringement claim accrues when someone discovers or reasonably should have discovered the alleged infringement. The statute of limitations begins to run when the infringement is discovered. You may hear a lawyer refer to this as the discovery rule.
Separate Accrual Rule
Importantly, the Copyright Act’s separate-accrual rule provides for a new three-year statute of limitations each time an infringement occurs. This means you can bring a lawsuit years after the initial infringement occurs, although you would only be entitled to damages for the latest three-year period.
Under this rule, even if you are time-barred from filing a claim based on an alleged infringement that happened more than three years earlier, you may still seek relief for successive infringing acts occurring during the three years before filing a lawsuit.
Even if you can definitively prove the alleged infringer copied your work, this does not mean the court will automatically rule in your favor. You also must prove that the other person’s work is substantially similar to yours.
Evaluating Substantial Similarity
The Tenth Circuit Court of Appeals evaluates substantial similarity using the abstraction – filtration – comparison test in all of its copyright infringement cases. Most other circuit courts reserve this test for cases involving computer programs.
“… copyright law seeks to achieve a proper balance between competition based on public ideas and incentive to produce original work. Hence, to the extent that the idea and the particular expression cannot be separated, the work cannot be protected by a copyright because protecting the ‘expression’ in such circumstances would confer a monopoly of the ‘idea’ upon the copyright owner. Indeed, ‘where the protected work and the accused work express the same idea, the similarity that inevitably stems solely from the commonality of the subject matter is not proof of unlawful copying.”
Medias & Co. v. Ty, Inc., 106 F. Supp. 2d 1132, 1137 (D. Colo. 2000)
At the abstraction step, courts separate the non-protectable elements from the particular expression of the work. Next, courts filter out the non-protectable components of the product from the original expression. Finally, they compare the remaining protected elements to the allegedly copied work to determine if the two works are substantially similar.
After filtering out the protectable elements, the court applies the ordinary observer test to determine if the protectable portions are substantially similar.
The test is simple in theory: if a casual onlooker would be unable to tell the difference between the two works, then it is unlikely that a court would be able to do so.
In Medias & Co. v. Ty, Inc., the Beanie Baby behemoth filed a claim in Colorado District Court accusing a Colorado corporation of copying one of its small stuffed animals: Quackers, a yellow duck with a bright orange bill and feet. After examining both companies’ products, District Judge Wiley Daniel determined that “an ordinary observer would regard their aesthetic appeal as the same” and ruled in favor of Ty. Medias & Co. v. Ty, Inc., 106 F. Supp. 2d 1132, 1138 (D. Colo. 2000)
Remedies for Copyright Infringement
Some remedies you can seek as the plaintiff in a copyright infringement claim include:
- Impoundment and destruction of infringing material
- Actual damages
- The infringer’s profits
- Statutory damages
- Costs and attorneys’ fees
The Copyright Act allows both temporary and permanent injunctive relief to prevent or restrain infringement. Injunctive relief is a viable option because monetary damages have historically been insufficient to compensate a copyright owner for harm caused by infringement. The exact dollar amount of sales and profits you lose due to the infringement is difficult to calculate. So is the hit your reputation could take.
A district court judge may grant a preliminary injunction if you can demonstrate the following:
- the substantial likelihood that you will prevail on the merits
- a showing that you will suffer irreparable injury unless the injunction issues
- proof that the threatened injury to you outweighs whatever damage the proposed injunction may cause the opposing; and
- a showing that the injunction, if issued, would not be adverse to the public interest.
Medias & Co. v. Ty, Inc., 106 F. Supp. 2d 1132, 1135 (D. Colo. 2000)
This brings us back to the Beanie Baby case. Colorado District Judge Wiley granted Ty, Inc.’s request for a preliminary injunction after finding that Medias’ plush stuffed ducks infringed on Ty’s copyright. Medias was thereby prohibited from “manufacturing, distributing, advertising, selling and/or offering to sell” its infringing products.
