Business Law 13th Edition by Frank Cross, Kenneth Clarkson, Roger LeRoy Miller

تمرين 15

Maverick Recording Co. v. Harper United States Court of Appeals, Fifth Circuit, 598 F.3d 193 (2010).
COMPANY PROFILE?Recording star Madonna, others in the music business, and Time Warner created Maverick Records in 1992. Initially, the company saw great success with Alanis Morissette, The Prodigy, Candlebox, and the Deftones. It also created the sound track for the movie The Matrix. In a dispute over management of the company, Madonna and another co-owner were bought out. Today, Maverick is a wholly owned subsidiary of Warner Music Group.
BACKGROUND AND FACTS Maverick Recording Company and several other music-recording firms (the plaintiffs) hired MediaSentry to investigate the infringement of their copyrights over the Internet. During its investigation, MediaSentry discovered that Whitney Harper was using a file-sharing program to share digital audio files with other users of a peer-to-peer network. The shared audio files included a number of the plaintiffs' copyrighted works. The plaintiffs brought an action in a federal court against Harper for copyright infringement. They sought $750 per infringed work, the minimum amount of damages set forth in Section 504(c)(1) of the Copyright Act.
Harper asserted that her infringement was "innocent" and that therefore Section 504(c)(2) of the Copyright Act should apply. That section provides that when an infringer was not aware, and had no reason to believe, that his or her acts constituted copyright infringement, "the court in its discretion may reduce the award of statutory damages to a sum of not less than $200. " The trial court granted summary judgment for the plaintiffs on the issue of copyright infringement and enjoined Harper from further downloading and sharing of copyrighted works. The court, however, awarded the plaintiffs only $200 for each infringed work. Both parties appealed. Harper claimed that there was insufficient evidence of copyright infringement. The plaintiffs argued that the district court had erred by failing to rule out the innocent infringer defense as a matter of law.
IN THE LANGUAGE OF THE COURT
Edith BROWN CLEMENT, Circuit Judge:
* * * * The uncontroverted [undisputed] evidence is more than sufficient to compel a finding that Harper had downloaded the files: there was no evidence from which a fact-finder could draw a reasonable inference that Harper had not downloaded them or that they were something other than audio files. * * * The district court properly rejected Harper's argument that the evidence of infringement was insufficient.
* * * * * * * The district court held that there was a genuine issue of material fact as to whether Harper was an innocent infringer. * * * Harper averred [asserted] in an affidavit that she did not understand the nature of file-sharing programs and that she believed that listening to music from file-sharing networks was akin to listening to a noninfringing Internet radio station. The district court ruled that this assertion created a triable [capable of being tried before a judge or a jury] issue as to whether Harper's infringement was "innocent" under [Section 504(c)(2) of the Copyright Act].
* * * We hold that the defense was unavailable to her as a matter of law. The innocent infringer defense is limited by [Section 402(d) of the Copyright Act]: with one exception not relevant here, when a proper copyright notice "appears on the published * * * phonorecords to which a defendant * * * had access, then no weight shall be given to such a defendant's interposition of a defense based on innocent infringement in mitigation of actual or statutory damages." [Emphasis added.]
The district court acknowledged that Plaintiffs provided proper notice on each of the published phonorecords from which the audio files were taken. * * * Harper contended only that she was too young and naive to understand that the copyrights on published music applied to downloaded music.
These arguments are insufficient to defeat the interposition [interference] of the [Section 402(d)] limitation on the innocent infringer defense. Harper's reliance on her own understanding of copyright law-or lack thereof-is irrelevant in the context of [Section 402(d)]. The plain language of the statute shows that the infringer's knowledge or intent does not affect its application. Lack of legal sophistication cannot overcome a properly asserted [Section 402(d)] limitation to the innocent infringer defense. [Emphasis added.]
* * * * In short, the district court found a genuine issue of fact as to whether Harper intended to infringe Plaintiffs' copyrights, but that issue was not material: [Section 402(d)] forecloses, as a matter of law, Harper's innocent infringer defense. Because the defense does not apply, Plaintiffs are entitled to statutory damages. And because Plaintiffs requested the minimum statutory damages under [Section 504(c)(1)], Harper's culpability is not an issue and there are no issues left for trial. Plaintiffs must be awarded statutory damages of $750 per infringed work.
DECISION AND REMEDY The U.S. Court of Appeals for the Fifth Circuit affirmed the trial court's finding of copyright liability, reversed its finding that the innocent infringer defense presented an issue for trial, and remanded the case for further proceedings consistent with the court's opinion. The appellate court concluded that the district court had erred by awarding damages of $200 per infringement because Harper was not an innocent infringer.
THE ETHICAL DIMENSION?In this and other cases involving similar rulings, the courts have held that when the published phonorecordings from which audio files were taken contained copyright notices, the innocent infringer defense does not apply. It is irrelevant that the notice is not provided in the online file. Is this fair? Explain.
MANAGERIAL IMPLICAT IONS Owners and managers of firms in the business of recording and distributing music face a constant challenge in protecting their copyrights. This is particularly true for audio files in the online environment, where Internet users can easily download a copyrighted song and make it available to P2P file-sharing networks. Among other things, this means that recording companies must be ever vigilant in searching the Web to find infringing uses of any works distributed online. Today, it is not uncommon for companies to hire antipiracy firms to investigate the illegal downloading of their copyrighted materials.