Social media sites are transforming not only the daily lives of consumers, but also how companies interact with consumers. Here at Morrison Foerster, across all of our practice groups, we are seeing complex, cutting-edge legal issues arising out of social media. As with the Internet boom during the mid-to-late 1990s, social media is generating new legal questions at a far faster pace than the law’s ability to provide answers to such questions. In an effort to stay on top of these emerging issues, and to keep our clients and friends informed of new developments, Morrison Foerster publishes this blog devoted to the law and business of social media.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Aaron is the chair of the firm’s Technology Transactions Group and co-chair of the Interactive + Digital Media Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals.Aaron’s practice focuses on advising both established and emerging companies in a variety of data- and technology-intensive sectors, including software, SaaS, cloud-based technology, digital media (social media, AR/VR, gaming, streaming media, AdTech), AI, healthcare, consumer electronics, e-commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on branding and marketing, trademark licensing, and content-related transactions, as well as the intellectual property aspects of mergers, acquisitions, asset spin-offs, and private equity investments.He has represented clients such as Autodesk, Meta, OpenAI, Splunk, Konami, Kaiser Permanente, SoftBank, Visa, and Yahoo, among others.Aaron has been recognized by numerous publications for his work on market-defining technology transactions. He is currently ranked by Chambers USA for “Technology Transactions.”Aaron also serves as co-editor of Socially Aware, the firm’s award-winning newsletter and blog devoted to the law and business of social media, and regularly publishes on various IP and technology-related topics. Aaron is also a sought-after speaker on new and emerging areas of law, and is a frequent presenter and panelist at conferences and legal services programs. In addition to his active practice, Aaron regularly provides pro bono assistance to various nonprofit and charitable organizations such as Common Sense Media and the Starlight Children’s Foundation. He is a member of the board of directors of California Lawyers for the Arts.While in law school at the University of California, Berkeley, Boalt Hall School of Law, Aaron served as executive editor of the California Law Review and was elected to the Order of the Coif. Following law school, Aaron served as law clerk to the Honorable William H. Orrick and the Honorable Martin J. Jenkins, both United States District Judges for the Northern District of California.

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Aaron is the chair of our Technology Transactions Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals. Aaron’s practice focuses on advising both established and emerging companies in a variety of data– and technology–intensive sectors, including software, SaaS, cloud computing, AR/VR, AI, gaming, healthcare, consumer electronics, social media, e–commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on the intellectual property aspects of mergers, acquisitions, asset spin–offs, and private equity investments.

Aaron P. Rubin

Lawrence Gallick is of counsel in the firm’s Austin office and a member of the Technology Transactions Group.Lawrence focuses his practice on technology transactions and licensing matters. His diverse experience includes advising on SaaS agreements, cross-licensing agreements, research and collaboration agreements, development agreements, and distribution agreements. He counsels a broad range of companies across the software, hardware, life sciences, biotech and FinTech spaces, as well as other entities including universities.He advises clients in connection with general corporate matters including contract negotiations, and leasing and technology placement agreements.Lawrence also serves as co-editor of <a href="https://www.sociallyawareblog.com/" target="_blank">Socially Aware</a>, the firm’s award-winning newsletter and blog devoted to the law and business of social media, and regularly publishes on various IP and technology-related topics.Prior to joining the firm, Lawrence was counsel at another major law firm. Before earning his law degree, Lawrence was a web consultant, project manager, and web developer in Portland, Oregon, where he managed and consulted on projects using industry methodologies and performed custom development and integration of content management systems.Lawrence was named a Super Lawyers “Rising Star” in 2015 and 2018–2022, and is licensed in both California and New York. Lawrence earned his J.D. from the University at Buffalo School of Law, where he was the electronic systems editor for the Buffalo Law Review and awarded the ABA-BNA Award for Excellence in the Study of Intellectual Property Law.

