Unlike infringement of a patent, infringement of a copyright may, if carried out willfully [94] and for purposes of commercial advantage or private financial gain, be prosecuted as a crime as well as a civil wrong. [95] The maximum penalty depends on the exact nature of the defendants acts but in the most egregious cases can be a fine of $250,000 and /or imprisonment for five years. [96]

More normally, however, enforcement is by a civil action by the copyright owner. In this case the plaintiff’s remedies may include an injunction, impoundment and destruction of infringing goods and damages either in the form of actual damages suffered plus any additional profit made by the infringer or, if the necessary conditions on registration have been met, statutory damages. [97] Normally, statutory damages may lie in the range $500 to $20,000 per infringement.

The Statute of Limitations for copyright actions is three years. [98]

The general rule in civil litigation in the United States is that each party is fully responsible for its own costs in any litigation. Thus, a party who feels aggrieved may bring a lawsuit against another without fear that if the suit is lost he or she will have to recompense the other party for the costs that it incurred in defending the suit.

Section 505 of the Copyright Act varies this general rule and provides that a court may in some cases award reasonable attorneys’ fees to the prevailing party as part of the costs in any copyright infringement action. [99] In Fogerty v. Fantasy, Inc., the U.S. Supreme Court recently held that attorneys’ fees awarded in copyright infringement actions must be made on the same basis to both prevailing plaintiffs and prevailing defendants. In so holding, the Court reversed a Ninth Circuit decision and rejected its “dual standard”, under which prevailing defendants needed to show that the lawsuit was brought frivolously or in bad faith in order to recover attorneys’ fees. Prior to the Court’s decision, the various circuit courts of appeal were divided in their approach in awarding attorneys’ fees under the Copyright Act. The Second, Seventh and District of Columbia Circuits, for example, also followed this dual standard, whereas the Third, Fourth and Eleventh Circuits adopted an “evenhanded” approach, wherein no distinction is made between prevailing plaintiffs and defendants.

In the Fogerty case, Fantasy, Inc. brought a lawsuit against singer/songwriter John Fogerty, claiming that a song written by Fogerty in 1985 was copied from a song that Fogerty had written in 1970, but the copyright of which was owned by Fantasy. After successfully defending against this copyright infringement claim, Fogerty moved for attorneys’ fees under the Copyright Act. The district court denied the motion because Fantasy did not bring the suit frivolously or in bad faith. The Ninth Circuit affirmed.

Fantasy presented several arguments to the Court in support of the Ninth Circuit’s dual standard, each of which was rejected by the Court.

Fantasy argued that the statutory language of Section 505 supported this dual standard. In support of its position, Fantasy pointed to the Civil Rights Act of 1964, which has identical language with respect to attorneys’ fees awards, but under which different standards for awarding attorneys’ fees to prevailing plaintiffs and prevailing defendants have been routinely upheld. The Court rejected this argument, differentiating between the objectives of the Copyright and Civil Rights Acts. Civil rights plaintiffs, for example, often cannot afford to bring lawsuits against defendants with greater resources. Accordingly, Congress sought to provide incentives for these plaintiffs by treating them more favorably than defendants. Unlike the Civil Rights Act, where Congress sought to provide incentives to plaintiffs to bring meritorious lawsuits, the objective of the Copyright Act is to encourage the production of “original literary, artistic and musical expression for the good of the public” and, contrary to civil rights cases, both plaintiffs and defendants in copyright infringement actions range from “corporate behemoths to starving artists.”

Fantasy had also argued that the policies and objectives of the Copyright Act support the dual standard because it encourages plaintiffs to bring meritorious copyright infringement claims. The Court rejected this argument, reasoning that the objective of the Copyright Act is to stimulate artistic creativity for the public good and not simply to maximize the number of meritorious copyright infringement actions. A successful defense of copyright infringement may advance the policies of the Copyright Act as much as the successful prosecution of a copyright claim.

Although the Court did not set forth any precise formula for making a determination of when to award attorneys’ fees, the Court noted that factors such as “frivolous, motivation, objective unreasonableness (both in the factual and in the legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence” may be considered so long as they are applied equitably to both plaintiffs and defendants.

Unlike the patent statute, there is no statutory provision for an action for contributory infringement of a copyright by providing an actual infringer with the necessary equipment or materials to make a copy of a copyright work. However, the courts have recognized the existence of such a right. In order to succeed, the Supreme Court in Sony Corporation of America v. Universal City Studios [100] held it is necessary to demonstrate that there are no “substantial non-infringing uses” of the materials or equipment in question. [101] Furthermore it is necessary that the party charged with contributory infringement “know or have reason to know” of the direct infringement to which it contributes. [102]

The issue of contributory infringement lies at the core of the dispute between the music recording industry and Napster Inc. [103] Napster provided a service through which users could download music recordings, through the Internet, that were resident on computers of any other person who was logged on to Napster’s site at the time. This was done by software on the Napster site that searched out computers on which the requested piece of music was present. The recording industry regarded this as being harmful to it as being likely to reduce the legitimate sales of its recordings. The industry argued that by providing this service, Napster was contributing to the actual infringement of the copyright in a musical work that occurred when that work was downloaded. In response to a motion for a preliminary injunction, the district court judge rejected Napster’s claims that there were substantial non-infringing uses and also analogies to taping of films broadcast in television which has been held by the Supreme Court to be permissible as a fair use in the Sony case, at least when done to enable the viewer to watch the film at a more convenient time. [104] The Ninth Circuit Court of Appeals immediately stayed the injunction and ordered an early oral hearing of Napster’s appeal against the injunction on the ground that the appellant had raised “substantial questions of first impression going both to the merits and the form of the injunction.” [105] Subsequently, however, the appellate Court substantially upheld Judge Patel’s ruling, modifying it only to require that the record companies defined more precisely the works in which they asserted ownership. [106]