Karaoke Discs Were Not Fair Use and An Award of Copyright Statutory Damages of $31K Per Infringed Work Did Not Violate Due Process

Case: Zomba Enters., Inc. v. Panorama Records, Inc., (U.S. 6th Circuit Court of Appeals, June 26, 2007, No. 06-5013, 06-5266)

The One Sentence Summary: A copyright statutory damages award against a seller of karaoke discs was affirmed over fair use and due process objections.

Sixth Circuit Holdings:

• Karaoke discs were not "fair use" under the copyright act. The discs were not transformative, and the claim that they were used for teaching failed. The transformation factor focuses on the nature of the copying, not the nature of the end use, and the commercial purpose in creating the disc favored plaintiff in the fair use analysis.
• Pop songs are at the core of copyright protection, so the "nature of the work"factor of fair use favored plaintiff.
• The "amount of the work" copied factor favored plaintiff.
• As to the fourth fair use factor, effect on the market, Defendant's use would hurt plaintiff''s ability to license into the karaoke market.
• Defendant's infringement was willful because it acted with a reckless disregard of plaintiff's copyrights and its belief in its fair use defense was objectively unreasonable and unfounded after it entered into and then violated a consent order prohibiting it from distributing disks.
• The district court did not err in awarding statutory damages of $31,000 for each of the 27 infringed works.
• The award of statutory damages that exceeded actual damages by a factor of 44:1 did not violate due process.
• An award of attorneys' fees to plaintiff was proper.