July 23, 2014 | By Mitch Stoltz

As Congress Tackles Copyright Remedies, EFF Publishes New Whitepaper on the Broken Penalty System

Today, the House Judiciary Committee is holding a hearing on "remedies" in copyright law—that is, the penalties, injunctions, and other means of challenging and penalizing alleged infringement. This is hugely important: fixing copyright’s remedy provisions (like excessive, unpredictable monetary penalties and government seizures of domain names) is key to ensuring that copyright does its job—helping to encourage creativity—without unduly interfering with free speech and innovation.

To help the Judiciary Committee, and to explain why fixing this part of copyright law is so important, EFF is releasing a white paper today. Collateral Damages explains how copyright’s system of “statutory damages” chills free speech and harms innovation. Statutory damages are automatic penalties of $750 to $150,000 per infringed work that a judge or jury can award to copyright holders without the copyright holders having to present any proof of their actual harm. This system leads to excessive penalties, like $222,000 against a home Internet user for sharing 24 copyrighted songs. It’s also wildly unpredictable, with vastly different amounts being awarded by different juries for the same conduct, making lawsuits a gamble.

Collateral Damages lays out some of the problems this system causes. The threat of excessive and unpredictable damages is why many filmmakers struggle to obtain the liability insurance their financial backers require. It's part of why innovators with new products that necessarily use and improve on creative work can't find investors. And it's one of the main reasons why so many unscrupulous lawyers have turned to copyright trolling to turn a failing movie or pornographic video into a litigation cash cow.

Copyright doesn't need these excessive penalties to accomplish its purpose. EFF’s whitepaper suggests some ways that Congress can fix statutory damages, including requiring evidence of harm when it’s available and eliminating statutory damages for those who rely on fair use in a reasonable way.

Statutory damages are likely to be a major topic at today’s hearing, and also at roundtable discussions that the Department of Commerce is holding next week: in Los Angeles on July 28 and Berkeley, California on July 29.

Six years ago, a federal judge implored Congress to reform copyright's penalties. Let's hope Congress is finally ready to listen.

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