If You’re Too Late to Sue a Manufacturer for Copyright Infringement Statutory Damages, Can You Still Sue the Retailers Who Sell the Infringing Goods?

A lawyer friend from outside the U.S. asked:  If an overseas manufacturer had copied a client’s designs, but the client had not registered its copyright in the design before the infringement, could you sue the retailers who sold the infringing goods?  Short answer:  yes, but you won’t get statutory damages.

U.S. copyright law requires copyright registration before an infringement in order to get the best parts of copyright law. Infringement that occurs more than 3 months before copyright registration of the infringed work is subject to paying actual damages, but not to statutory damages and (the big incentive) attorneys’ fees.

We assumed that the client’s works (a) were “original” enough to deserve copyright protection; (b) were not registered for copyright protection in the U.S. or elsewhere; (c) were infringed by a manufacturer’s copying the works after the client published the works but more than 3 months before any copyright registration of the works; but (d) might be registered in the U.S. before any retailers in the U.S. started to sell the infringing goods.  We wondered whether under these circumstances, the client might be able to sue, at least, the retailers for statutory damages and attorneys’ fees.

Unfortunately, current case law indicates that under such circumstances, the client would not be able to seek statutory damages and attorneys’ fees; rather, they would be limited to seeking an injunction and actual damages from copyright infringement.  For example, in a case against the National Football League Properties (“NFLP”) for infringing copyright in a team logo design, plaintiff argued that the NFLP may have infringed the work before copyright registration, but all the retailers (selling sweatshirts and other merchandise with the infringing logos) infringed after registration.

However, the court rejected plaintiff’s argument, and wrote that a different section of the Copyright Act allows for statutory damages when any two or more infringers are liable jointly and severally.   Under this provision, the NFLP’s sweatshirt licensees (the retailers) are “paired” (as two or more infringers) with the NFLP’s initial infringement.   The court traced the licensee’s post-registration infringing conduct back to NFLP’s pre-registration conduct, and denied statutory damages to plaintiff.

So, while my research is far from exhaustive, it indicates that the client’s remedies would be limited to injunctive relief, actual damages and to court costs (but not attorneys’ fees).  On the other hand, an injunction that stops the infringement, and actual damages, might be significant in a particular case.   In any event, I recommended that we engage in an aggressive campaign to register the copyright in the clients’ works. That way, any infringement by the manufacturer (or its retailer customers) of the new works after registration could be subject to statutory damages and attorneys’ fees, as well.