Impoundment and Destruction
Once a copyright infringement action has begun, the Copyright Act allows for the impoundment of all copies or phonorecords made or used in violation of the copyright owner’s exclusive right. Other infringing articles or materials used to make infringing articles can also be impounded, including:
- film negatives
Impoundment typically complements a preliminary injunction. The injunction prohibits further infringement while you wait for trial. Impoundment secures that prohibition by seizing the infringed products and instruments of infringement.
If you ultimately prevail in your copyright infringement lawsuit, the court may also order the infringing articles and the materials used to make them be destroyed
If the court rules in your favor, you may be entitled to monetary compensation. You must choose between recovery of either:
- actual damages and any additional profits of the infringer
- statutory damages
The court may also award attorneys’ fees and costs at its discretion.
Actual damages are generally based on the extent to which the market value of your work has been impaired. In other words, your lost profits. Actual damages can also be based on the fair market value of the license that could have been negotiated between you and the alleged infringer — if they had only asked.
Colorado photographer Richard Guarneros sued the Denver Green Party in 2019 after he discovered his copyrighted photograph of a Denver City Park sunset on the party’s website. The Green Party did not receive Guarneros’ permission to use his photograph, nor did it obtain a license to do so.
Additionally, the Party had removed information from the photograph that identified Guarneros as the author, adding its own logo instead. Guarneros v. Denver Green Party (D. Colo. Dec. 2, 2020)
In December 2020, a Colorado district judge ordered the Denver Green Party to pay Guarneros $10,000 in statutory damages.
Section 504 of the Copyright Act entitles the copyright owner to any profits attributable to the infringement. This means you can also recover indirect profits that the infringer earned from any of its operations that were enhanced by the infringement.
To establish the infringer’s profits, you must have proof that the infringer’s gross revenues are reasonably related to the infringement. The burden is then put on the infringer to prove deductible costs, such as its overhead and any elements of its profits stemming from factors other than your copyrighted work.
If it is difficult to prove actual damages, you can seek statutory damages as an alternative. However, you must have registered the copyright either before or within three months after the first publication.
Amount of Statutory Damages
You can receive anywhere from $750 to $30,000 per infringed work in statutory damages. If the infringement was willful, you could receive up to $150,000 per work infringed. To prove willful infringement, you must show that the other person knew their usage of your work constituted infringement or that they recklessly disregarded the possibility that it could.
If the court finds that the other person was not aware of this and had no reason to believe that their acts constituted infringement, the awards may be decreased to an amount not less than $200.
Damages for Multiple Infringements
Courts award statutory damages per copyrighted work — not per infringement. Therefore, if eight different copyrighted works are infringed by the same person, you will receive eight awards. If one copyrighted work is infringed multiple times by the same person, you will recover only one award.
The Copyright Act allows a prevailing copyright owner to receive separate monetary awards for both its damages and the defendant’s profits to the extent there is no overlap.
A court may not award punitive damages in a copyright infringement action. However, willful infringement is grounds for a court to award increased statutory damages.
Copyright Owner’s Damages
You may recover actual damages for any harm that you can prove you suffered as a result of this person copying your work. Courts typically measure damages by calculating the loss in the copyright’s fair market value. This is the same as the amount of money you would have received if the infringement had not occurred.
However, the loss in market value is notoriously difficult to calculate. Courts usually base these numbers on:
- your lost profits
- a reasonable license fee that the defendant avoided paying
In rare cases, courts grant damages based on alternative theories.
The Burden of Proving Damages
To recover monetary damages, you must show a connection between the infringement and the actual harm caused to you.
Although you do have to prove that damage occurred and the infringement caused the damage, you do not need to prove the amount of damages with certainty. Courts often prefer to resolve uncertainty about the amount of damages in the copyright owner’s favor.
