This Note argues that Congress should adopt an amendment to the Copyright Act that distinguishes between "collections" and "compilations" for the purpose of statutory damages. In order to avoid exacerbating the problem of already high statutory damages, the amendment should also clearly establish a three-tiered statutory-damage scheme that would cover innocent infringement, knowing infringement, and willful infringement for commercial advantage or private financial gain. Part I briefly traces the evolution of statutory damages for copyright infringement over the last hundred years. Part II analyzes the confusion surrounding the two opposing views that the federal courts currently take when interpreting the compilation clause and the problems that arise when assessing statutory damages awards for the infringement of digital sound recordings.
Finally, Part III proposes a two-part statutory solution that is designed to add clarity and certainty in cases involving modern digital distribution methods, while recalibrating the maximum damages available according to different degrees of infringement. Such a system will hinder further increases in excessive awards against relatively innocent individuals. This solution is consistent with the Copyright Act's criminal treatment of infringers and Congress' prior enactments in this area. It also accords with the tripartite purpose of statutory damages and simultaneously addresses the major failures of the current approaches. First, it tackles these shortcomings by better satisfying the core purposes of protecting the copyright owner and discouraging willful infringement in the digital context by closing the "bulk discount" loophole, which encourages infringers to take multiple songs without the risk of incurring higher levels of damages. Second, this solution is narrowly tailored to meaningfully limit maximum penalties according to the nature of an end-user's infringement.