A federal court has issued a reminder to business owners trying to protect their intellectual property – register your copyrights as soon as possible or lose access to the most effective remedies for fighting copyright infringement. A plaintiff suing for copyright infringement may be able to recover statutory damages up to $30,000.00 (and up to $150,000.00 if the infringement was willful) as well as attorney’s fees. In FM Industries, Inc. v. Citicorp Credit Services, Inc., 2008 WL 717792 (N.D. Ill. 2008), the United States District Court for the Northern District of Illinois made it clear that statutory damages and attorney’s fees are not available when the alleged infringement of a copyright began before the copyright registration became effective.
FMI claimed that it owned the copyright in The Ultimate Debt Collection and Networking Software (“TUCANS”), a computer program that organizes debt collection data. The software also has the ability to transmit data between a debt collector and its attorneys. In May of 2001, Citicorp Credit entered into a vendor services agreement with FMI that gave Citicorp Credit the right to use TUCAN, and the agreement required that Citicorp Credit’s attorneys sign the TUCANS licensing agreement. FMI claims that in 2005, after the licensing agreement expired, one of Citicorp Credit’s attorneys continued to access data using the TUCANS system.
On summary judgment, the court concluded that FMI could not recover statutory damages or attorney’s fees. The version of TUCANS at issue was first published in 2004, but the effective date of the copyright registration was April 4, 2007. Under 17 U.S.C. § 412, a plaintiff suing for infringement cannot recover statutory damages or attorney’s fees if the infringement preceded the effective date of the registration. Statutory damages and fees are also not available if the work was published before the infringement unless the plaintiff registered the work within three months of the first publication. Because the alleged infringement began two years before the registration and because FMI had not registered the copyright within three months of the first publication, those remedies were not available as a matter of law.
It is clear that prompt registration of a copyright is an absolutely prerequisite to recovering statutory damages or attorney’s fees. The availability of such remedies is an effective tool in any effort by a company to stop infringement of its copyrights. To avoid losing access to those remedies, business should put in a place a process of making certain that their copyrights are registered as soon as practical.