Ninth
Circuit decides that U.S. plaintiff may not recover damages for copyright
infringement outside U.S., and that exception to general rule against
extraterritorial application of Copyright Act when completed domestic
infringement enables infringements abroad is inapplicable
The
copyrighted works at issue in the following case are the controversial video
recordings of “The Beating of Reginald Denny” and “Beating of Man in White
Panel Truck” that were recorded at Florence Avenue and Normandie Boulevard in
Los Angeles during the 1992 riots.
Los
Angeles News Service (LANS) had produced the recordings and sold a license to
rebroadcast them to several other companies, including the National
Broadcasting Company (NBC) which used the recordings for its Today Show. NBC,
in turn, forwarded the Today Show broadcast to Visnews International (USA),
Ltd., pursuant to a news supply agreement, resulting in further distribution.
LANS
then sued several Reuters companies (jointly “Reuters”) and Visnews for
copyright infringement and other claims. The U.S. district court found that no
liability arose under the Copyright Act for infringements that allegedly took
place outside the U.S. Accordingly, it granted Reuters and Visnews a partial
summary judgment on the issue of extraterritorial infringement.
The
act of copying the works within the U.S. for further distribution, however, was
a domestic act of infringement that could not be excused as fair use. For this,
the district court awarded LANS statutory damages of $60,000. LANS appealed,
arguing that it should have been allowed to recover its actual damages. The
U.S. Court of Appeals for the Ninth Circuit affirms.
“This
Court had previously reviewed the district court’s
interpretation
of the Copyright Act with regard to extraterritorial acts in L.A. News Serv. v.
Reuters TV Int’l, Ltd. (Reuters III), 149 F.3d 987, 992 (9th Cir. 1998). The
Court had held that, while the Copyright Act does not apply extraterritorially,
an exception may apply where an infringer’s activity is completed entirely
within the U.S. but where domestic infringement enabled further exploitation
abroad. Here, LANS was allegedly entitled to damages resulting from the
exploitation abroad of defendants’ local infringement.”
“On
the whole, we conclude that Reuters III adhered very closely to our decision in
Subafilms, Ltd. v. MGM-Pathe Communs. Co., 24 F.3d 1088 (9th Cir. 1994) (en banc).
Subafilms reaffirmed that the copyright laws have no application beyond the
U.S. border, id. at 1095-98, and expressly took no position on the merits of
the Update Art [Update Art, Inc. v. Modiin Publ’g, Ltd., 843 F.2d 67 (2d Cir.
1988)] court’s apparent willingness to award damages ... LANS’s appeal thus
presents the precise question that Subafilms reserved ... and as the prior
panel recognized, such question should be resolved in light of the principles
the en banc court laid down.”
“The
import of such principles counsel a narrow application of the adoption in
Reuters III of the exception to the general rule. In particular, the ...
constructive trust rationale [of Sheldon v. Metro-Goldwyn Pictures Corp., 106
F.2d 45 (2d Cir. 1939), aff’d, 309 U.S. 390 (1940)] includes a territorial
connection ... that preserves consistency with Congress’s decision to keep the
copyright laws – presumably including Section 504, which prescribes remedies –
territorially confined.”
“Moreover,
no rational deterrent function is served by making an infringer whose domestic
act of infringement – from which he earns no profit – leads to widespread
extraterritorial infringement, liable for the copyright owner’s entire loss of
value or profit from that overseas infringement, particularly if the overseas
infringement is legal where it takes place. ... Moreover, the resulting
over-deterrence might chill the fair use of the copyrighted works in close
cases.” [Slip Op. 15-16]
As a
result, the Court reads Reuters III to allow only a narrow exception for the
recovery of the infringer’s profits to Subafilms’ general rule against
extraterritorial application. Under the circumstances of this case, the
Copyright Act does not permit LANS to recover actual damages that resulted from
Reuters’ and Visnews’ foreign infringements.
Citation:
Los Angeles News Service v. Reuters Television Int’l Ltd., 340 F.3d 926
(9th Cir. 2003).
**** Terik Hashmi is a business consultant serving businesses in the marketing realm. Among his clients are a medical service provider and an Online Reputation Management company. - Attorney Website at: https://terikhashmiattorney.com/ - Attorney Profile at: https://solomonlawguild.com/terik-hashmi%2C-esq# - Attorney News at https://attorneygazette.com/terik-hashmi%2C-consultant#eec97f53-49a0-4c94-869a-4847514cb694