In a decision that could have few-reaching implications in future copyright infringement cases, the U.S. Court of Appeals for the Sixth Circuit affirmed in part and reversed in part a district court judgment awarding $370,000 in compensatory damages, $3.5 million in punitive damages and $150,000 in statutory damages, holding that the verdict was "improper to the extent that it included prejudgment and compound interest, included a calculation of interest from an incorrect date, and included unconstitutionally excessive punitive damages." Bridgeport Music, Inc. et al. v. Justin Combs Publishing et al., Case No. 06-6294 (6th Cir., Oct. 17, 2007) (Rogers, J.).
The plaintiffs, Bridgeport Music and Westbound Records, owned the copyright to the Ohio Players’ song "Singing in the Morning." The plaintiffs brought suit for copyright infringement against the music publishers behind the Notorious B.I.G. album Ready to Die, the title song of which contained an unlicensed sample of "Singing in the Morning." At trial, a jury found in favor of plaintiffs and awarded compensatory and punitive damages, finding defendants’ conduct willful. Bridgeport Music elected statutory damages under the Copyright Act, receiving the maximum award of $150,000. Westbound received approximately $370,000 (or its one-half share of compensatory damages) and punitive damages in the amount of $3.5 million.
On appeal, Combs Publishing raised 10 issues going to liability and damages calculation. The Sixth Circuit affirmed the district court’s judgment with respect to all liability issues.
With respect to compensatory damages, the court dissed Combs publishing, trashing its challenge to compensatory damages and holding that the "district court did not err by entering judgment on a verdict where, according to defendants, the amount of damages failed to allocate profits to account for the fact that the damage award included profits from non-infringing material." However, the Sixth Circuit did find the verdict "improper to the extent that it included prejudgment and compound interest, included a calculation of interest from an incorrect date, and included unconstitutionally excessive punitive damages."
Reviewing the punitive damages award de novo, the court concluded that the award to plaintiff Westport was "excessive in light of the Supreme Court’s three ‘guideposts’ for evaluating the constitutionality of a punitive damages award—the reprehensibility of defendants’ conduct, the disparity between plaintiffs’ harm and the award, and a comparison of the award and civil penalties in comparable cases." In remanding the case to the district court to determine an appropriate punitive damages award, the court instructed that in a case "where only one of the reprehensibility factors is present, a ratio in the range of 1:1 to 2:1 is all that due process will allow."
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