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A court accepts triple-fee damages in copyright case

Although photographers license their images for cash, they like a little credit, too. So it has long been the norm for license contracts to include a clause that requires the publisher to print a credit line and assesses a penalty if credit isn’t given. By custom, the penalty is often a tripling of the license fee. This has given rise to the popular notion that such a “multiplier” is a matter of law.

In fact, there is nothing about multipliers in the copyright law. The courts will allow the use of multipliers as part of a negotiated contract, but will often refuse to enforce them. In the absence of specific contract language, the courts have always declined to use multipliers when calculating damage awards.

Until now. In Barrera, Burgos v. Brooklyn Music Ltd, the U.S. District Court for the Southern District of New York has explicitly used a multiplier to set the amount of damages in a copyright-infringement case.

The case. In August, 1977, Javier Barrera and Lynn Burgos made a photograph of an old green silo in Vermont. Their primary business was selling prints through art galleries, not licensing stock. But to their surprise, late in 1998, they saw their photo on a CD cover. The image was also being used on the Brooklyn Music Ltd (BML) web site to promote the CD. Another firm, K-Tel, was also marketing the CD in cooperation with BML.

Not only were these uses of the image never authorized, but the credit line was wrong. It said only, “Photography by Javier,” and did not credit Burgos at all.

The photographers sent cease-and-desist letters to the defendants. At the same time, they registered their copyright. K-Tel soon settled its part of the case. But BML ignored the photographers, so they filed a lawsuit in December 2000. BML also ignored the Magistrate Judge who was appointed to examine the case. As a result, BML automatically lost the case on the issue of liability. However, the court still had to determine what damages to award.

Actual damages. Because the photographers hadn’t registered their copyright until after the infringement occurred, they were not eligible for statutory damages. Instead, they had to prove that they had suffered actual financial losses and what how much those losses were. To do that, they asked a stock-photo consultant to give expert testimony.

The expert testified that a reasonable license fee for a photo used to promote that particular CD was $9,000. He also testified that it was customary in the music industry to triple the license fee if credit was not properly given.

He further stated that it was normal practice to also charge a multiplier for unauthorized use. He said that most stock agencies would accept three to four times the license fee if the matter was settled immediately, but they would often demand up to ten times the license fee if the agency had to file a suit. For this case, he said, a five-fold multiplier was appropriate.

The ruling. The court accepted the expert’s opinion about the size of a normal license fee and the custom of tripling it for an improper credit line. That clearly represented the money that Barrera and Burgos would have earned if the photo had been properly licensed and the value of a credit line.

But it refused to follow his advice on a five-fold multiplier for the unauthorized use. The court felt that, because the higher multiple was invoked as a deterrent to litigation, it was not really part of the plaintiffs’ actual damages.

In theory, Barrera and Burgos were also entitled to claim the profit that BML had made from its illicit use of the image. But the court found that the evidence they submitted did not establish the amount of profit, so they got nothing on that score.

What it means. Courts typically do not like the use of multipliers in calculating damages. In Barrera, in contrast, the multiplier was used to price out an improper credit line, rather than to penalize the copyright infringement. Nevertheless, the copyright infringement aspect of the case is important: BML never signed a contract agreeing to a triple fee; it just used the image. In doing so, it exposed itself to a claim of damages, and the court has now found that a multiplier is a reasonable way of determining the damages — at least in the context of omitting the credit line on the packaging of a music CD.

It’s hard to say where this will go and whether any other court will follow this decision. In the meantime, there is a precedent (albeit a very weak one) for asking for a multiplier in a damage suit involving omitted credit lines.

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