should be in order to justify such an award. In the majority of circuits,

the prevailing plaintiff routinely receives attorney's fees.

B. Analysis of H.R. 671

The legislation would amend section 505(b) to guarantee to an individual or small business plaintiff prevailing in a suit for infringement an award of a reasonable attorney's fee. With respect to infringements of copyright when the plaintiff is not an individual or small business, the present rule leaving an award of an attorney's fee to the discretion of the court, remains unchanged.

The bill has no affect on the registration prerequisite. Plaintiffs would still have to register their claims timely in order to be eligible for this special remedy under this legislation. Since attorney's fees are considered part of the panoply of extraordinary remedies, litigants would still have to register before infringement commences or within 3 months after first publication to become entitled to a remedy under this legislation.

In determining eligible parties, the bill includes individual authors and small business concerns that are the owners of the infringed rights. "Small business concern" is defined as any business concern with employees, including those of affiliates, that number 500 or fewer. Concerns are considered affiliated if they control or are controlled by each other or if they are commonly controlled by another organization. To determine the size of a business concern, the bill calls for the average number of full time, part time, or temporary employees during each pay

A "public broadcasting entity" is given the same meaning in new

subsection 505(b)(1)(B) as appears in section 118(g) of the 1976 copyright

law.

A term that is not defined is "employee" for the bill's purposes. A question then arises whether "employee" is intended to encompass the Supreme Court interpretation of the term for purposes of construing the "work made for hire" provision of section 101, as articulated by Community for Creative Non-Violence v. Reid, 490 U.S. 104 L.Ed.2d 811,

Copyright L. Dec. (CCH) Par.26,425 (1989).

To a certain extent, nonprofit libraries, archives, and educational institutions are exempt from having mandatory fee awards assessed against them. Public broadcasting entities and their employees are likewise exempt. The scope of these exemptions generally includes the special entities that the 1976 copyright law carves out in providing for remission of damages for certain nonprofit institutions.

Thus,

Except as defined in the bill, state agencies, like private and corporate defendants would not be exempt from mandatory fee awards. actions by a nonprofit library, archive or educational institution can be subject to a mandatory fee awards if the action complained of violates a right other than the reproduction of the work. Public performance, for example, would not be exempt from mandatory attorney's fees if it was not permitted under section 110's public performance exemptions or other provisions. Similarly, unlawful performance and other activities by a public broadcasting entity other than reproduction of transmission programs

of motion pictures or other audiovisual works could be found subject to

The bill is based on the premise that all plaintiffs and defendants are not equal. It should be of particular value to an individual or small business interested in prosecuting an infringement suit but fearful that the costs of litigation may far outweigh the damages available even if they prove infringement.

Arguments Supporting Mandatory Fee Awards:

1. Where a plaintiff may be seen as disadvantaged by larger forces and may have some difficulty finding adequate representation, mandatory fee shifting affords plaintiffs a means of acquiring competent counsel. Mandatory fee shifting would be particularly valuable in jurisdictions that not represented by a sufficient number of copyright counsel, for example, those far removed from copyright intensive locations such as New York and California.

are

2.

Mandatory fee awards definitely influence the decision to bring suit. This furthers the objective of the copyright system in encouraging private parties to bring their own cases, instead of relying on U.S. attorneys to bring criminal cases.

Presently individual and small businesses may be unable to rely on the additional deterrent of criminal penalties. Government agencies and U.S. attorneys simply do not have adequate resources to bring criminal

picture and sound recording owners may be financially able to enforce their rights, while infringements of less commercially successfully or less widely distributed works, e.g. training films are ignored. The owner may not have the means to prosecute. H.R. 671 would give individual and small business authors of audiovisual works more solid incentive to bring an infringement action.

use

3. Mandatory awards would have a deterrent effect on the decision to copyrighted material without permission, especially where the user may

be a large organization that can afford devoting resources to litigation. A large organization with a war chest can adopt a "sue me" attitude where damages are likely to be small based on the market value of the work infringed, especially in situations where plaintiff has produced the work to defendant's specifications. The subsequent market may be limited and thus damages alone may be insufficient to make the case worthwhile.

4. H.R. 671 may encourage broad participation in the copyright registration system among individuals and small businesses. Since no award

may be made where a work was not timely registered, incidences of prompt registration should increase, to the benefit of the collections of the Library of Congress and the integrity of the Copyright Office records.

Factors Militating Against Mandatory Fee Awards:

1. No great injustice has been established demonstrating a need for this legislation. Reasonable counsel fees are routine in circuits where most copyright cases are heard. The decisions from most courts of appeal have been, by and large, rational, and fee awards have been reasonable.

2. H.R. 671, at least in the short term, could encourage harassment suits. A certain amount of increased incidence of lawsuits is expected from this bill to correct the stated problem. Although the plaintiff who brings needless lawsuits can be fully penalized under the discretionary provision for losing plaintiffs, Congress may believe that additional lawsuits should not be encouraged when dockets are already full.

3. Some smaller business entities can well afford to pursue litigation under present rules. A more narrow rule might be predicated on the capitalization of the business concern rather than on the number of employees.

4. Innocent infringers might be unfairly penalized. A court may read the mandatory attorney's fees to impose substantial costs on innocent infringers who fall outside the nonprofit and public broadcasting classes mentioned in subsection. Thus a small business defendant unintentionally infringing a copyright may fall victim to a predatory small business owner with the mandatory attorney's fee as a weapon in litigation.

D. Conclusion: Copyright Office Views

Individual author plaintiffs present the most compelling case for some consideration of mandatory fees. Individual authors almost always have fewer available funds and without a clear right to attorney's fees, may be afraid to enforce their rights, leaving them unprotected for practical purposes. Individual authors also emphasize the clearest link to carrying out the constitutional purpose to encourage authorship, part of which is to discourage infringement that harms authors. H. R. 671 would help