Your Lost Profits
You also may recover damages in the amount of the profits you lost due to the infringement. However, this can be difficult to prove. Direct evidence, such as proof of a lost sale due to the infringement, is rare. You’ll likely have to rely on indirect evidence.
Recovery of lost profits hinges on your ability to convince the court that you would have made all of the infringer’s sales had they not copied your work. Therefore, the lost profits are what you would have earned on those sales.
For this argument to work, the parties must be competitive and have overlapping customer bases and similar price points. Otherwise, a court may reject this.
If you cannot meet this burden, you should request either:
- direct disgorgement of the infringer’s profits from the infringement.
- statutory damages
Disgorgement of Infringer’s Profits
Disgorgement is a legal remedy requiring a person who profits from illegal or wrongful acts to give up any profits he or she made as a result of his or her illegal or wrongful conduct.
As the copyright owner, you have the burden of proving the other person’s gross revenues. Once you have done that, he or she is responsible for lowering that number by showing any deductible expenses.
Because the Copyright Act prohibits double recoveries, you generally cannot use a lost profits award to both calculate your loss and disgorge the defendant’s profits. Therefore, depending on the facts and evidence, it may be easier for you to seek the available disgorgement remedy.
However, if your profit margins are greater than the infringer’s profit margins, you may seek your own profit margin on the infringer’s sales, resulting in a recovery exceeding the infringer’s profits.
Lost Licensing Fees
A license fee sometimes may be the only available remedy for copyright infringement cases. You cannot recover statutory damages if the other person has not profited from copying your work. In these cases, courts usually are willing to grant a license fee instead of denying any compensation to the copyright owner.
Fair Market Value of License Fee
When awarding a license fee, courts award the fair market value of the license fees the infringer avoided. Courts typically determine this value based on what a reasonable license fee would be under the circumstances, considering the nature of the work and the infringing use.
Even if you would not have granted a license to the opposing party, for example, if they are your direct competitor, this is generally not a basis for avoiding a reasonable license fee damage award.
Prior Comparable Licensing
In Guarneros v. Denver Green Party, Guarneros was able to demonstrate to the court that he normally charged a $1,600 licensing fee for a similar photo. Therefore, the judge awarded him that amount in actual damages.
Future License Fees
When an infringement is ongoing, and if injunctive relief was not awarded, a court may impose a running royalty on future sales.
Lost Licensing Opportunities
Courts have awarded license fee damages for proven lost licensing opportunities. For example, in Cream Records, Inc. v. Jos. Schlitz Brewing Co., the defendant declined a license offer to use the popular copyrighted song “Theme From Shaft” in its beer commercial but used portions of the song anyway.
Shortly after declining the license, a third party approached the plaintiff to license the song, but the third party withdrew when the infringer’s commercial aired. The court concluded that the defendant’s unauthorized use destroyed the song’s license value, and the plaintiff was entitled to damages amounting to 15 percent of the value of a one-year license based on the portion of the song used.
Alternative Damage Theories
Damage recoveries are not limited to your lost profits and license fees. Although other damage theories are less common and depend on your ability to prove them, courts have approved damages in the amount of:
- the market value of a franchise fee where a competitor built a truck stop based on a franchisor’s copyrighted architectural plans
- an examination preparer’s cost of replacing test questions on an infringed examination, and of determining the scope of the infringement and its effect on future examinations.
Costs and Attorneys’ Fees
Costs and attorney’s fees are granted at the courts’ discretion.
Reasonable attorneys’ fees may be awarded only to the prevailing party. In order to recover them, you must have registered your copyright before or within three months of the work’s first publication.
Owning the copyright to your work grants you exclusive rights to recreate the work, publish it, perform it, and distribute it. If someone else engages in any of these acts without your permission, you may have a valid copyright infringement claim. Robinson & Henry PC’s copyright infringement attorneys will evaluate and explain the choices available to you and take the appropriate action to ensure that your rights and interests are protected. Call 303-688-0944 today to begin your free case assessment.