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Lawrence Gallick

Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster.Anthony advises clients on general commercial and transactional matters. He regularly advises companies on the IP aspects of their M&A transactions. His clients include technology, digital media and content for television and music, financial services, and communications companies with diverse intellectual property assets and issues.His practice focuses on the legal aspects of developing, licensing, and commercializing technology and intellectual property, as well as negotiating general commercial contracts, including outsourcing transactions, as well as content and data licenses. He regularly assists clients with legal issues relating to licensing and commercialization of digital media and content, digital content that is distributed over the Internet or streamed, mobile applications and social media, as well as the licensing of recorded music for distribution via digital platforms. Anthony is also experienced with issues relating to open-source software, software development, artificial intelligence and machine learning, cloud-based technology, and protection of proprietary information.Anthony has extensive experience working on matters involving disruptive technologies, such as blockchain. He has helped fintech clients with general intellectual property issues in connection with terms of service for online financial products and services.Anthony is an integral part of the outside pro bono legal team for nonprofit organizations based in New York, including advising clients on legal issues regarding entertainment, social media, privacy rights, and the negotiation of outsourcing and service agreements. Anthony received his J.D. from the University of Michigan Law School in 2009. He received his B.S. from Cornell University in 2004.

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Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster. He advises clients on general commercial and transactional matters. His clients include technology, media, and communications companies with considerable intellectual property assets. His practice focuses on the legal aspects of licensing and commercializing technology and intellectual property, as well as negotiating general commercial contracts. He also regularly assists clients with legal issues relating to mobile applications and social media.

Anthony M. Ramirez

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Socially Aware is devoted to the law and business of social media, proactively addressing emerging issues and keeping our clients informed of new developments. We cover fields such as artificial intelligence, privacy and data security, Section 230, intellectual property, and much more.

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One of the most significant legal concerns for Internet service providers is the risk of exposure to liability for the copyright infringements of their users. T

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Limiting Statutory Damages in Internet Copyright Cases

