Opinion ID: 145312
Heading Depth: 2
Heading Rank: 1

Heading: The District Court's Decision to Award Statutory Damages on a Per-Album Basis

Text: Appellants contend that the District Court erred in holding that the Albums were compilations, and thus limiting statutory damages to one award for each Album. Appellants argue that each song on the Albums qualifies as a separate work because, according to Appellants, each song is separately copyrighted, [4] and because Orchard sold the songs individually. The question of whether a work constitutes a compilation for the purposes of statutory damages pursuant to Section 504(c)(1) of the Copyright Act is a mixed question of law and fact. See Gamma Audio & Video, Inc. v. Ean-Chea, 11 F.3d 1106, 1116 (1st Cir.1993). We thus review de novo the District Court's decision that the Albums are compilations. See APL Co. PTE Ltd. v. Blue Water Shipping A/S Inc., 592 F.3d 108, 110 (2d Cir.2010). We conclude that the District Court's ruling was correct. The Copyright Act allows only one award of statutory damages for any work infringed. 17 U.S.C. § 504(c)(1). It states that all the parts of a compilation. . . constitute one work. Id. § 504(c)(1). It defines a compilation as a work formed by the collection and assembling of preexisting materials or of data that are selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship. Id. § 101. The term compilation includes collected works, which are defined as works in which a number of contributions, constituting separate and independent works in themselves, are assembled into a collective work. Id. The Conference Report that accompanied the Act and explains many of its provisions, states that a compilation results from a process of selecting, bringing together, organizing, and arranging previously existing material of all kinds, regardless of whether. . . the individual items in the material have been or ever could have been subject to copyright.  H.R.Rep. No. 1476, 94th Cong., 2d Sess. 162, reprinted in 1976 U.S.C.C.A.N. 5659 (emphasis added). An album falls within the Act's expansive definition of compilation. An album is a collection of preexisting materials songsthat are selected and arranged by the author in a way that results in an original work of authorship the album. Based on a plain reading of the statute, therefore, infringement of an album should result in only one statutory damage award. The fact that each song may have received a separate copyright is irrelevant to this analysis. See H.R.Rep. No. 1476, 94th Cong., 2d Sess. 162, reprinted in 1976 U.S.C.C.A.N. 5659. We have addressed in two previous decisions the issue of what constitutes a compilation subject to Section 504(c)(1)'s one-award restriction. See Twin Peaks Prods., Inc. v. Publ'ns. Int'l Ltd., 996 F.2d 1366, 1381 (2d Cir.1993); WB Music Corp. v. RTV Comm. Group, Inc., 445 F.3d 538, 541 (2d Cir.2006). In both decisions, we focused on whether the plaintiffthe copyright holderissued its works separately, or together as a unit. In Twin Peaks, the plaintiff issued each episode of a television series sequentially, each at a different time. The defendant printed eight teleplays from the series in one book. 996 F.2d at 1381. We held that the plaintiff could receive a separate award of statutory damages for each of the eight teleplays because the plaintiff had issued the works separately, as independent television episodes. [5] Id. In WB Music Corp., the plaintiff had separately issued each of thirteen songs. 445 F.3d at 541. It was the defendant who issued the songs in album form. Id. We held that the plaintiff could receive a separate statutory damage award for each song, because there was no evidence . . . that any of the separately copyrighted works were included in a compilation authorized by the [ plaintiff ]. Id. (emphasis added). Here, it is the copyright holders who issued their works as compilations; they chose to issue Albums. In this situation, the plain language of the Copyright Act limits the copyright holders' statutory damage award to one for each Album. [6] Appellants argue that the District Court should have allowed a statutory damage award for each song, because each song has independent economic value: internet customers could listen to and purchase copies of each song, each of which Appellants claim was independently copyrighted. Plaintiffs point to a decision from the First Circuit, Gamma Audio, in which the Court held that a work that is part of a multi-part product can constitute a separate work for the purposes of statutory damages if it has independent economic value and . . . is viable. 11 F.3d at 1116-17. Applying what that court described as a functional test, the court held that each episode of a television show, although released on videotape as part of a complete series, could be the subject of a separate statutory damage award because each episode could be rented and viewed separately. Id. at 1117-18. At least three other circuits have adopted the independent economic value test, although to date none has applied the test to an album of music. See MCA Television Ltd. v. Feltner, 89 F.3d 766, 769 (11th Cir.1996) (holding that each episode of a television show can be the subject of a separate statutory damage award because each episode has independent economic value); Columbia Pictures Television v. Krypton Broad. of Birmingham, Inc., 106 F.3d 284, 295 (9th Cir.1997) (same) (reversed on other grounds, 523 U.S. 340, 118 S.Ct. 1279, 140 L.Ed.2d 438 (1998)); Walt Disney Co. v. Powell, 897 F.2d 565, 569 (D.C.Cir.1990) (holding that plaintiff could not receive a separate statutory damage award for each, separate picture of Mickey Mouse and Minnie Mouse in different poses, because each picture did not have independent economic value). Appellants argue that it is particularly appropriate to apply the independent economic value test to music albums, because music is increasingly available in digital form, which has made it easier for infringers to break apart albums and sell the album's songs individually, as Appellees did here. This Court has never adopted the independent economic value test, and we decline to do so in this case. [7] The Act specifically states that all parts of a compilation must be treated as one work for the purpose of calculating statutory damages. This language provides no exception for a part of a compilation that has independent economic value, and the Court will not create such an exception. See UMG Recordings, Inc., 109 F.Supp.2d at 225 (stating that to award statutory damages on a per-song basis would make a total mockery of Congress' express mandate that all parts of a compilation must be treated as a single `work' for purposes of computing statutory damages). We cannot disregard the statutory language simply because digital music has made it easier for infringers to make parts of an album available separately. This interpretation of the statute is consistent with the Congressional intent expressed in the Conference Report that accompanied the 1976 Copyright Act, which states that the one-award restriction applies even if the parts of the compilation are regarded as independent works for other purposes. H.R.Rep. No. 1476, 94th Cong., 2d Sess. 162, reprinted in 1976 U.S.C.C.A.N. 5659, 5778. Accordingly, we affirm the District Court's decision to treat each Album as a compilation, subject to only one award of statutory damages.