From the Fairly Used Blog
For background, see Jonathan Pink interviews: District Court Invalidates Portion of Copyright Act as Unconstitutional; Holds State University and Employee Immune From Claim for Copyright Infringement (April 15, 2008) and Follow up questions on state university copyright immunity case - Marketing Information Masters v. Trustees of the California State University (April 23, 2008)
Minow: Can you tell us about the settlement in the Marketing Information Masters case?
Pink: Sure. The parties ultimately settled for $15K. The settlement was negotiated by my former partner because I moved firms just after filing the final motion that led to the court knocking out nearly everything that remained after we invalidated Section 511 of the Copyright Act. I had given the school a really low rate at my old firm, and unfortunately I could not keep them at that rate after the move, so I had to hand the case off. Nonetheless, I teed it up for settlement before I left by obtaining the court-ordered dismissal of nearly every claim, and by limiting plaintiff's possible win to about $5,000. Even though the final settlement was 3X that number, and I think the school over paid, my client wanted to be done with the law suit and what they paid in settlement they saved in fees. Overall, still a good result.
Minow: Why such a low settlement?
Pink: Ultimately, the reason the settlement was so low all tracks back to the ruling you first wrote about, and then a follow up motion we filed that knocked out still more claims. That is, first we invalidated the plaintiff's right to sue a state university for copyright infringement and assorted other claims, then we drastically whittled down the claims this plaintiff asserted against Professor Rauch . After that, the facts in this case simply did not support big damages. We were able to show that plaintiff never made more than $15,000 when it previously sold its report to the school, and it didn't lose the sale of report at issue because the plaintiff had refused to prepare that report for the school unless they were paid a lot more money. Bottom line was that I thought we could have shown almost no damages, so we made a statutory offer of about $5000. When the plaintiff failed to accept that offer, he was stuck because, unless he was able win more than that at trial, he would have ended up paying our attorneys fees. It was a gamble, but I thought we were holding the better hand. Although I wasn't involved in the final settlement talks because I moved firms, I understand that these tactics - and my former partner's negotiating skills - allowed the client to close the case for nearly nothing.
Minow: Now here's the key question. Can individual professors be held liable for copyright infringement even when they follow university copyright policies?
Pink: That is the key question, but because this case never went to trial, we can't answer it with certainty. The qualified answer is probably not, but it will be a question of fact as to whether the professor followed the university's copyright policies. In this case, the facts giving rise to the claim for infringement arose out of the conduct of an intern who was a visiting foreign student. The professor never knew that the student had copied text, and moreover, went of his way to correct that once it was brought to his attention. Of course, there is an argument that he should have known by more closely supervising the work. So did he follow the copyright policy of the university sufficiently to avoid liability? We don't know. But it was worth $15K not to put that question to the test.
Jonathan Pink is a member of the Intellectual Property Group at Bryan Cave , LLP. His practice focuses on high stakes copyright, trademark, trade secret and patent litigation. He can be reached at firstname.lastname@example.org