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To install software, you virtually always have to have a license to do so, which states the conditions that you must observe in order to have permission to install the software. Sometimes an institution obtains a license from the rights-holder which allows them to distribute copies in a specified way, subject to a set of conditions on X imposed on the end user. (I believe this is what "sub-licensing" refers to).

The institution may err in its statement of the sub-license terms, for instance omitting a specification "non-commercial use only". In that case, the end user is misled as to what their actual legal relationship to the rights holder is: they have not been told that the software may not be used commercially, but permission was contingent on that restriction. The user also has no way to know what the license agreement is between the rights holder and the institution (except if the terms of that agreement are published). Using the software for a commercial purpose is thus not permitted, and the user has infringed on copyright.

Although the user is innocent, they still did the act. As far as I know, the copyright statutes do not require any particular mental state for liability so there is no innocent infringement defense. 17 USC 504(c)(2) does allow mitigation of statutory damages:

In a case where the infringer sustains the burden of proving, and the court finds, that such infringer was not aware and had no reason to believe that his or her acts constituted an infringement of copyright, the court in its discretion may reduce the award of statutory damages to a sum of not less than $200.

The user might then sue the institution to recover that amount.

However, a lot of law is written by the courts. So my questions are (1) is it correct that there is no statutory provision that makes such a user non-liable and (2) is there any case law that nevertheless makes an innocent infringement defense possible? Mainly I am asking about US law, but facts from other jurisdictions are also welcome.

  • One way to deal with this is for the user, when sued, to make the institution a third party so that (since it was their mistake) they end up paying the damages. – Tim Lymington Dec 9 '17 at 23:05
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"Innocent" infringement is still infringement and is punishable as intentional infringement or "at the court's discretion" with a nominal $200 fine.

In the circumstances the court will almost certainly exercise their discretion and reduce the damages to $200.

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