Copyright Statutory Damages Barred Even When Different Rights of Copyright Owner are Infringed Before and After Registration: Fifth Circuit | Practical Law

Copyright Statutory Damages Barred Even When Different Rights of Copyright Owner are Infringed Before and After Registration: Fifth Circuit | Practical Law

In Southern Credentialing Support Servs., L.L.C. v. Hammond Surgical Hosp., L.L.C., the US Court of Appeals for the Fifth Circuit held that 17 U.S.C. § 412 bars statutory damage awards even when a defendant violates any of the copyright owner's exclusive rights before registration and violates a different right in the same work after registration.

Copyright Statutory Damages Barred Even When Different Rights of Copyright Owner are Infringed Before and After Registration: Fifth Circuit

by Practical Law Intellectual Property & Technology
Published on 13 Jan 2020 • USA (National/Federal)
In Southern Credentialing Support Servs., L.L.C. v. Hammond Surgical Hosp., L.L.C., the US Court of Appeals for the Fifth Circuit held that 17 U.S.C. § 412 bars statutory damage awards even when a defendant violates any of the copyright owner's exclusive rights before registration and violates a different right in the same work after registration.
On January 9, 2020, in Southern Credentialing Support Servs., L.L.C. v. Hammond Surgical Hosp., L.L.C., the US Court of Appeals for the Fifth Circuit reversed in part, affirmed in part, and remanded the US District Court for the Eastern District of Louisiana's decision, holding that 17 U.S.C. § 412 bars statutory damage awards even when a defendant violates any of the copyright owner's exclusive rights before registration and violates a different right in the same work after registration ( (5th Cir. Jan. 9. 2020)).
In 2010, Hammond Surgical Hospital, L.L.C. (Hammond) engaged Southern Credentialing Support Services, L.L.C. (Southern) to provide services to verify that doctors are qualified to practice at a hospital. Southern designed two custom packets of forms for doctors to complete, an initial credentialing application packet (83 pages) and a recredentialing packet (113 pages), so that Southern could verify the information provided. In 2013, after Southern stopped providing services to Hammond, Hammond contracted with a new credentialing services provider. The new provider used forms that contained fifty pages that were identical to Southern's forms. Between 2013 and 2017, the forms were accessible through a password-protected portal on the new provider's website. By 2017, the forms were available on the website without a password.
After learning that Hammond was still using their forms, Southern registered a copyright for the initial credentialing application packet in February 2014 and the recredentialing packet in July 2014. Southern sued Hammond in the Eastern District of Louisiana for copyright infringement and sought summary judgment and statutory damages.
The district court granted summary judgment as to the existence of the copyrights and the infringement and issued a permanent injunction barring Hammond from infringing Southern's copyrights. The district court held a bench trial to determine damages and:
  • Held that statutory damages were appropriate despite Section 412's bar because the defendant's post-2017 internet distribution of the packets was "different-in-kind" from its pre-2017 infringing activity (see 17 U.S.C. § 412).
  • Awarded Southern $5,000 ($2,500 for each packet) in statutory damages after determining the infringement was not willful.
  • Ruled that Southern was entitled to attorneys' fees and costs.
On appeal, the Fifth Circuit first determined that Southern had valid copyrights in its forms and that Hammond infringed on those copyrights. The Fifth Circuit then reasoned, relying on its decision in Mason v. Montgomery Data, Inc., that:
  • Section 412 bars statutory damages when the same defendant infringed the same work in the same fashion before and after registration.
  • The limit on statutory damages should be read consistently with 17 U.S.C. § 504 which allows for a single statutory award for all infringements of a single work.
  • Section 412 should be read broadly to prohibit statutory damages for both pre- and post-registration infringements. (967 F.2d 135,143-44 (5th Cir. 1992).)
In light of this reasoning, the Fifth Circuit:
  • Held that Section 412 bars statutory damage awards when a defendant violates any one of the six exclusive rights of a copyright owner before registration and violates a different right in the same work after registration.
  • Reversed the district court's ruling allowing statutory damages for Hammond's pre-registration infringement.
  • Affirmed the permanent injunction barring future infringement.
  • Remanded for entry of an amended judgment without statutory damages or attorneys' fees.