• When Reporting the News Becomes an Expensive Mistake
  • April 8, 2004
  • Law Firm: Reed Smith LLP - Pittsburgh Office
  • On an appeal, the United States District Court for the Northern District of Maryland upheld a damages award of nearly $20 million for copyright infringement against financial services company, Legg Mason. The company was found to have copied and circulated an online financial newsletter, Lowry's New York Stock Exchange Market Trend Analysis , produced by Lowry's Reports Inc., without authorization and continued to circulate the newsletter even after the allegations of copyright violations were made in July 2001.

    The gravamen of the complaint was Legg Mason's daily posting of Lowry's newsletter on its firm intranet, known as "Legg Works," accessed by all of its brokers. Legg Mason argued that low-level employees caught up in a technological transition had made a regrettable mistake. Lowry argued that it was a corporate practice that made the technology available by which the infringement was foreseeable.

    Legg Mason's motion for a new trial on the grounds that the verdict was excessive, based on erroneous jury instructions, and contrary to the evidence, was denied. Legg Mason had sought to limit the damages to $59,000. The judge, however, found that Legg Mason was a sophisticated entity and its continued infringement of plaintiff's copyright supported the verdict. The court also found that the amount was in the range deemed permissible by the Copyright Act, which provides statutory damages as a special copyright remedy . The jury has broad discretion to award an amount that it deems "just," taking into account all of the circumstances and the need to deter, punish, encourage copyright enforcement, and assure that the infringer does not benefit from the infringement.

    Legg Mason vows that it will appeal.

    Why This Matters: Reproducing materials from newsletters to give employees newsworthy information is quite common. While reporting the facts from newsletters in ones own words is permitted, copying the content is not and can expose a company to substantial damages.