Statutory Damages: In addition to actual damages, i.e. their provable losses caused by infringement plus the infringer’s provable additional profits from infringement, the Copyright Act allows rightsholders to seek so-called ‘statutory damages,’ which do not require proof of harm and ensure a minimum recovery of $700 per work infringed, but can reach as high as $150,000 per work infringed for cases of willful infringement.

Why it matters: Statutory damages give copyright holders extraordinary leverage against alleged infringers, especially in the internet era where some alleged infringements involve hundreds, thousands, or even millions of works. Not surprisingly, copyright plaintiffs seek the maximum almost every time, putting extreme pressure on defendants to settle, regardless of the merits. This dynamic played out most recently in the Anthropic case, in which a settlement was forced based on the prospect of “company-ending” damages even though another court in the same district had just ruled that the exact same conduct (using works sourced from so-called “shadow libraries” as AI training data) was a protected fair use. A CCIA study has shown that the toxic combination of statutory damages and an overbroad application of secondary liability would have a profoundly negative impact on the internet, forcing service providers to cut off accused users on the flimsiest of accusations. The United States is an outlier in providing for such excessive damages awards, and scholars have argued that the system is in need of reform.