The United States Copyright Act does not discriminate between two or more joint infringers, even if one infringer is found to be more “blameworthy”. As a result, distributors of copyrighted works must take special care to contract with reliable licensees to ensure they are not held liable for the entirety of a successful plaintiff’s copyright infringement damages, which can include the total value of the copyrighted work.
The perils of joint and several liability are magnified when a co-defendant becomes insolvent or “judgment proof.” Some of the protective measures a distributor can employ include verifying chain of title, securing Errors and Omissions insurance, (E&O) and by adequately vetting the financial strength of its licensor. If such protective measures are not taken, a distributor can find itself exclusively liable for a large copyright infringement damages award and the accompanying attorneys’ fees without any practical recourse against its licensor.
Originally published in IP Magazine in April, 2014.
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