Addressing § 504(c)(1) of the US Copyright Act, which permits an award of statutory damages in lieu of actual damages for copyright infringement, the US Court of Appeals for the Seventh Circuit considered a question of first impression to determine what constitutes “one work” for purposes of calculating statutory damages where a jury finds infringement on multiple works registered in a single copyright application. Amy Lee Sullivan, dba Design King v. Flora Inc., Case Nos. 17-2241, 18-2534, (7th Cir., Aug. 21, 2019) (Scudder, J).
Graphic design artist Amy Sullivan sued herbal supplement company Flora for copyright infringement when she discovered that a series of 33 illustrations that she had produced for Flora for use in two specific video advertising campaigns were being used to promote other product lines outside of the originally agreed-upon campaigns. Sullivan petitioned for statutory damages, citing 33 instances of infringement for each of the 33 illustrations. Flora argued that Sullivan’s designs comprised a single work as a compilation and asserted that she could claim only two statutory awards for use of the compilations in two additional advertising campaigns. The district court agreed with Sullivan and instructed the jury that Sullivan could receive separate statutory awards for 33 acts of infringement on 33 individual illustrations. With those instructions, the jury arrived at statutory damages award of $3.6 million. Flora appealed.
The Seventh Circuit sided with Flora, vacating the judgment and remanding the case for further proceedings. The Court opined that the district court committed error in its grant of statutory damages absent any finding that each of the 33 illustrations constituted “one work” eligible for separate statutory damages, as opposed to a single compilation being “one work” under §504(c)(1).
Because Sullivan registered her 33 illustrations as compilations via only two US copyright applications, Flora contended that Sullivan’s illustrations fell into one of two compilations. Thus, under the language of the Copyright Act, the grant of a statutory damages award for “any one work” being “all parts of a compilation or derivative work,” precluded Sullivan from receiving more than two separate awards of statutory damages for each of the registered compilations infringed.
The Seventh Circuit explained that resolving the parties’ disagreement as to the number of works at issue “very much mattered,” since the Copyright Act authorizes a statutory damages award ranging from $750 to $30,000 for each work infringed (and up to $150,000 per work in an instance of willful infringement). Therefore, under Sullivan’s position, the “one work” damages multiplier would be 33 instead of two, as under Flora’s interpretation of the statute.
To answer the “one work” question of first impression and whether Sullivan’s 33 illustrations constituted 33 individual works or instead were part of two compilations, the Seventh Circuit looked to the US Court of Appeals for the Second Circuit’s decision in Bryant v. Media Right Prods., Inc. (and complementary decisions from the First, Ninth, 11th and DC Circuits), in which the court placed dispositive weight on whether the protected copyrighted works have value only in and through their composite whole as a single-work “compilation,” or instead have individual standalone value as “one work” each with “distinct and discernible value to the copyright holder.” Since the available case record did not allow the Court to resolve the factual inquiry into the primary and discernible value of Sullivan’s 33 illustrations as separate works or two broader compilations, the Court vacated the jury’s statutory damages award and remanded to allow the district court to reframe the proceedings to enable the “one work” determination pertinent to statutory damages.