Increasingly, printed matter is being made available via the Internet in electronic form, and both publishers and readers alike are starting to prefer an online format over the printed hardcopy format. One example is electronic newsletters or reports offered through online subscriptions. These can be emailed to the subscriber on a daily, weekly or monthly basis just as the printed hardcopy formats would have been mailed. Unlike the hardcopy formats, however, the electronic counterparts can be easily printed out or forwarded to large groups of people. Since these newsletters and reports are generally protected by copyrights, an unauthorized mass distribution can raise a host of risks and liabilities, including copyright infringement. If the subscriber has obtained the subscription as part of his or her employment for use by the employer, these risks and liabilities can be imputed to the employer.
Risk and Liabilities - A large part of the risks and liabilities relate to the amount of damages that can be claimed for copyright infringement for these types of works. The Copyright Act provides that a copyright owner may elect to recover, instead of actual damages and profits, an award of statutory damages of not less than $750 but not more than $30,000 per copyright infringed. 17 U.S.C. § 504(c)(1). This amount may be enhanced up to $150,000 per copyright infringed based on a finding of willful infringement. 17 U.S.C. § 504(c)(2). When each daily or weekly newsletter or report is deemed a separate copyrighted work, the statutory damages can add up quickly over the years.
In Lowry’s Reports, Inc. v. Legg Mason Inc.1, an employee in Legg Mason’s research department subscribed to reports published by Lowry’s which contained stock market analysis. The subscriptions were limited to individual subscriptions; institutional subscriptions and group licenses were not offered. The subscription agreement strictly prohibited unauthorized copying or dissemination of the reports and/or their contents. For more than a decade, Legg Mason paid for and received a single copy of the daily and weekly reports which were sent to the email address of the subscribing employee (who was the director of the research department). Copies of the reports and their contents were disseminated throughout the company via paper and email and even posted on a Legg Mason firm-wide intranet. After Lowry’s became aware of these actions, it sent a cease and desist letter to Legg Mason. While the copy on the company intranet was promptly removed, the director of the research department continued to email copies of the reports to other members of the research department. Lowry’s brought...