Limiting Statutory Damages in Internet Copyright Cases | Socially Aware

Paul Goldstein

Joyce Liou

One of the most significant legal concerns for Internet service providers is the risk of exposure to liability for the copyright infringements of their users. The concern is not unreasonable. Because Internet service providers can be held secondarily liable for the infringements of their users, and because this liability can come with statutory damages attached, the service provider’s potential economic exposure can be significant, especially for Internet service providers engaged in the transmission or hosting of user-generated content.Moreover, the principle of joint and several liability may further increase this potential economic exposure for Internet service providers.Under <a href="https://www.law.cornell.edu/uscode/text/17/504" target="_blank" rel="noopener">Section 504(c) of the Copyright Act</a>, which permits a range of statutory damages for each infringed work, the principle of joint and several liability can make a defendant liable for multiple statutory damage awards for infringing a single work. The Ninth Circuit’s decision in <a href="https://casetext.com/case/columbia-pictures-television-v-krypton-bc" target="_blank" rel="noopener">Columbia Pictures Television v. Krypton Broadcasting of Birmingham, Inc.</a> two decades ago illustrates the operation of this principle.The defendants in Columbia Pictures were three television stations that had directly infringed upon plaintiff’s copyrights independently of each other. Consequently, the company that owned the three stations was secondarily liable for their infringement. Relying in part on legislative history, the court held that the plaintiff was entitled to separately calculated statutory awards against each of the three stations as they were separate infringers, and that, with respect to these awards, each of the three stations was jointly and severally liable with their common owner.As applied to infringement on the Internet, statutory damages can have a truly punitive impact when the downstream direct infringements are numerous and the upstream infringer, often an Internet service provider, is secondarily liable. Even if a court exercises its discretion to award no more than the $750 minimum for each of the separate infringements subject to joint and several liability, a statutory award for tens—or hundreds—of thousands of Internet-based direct infringements could bankrupt all but the most deep-pocketed service provider. The mere prospect of such an award could discourage companies from entering this market.To avoid punitive statutory damage awards against jointly and severally liable copyright defendants, some courts have invoked proportionality as a principle of statutory interpretation. In <a href="https://casetext.com/case/arista-records-llc-v-lime-group-llc-7" target="_blank" rel="noopener">Arista Records LLC v. Lime Group LLC</a>, for example, a file-sharing service provider faced a potential near-billion-dollar damage award for the conduct of a multitude of downstream infringers. The New York district court found that “the most plausible interpretation of Section 504(c) is one that authorizes only a single statutory damage award per work against a secondarily liable defendant, particularly in the context of the mass infringement found in the context of online peer-to-peer file sharing.” Accordingly, the court limited the plaintiffs’ statutory damages to a single statutory damage award per work.More recently, in <a href="http://www.leagle.com/decision/In%20FCO%2020160818115/FRIEDMAN%20v.%20LIVE%20NATION%20MERCHANDISE,%20INC." target="_blank" rel="noopener">Friedman v. Live Nation Merchandise, Inc.</a>, the Ninth Circuit adopted a different approach to the joint-and-several-liability conundrum. The court held that, for a plaintiff to recover multiple damage awards against a secondarily liable defendant based on downstream infringement, it must join the direct infringers as defendants. The court found nothing in the text of Section 504(c)(1) that “admits of a ‘mass-marketing’ exception” of the sort endorsed in Arista, and it observed that its Columbia Pictures holding was premised on the fact that each downstream infringer in that case also was a named defendant. Because the plaintiff in Friedman had not joined any of the 104 alleged downstream infringers (retailers who distributed the infringing merchandise), their unadjudicated liability could not enlarge his statutory damage award against Live Nation.Read and applied literally, the statutory formulation could support multiplication of the statutory award against a single contributory infringer by the hundreds of downstream direct infringers with whom it is jointly and severally liable. The Friedman decision attempts to avoid this possibility by importing the due process requirement that, for the copyright owner to obtain remedies against the contributory infringer, the direct infringers must also be parties to the action.The Arista court presumably would have followed the Freidman approach in expanding a statutory award against the secondary infringer if the direct infringers had been joined. As the Arista court noted, if the plaintiffs “were suing multiple individually liable infringers in the same lawsuit, they would be entitled to one award with respect to each individual’s infringement of any given work.”Internet service providers and other potential upstream infringers should understand that the current statutory-damages regime is particularly unsuitable for Internet cases, and that, while Friedman and Arista offer expedient solutions for limiting punitive awards, they are neither definitive nor entirely responsive to the problem. As the Friedman court noted, there is nothing in the statute to support Arista’s “mass-marketing” exception to multiple statutory damage awards, much less to indicate how a court should go about drawing a “mass-market” line. Nor does the Friedman rule that downstream infringers must be joined as defendants help much in Internet cases, where a plaintiff can identify and join large numbers of defendants with relatively little effort, and where even a minimum award of $750 for each infringement might repay the expense. The real problem with Section 504(c)(1) in this respect is that Congress, when it considered the provision, failed to contemplate secondary liability for infringement on this massive scale.Until the contemporary reality of Internet usage is addressed in the statute, Internet service providers face greater exposure than do other alleged infringers.*             *             *For more Socially Aware articles on copyright infringement in the digital age, please read: <a title="Permalink to Second Circuit Clarifies “Repeat Infringer” Policy Requirement for DMCA Copyright Safe Harbors" href="http://www.sociallyawareblog.com/2017/02/06/repeat-infringer-policy-requirement-for-key-copyright-safe-harbor-for-online-service-providers/" target="_blank" rel="noopener">Second Circuit Clarifies “Repeat Infringer” Policy Requirement for DMCA Copyright Safe Harbors</a>; <a title="Permalink to New Copyright Office Rule Creates Potential “Gotcha” for Blogs and Websites Hosting User-Generated Content" href="http://www.sociallyawareblog.com/2016/12/06/new-copyright-office-rule-creates-potential-gotcha-for-blogs-and-websites-hosting-user-generated-content/" target="_blank" rel="noopener">New Copyright Office Rule Creates Potential “Gotcha” for Blogs and Websites Hosting User-Generated Content</a>; and <a title="Permalink to Do Not Go Gentle Into That Jurisdiction: No “Situs of Injury” Merely Because Copyrighted Material Is Accessible" href="http://www.sociallyawareblog.com/2016/05/03/do-not-go-gentle-into-that-jurisdiction-no-situs-of-injury-merely-because-copyrighted-material-is-accessible/" target="_blank" rel="noopener">Do Not Go Gentle Into That Jurisdiction: No “Situs of Injury” Merely Because Copyrighted Material Is Accessible</a>. For an interview with Paul Goldstein, see <a title="Permalink to Twenty Years Down the Road: A Q&A With Paul Goldstein, Author of Copyright’s Highway" href="http://www.sociallyawareblog.com/2015/03/03/twenty-years-down-the-road-a-qa-with-paul-goldstein-author-of-copyrights-highway/" target="_blank" rel="noopener">Twenty Years Down the Road: A Q&A With Paul Goldstein, Author of Copyright’s Highway</a>.