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Judge Rejects Copyright Damages Compilation Components

In Nature’s Enterprises, Inc. v. Pearson (2010), the U.S. District Court for the Southern District of New York rejected Nature’s Enterprises (“NEI’s”) request for damages for each component part of a compilation. NEI had alleged that Pearson infringed ten of NEI’s copyrighted DVD movies, of which two comprised compilations of films copyrighted by NEI. NEI requested $10,000 for each of the 10 DVDs and $750 for each of the 45 clips contained in the two compilation DVDs.

The court rejected NEI’s request for damages for each separate work and concluded that “a plaintiff should not receive a windfall recovery by inflating the number of works infringed from its own compilation.” The court determined that “when a plaintiff compiles assorted copyrighted products into a new product, the compilation constitutes one work for purposes of copyright infringement.”

NEI’s focus on “whether each item (in a compilation) has an independent economic value and is, in itself, viable” did not sway the court. Rather, the Court held that “adopting such a test would be to 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.” The court also declined to apply rulings from cases NEI presented in which defendants, rather than plaintiffs, created compilations of the plaintiff’s works.

If you have been contacted by the Business Software Alliance (BSA), Software & Information Industry Association (SIIA), or another software industry auditing entity, you should contact counsel experienced in negotiating with auditing entities regarding bundled software suites that resemble compilations.

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