There are statutory damages on top of your actual damages. $50k per act of infringement. No reason for the copyright holder to settle for less when it's an open and shut case.
> Further, most jurisdictions have exceptions for short extracts of a larger copyrighted work (e.g. quotes from a book), which may apply to Copilot.
Quotes do not automatically get an exception just because they're taken from a larger work, they might be excepted either because they were de minimis (essentially because they were too short to be copyrightable) or because they were fair use (which is a complex question that takes into account the purpose and context, which Copilot is very unlikely to satisfy because it's not quoting other code for the purpose of saying something about it).
> Where do we draw the line?
Circuit specific; some but not all circuits use the AFC test. It sounds like this code was both long enough and creative/innovative enough to be well on the wrong side of it though.
As I understand it, the complainant may CHOOSE to request the court to levy statutory damages rather than actual damages at any point, but is not entitled to both actual AND statutory (17 U.S. Code § 504)
It also seems to be absolutely capped at 30K per infringement, not 50, and ranges up from $750. It also seems that if 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."
I think you are probably right that this specific function is copyrightable though, but taken overall, I think Microsoft's lawyers have probably concluded that they would win any challenge on this. Microsoft have lost court battles before though, so who knows?