U.S.C.A. 6th Circuit, Oct 17, 2007

Click here for a copy of the full decision.

In a case having significant implications on damages in copyright infringement cases, the Sixth Circuit recently ruled that an award of punitive damages of almost ten times the compensatory damages award was unconstitutionally excessive for the willful infringement of a common-law copyright in a sound recording. Relying on the Supreme Court’s seminal cases on punitive damages, State Farm Mutual Auto. Ins. Co. v. Campbell, 538 U.S. 408 (2003), and BMW of N. Am., Inc. v. Gore, 517 U.S. 559 (1996), the Sixth Circuit overturned an award of $3.5 million in punitive damages and instructed the district court that an appropriate punitive damages award would be in the range of 1:1 to 2:1 in relation to the compensatory damages award of $366,939.

The case before the Sixth Circuit involved the defendants’ use of an unlicensed sample of the Ohio Players’ song “Singing in the Morning” in the Notorious B.I.G. song “Ready to Die.” Plaintiff Bridgeport owned the copyright in the musical composition to “Singing in the Morning,” and plaintiff Westport owned the common law copyright in the sound recording. Bridgeport elected to receive the maximum $150,000 in statutory damages allowed for its infringement claim under the Copyright Act, while the jury awarded Westport $366,939 in compensatory damages and $3.5 million in punitive damages under New York common law. The jury found the defendants’ conduct to be willful, in light of their disregard of pre-litigation warning letters sent by the plaintiffs and the defendants’ re-release of the album with knowledge that it would be infringing.

Reviewing the punitive damages award to Westport de novo, the court found the defendants’ conduct to be “somewhat reprehensible” based on the jury’s conclusion that the defendants had acted “willfully.” The court explained, however, that where only willfulness has been proven, and other factors evidencing the reprehensibility of the defendants’ conduct are lacking, “a ratio in the range of 1:1 to 2:1 is all that due process will allow.” The court thus found the punitive damages award to be excessive in relation to Westport’s compensatory damages award, and also found it to be out of proportion to the statutory damages scheme under the Copyright Act. Based on these conclusions, the court held the punitive damages award to be unconstitutionally excessive, in violation of defendants’ due process rights.