WASHINGTON – A federal district court judge refused Wednesday to reduce the nearly $20 million award that Legg Mason was ordered to pay last year for infringing on the copyright of a financial newsletter publisher.
The ruling by District Judge William Quarles upheld what has been described as one of the largest amounts awarded in a copyright case. Quarles also granted a permanent injunction to prevent Legg Mason from redistributing stock exchange reports by Lowry’s Reports Inc.
“We are disappointed with the judge’s decision, and we intend to appeal,” said a Legg Mason spokeswoman, who refused further comment.
Legg Mason had argued in post-trial motions that the $19.7 million awarded last year was “disproportionate” and said damages amounted to only $59,000. But Quarles disagreed.
“The evidence indicated that Legg Mason was a sophisticated entity that repeatedly infringed Lowry’s copyrights, even when asked to stop,” Quarles wrote. “In light of this evidence, the court will not modify the jury’s award or order a new trial because of its size.”
Court records said an employee in the Legg Mason research department subscribed to Lowry’s daily and weekly reports and shared them with brokers through e-mail, faxes and the company intranet system from 1994 to 1999.
A former Legg Mason employee called Lowry’s in 2000 to inform them of the copyright violations, court documents said. Lowry’s Reports President Paul Desmond called and sent a letter to Legg Mason in July 2001, asking the company to stop distributing the reports without individual subscriptions.
But Legg Mason did not remove the reports from the company’s intranet service until August, and an employee continued e-mailing them through July 2002, according to court records.
Lowry’s sued Legg Mason in 2001 for infringing its copyright and breach of contract. The publisher claimed it would have made $6.8 million if every broker in the firm had subscribed.
A federal district court jury ruled against Legg Mason in July and awarded Lowry’s $19.7 million for breach of contract and copyright violations. The award included $825,270 because the jury found that Legg Mason breached the subscription contract.
Legg Mason challenged the award, but Quarles said Wednesday that copyright laws do not limit the amount juries can award, and Congress amended the Copyright Act in 1999 to encourage harsher penalties for violators as a deterrent.
Lowry’s also filed a motion requesting an additional $1.6 million in attorneys’ fees and other costs, but the judge denied it because he said the awarded amount was enough to cover the other costs.
Desmond said Thursday he was disappointed that his company was not awarded attorney’s fees, but does not plan to appeal.
Legg Mason canceled the subscription sometime in the last two years, said Desmond, who added that he would not let the brokerage subscribe again.
“They still seem to think that this whole thing was just a fluke,” Desmond said. “I’m not sure that they have come around to being contrite and committed to not making this mistake again.”
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