Funny How Universal Music Thinks Infringement Fines Are Unconstitutional When It's On The Receiving End

from the and-how-does-that-work? dept

Wed, May 14th 2008 6:51am — Mike Masnick

You may recall Bridgeport Music as a company that claims to own the rights to various musical compositions and has a long history of suing anyone who samples even the tiniest bits of that music. The worst part is that there are very serious questions concerning whether or not it really has the rights to much of the music it claims to control. George Clinton, for example, claims that Bridgeport used forged signatures to get control over his catalog. A recent Bridgeport case may be interesting for a different reason, though -- one that shows how the record labels have no problem contradicting themselves when on the receiving end of a copyright infringement lawsuit.

The lawsuit involved Univeral Music, who lost the original decision and was hit with a rather large fine. Universal Music appealed that decision on a variety of points -- and appears to have convinced the judge that the punitive damages tacked onto the copyright infringement claims were unconstitutional. This is quite interesting because, as Ray Beckerman notes in that link, Universal Music is involved in a bunch of lawsuits where it's pushing for extremely high fines for individuals found guilty of infringement. In fact, Universal Music is actually on the receiving end of a lawsuit that accuses the company of requesting unconstitutionally high fines. In that case, Universal Music is asking for fines that are more than 1,000x the actual damages. Pretty high, right? So what were the damages that Universal Music (and the court) found so unconstitutionally high in this case from Bridgeport? Turns out they were about 10x the actual damages. Funny how that works.

It seems like Universal Music may come to regret pointing out the variety of reasons (pdf) why punitive damages can be seen as unconstitutional, as one would imagine that UMG's own filing will be raised against it in its own copyright infringement suits:

"While the Supreme Court has declined to adopt concrete or bright-line constitutional limits for the ratio between actual or potential harm and a punitive-damage award, the Court nonetheless observed that, "in practice, few awards exceeding a singled-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process."... The court cited a 4-to-1 ratio as being close to the line of unconstitutional impropriety."

Universal Music would likely claim in its own defense that it was complaining about punitive damages, and in the other lawsuits it's fighting for statutory damages, but there are already plenty of folks pointing out that there really isn't much of a difference in many cases.

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Filed Under: constitution, copyright, damages, infringement, punitive damages, statutory damages
Companies: bridgeport, universal music

13 Comments

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eleete, 14 May 2008 @ 7:10am

Not much funny about that.
When will the courts recognize that as more and more content is created, this is going to be the result. People pulling the law in both directions as it sees fit. When Joe Littleguy is in his basement downloading a couple songs and gets hit with a $750,000 judgment, they shout victory. When they get hit with the same lawsuit they cry unconstitutional. Only the lawyers can be happy with this arrangement. I see at as a frivolous waste of court time to handle all the bickering back and forth. Free the content and we all gain. That Simple. I also find it amusing to have such a hazy definition of fair use. There's really nothing fair about it.

eleete
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Overcast, 14 May 2008 @ 7:33am

hahah, they can sure dish it out - but not take it, huh?

Can I copyright Middle C - and each time it's used - sue?
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- interval, 14 May 2008 @ 9:45am
  
  Re:
  There's no other reason that large private organizations pursue legal remedies such as this other than they try everything to see what sticks. They have deep pockets so they can use the scattergun approach in order to win as much as possible. I think a lot of news breaking legal maneuvering is simply the result of the RIAA (or pick your mindless corporation) electing to cast as wide a legal net as possible in order to gain as much as possible. I think if you had a conversation with any one corporate executive he'd say that "Yes, what we're doing looks stupid.", but what looks stupid is simply the result of proper, or knee-jerk, due-diligent, response to perceived legal threats.
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Daily Nonsense, 14 May 2008 @ 7:44am

Ohhhhhhhhhh
I like it! Sounds like they just shot themselves in the balls. I can't wait for the next time they actually win a case and the defendant uses this argument to knock the fine down to a buck a song or something.

Sweet justice will prevail.
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Dan, 14 May 2008 @ 8:01am

This case seems like excellent grounds for the one trial to be appealed, as that was far greater than a 10 to 1 ratio
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Anonymous Coward, 14 May 2008 @ 8:11am

These are the real terrorist in America, They should not be treated any better than any others - Taken out back and shot! They are killing America so it is Justice!
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Cyrus, 14 May 2008 @ 8:29am

Context is somewhat important
Reading through the link provided, there is some context to keep in mind. UMG is arguing that it wasn't intentionally done on their part. Instead, they claimed that,

"Defendants, at most, were negligent in re-releasing the album."

This is part of their claim as to why a 10:1 ratio was unconstitutional. However, this type of argument would seem to produce a bit of a snag for them in future lawsuits they bring up. By claiming negligence as grounds for lowering they damages owed (as well as the 4:1 noted by the Supreme Court), they open the door for future people that they sue to do the same.

For example, it is certainly conceivable for a person to rip music to their computer to the common music folder. It wouldn't be unreasonable to think that certain file sharing programs would search that directory for files to share (this is probably the default behavior for quite a few of them). This would mean that future defendants could claim that, at best, they were negligent in their copyright infringement (and potentially legitimately so), and that the damages owed should not exceed the 4:1 ratio.

While the context makes more sense as to why UMG claimed 10:1 was unfair, similar situations could arise in which they are suing, and the defendant could utilize the same argument against them.
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f2point8, 14 May 2008 @ 9:19am

Busy work
It's just lawyers keeping busy by doing what those kinds of lawyers do which is keeping busy by doing what those kinds of lawyers do which is keeping busy by doing what those kinds of lawyers do which is...
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Ray Beckerman, 14 May 2008 @ 9:25am

Another good law review article
Another good law review article on the subject of the due process analysis of statutory damages is "Grossly Excessive Penalties in the Battle Against Illegal File-Sharing: The Troubling Effects of Aggregating Minimum Statutory Damages for Copyright Infringement", by J. Cam Barker, published in Texas Law Review, 2004.
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wasnt me, 14 May 2008 @ 9:28am

if universal manages to pull this off and gets a judgment in its favor: "Infringement Fines Are Unconstitu[u]t[/u]ional"

doesn't that create a precedent that will allow every1 else to do so... (in that case lets hope they do win)

P.S. you have a T missing in your title its Unconstitutional not Unconstituional
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Anonymous Coward, 14 May 2008 @ 5:16pm

Pot, meet Kettle
Oh the hypocrisy !

The left hand knows not what the right hand does....
Even if these are two different legal departments using two different legal teams, you would think that someone at the top would have responsibility over both and realize that they will look really silly - or maybe they just do not care and are laughing about it.
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Mr Big Content, 15 May 2008 @ 2:05am

Shameless Commie Propaganda
How can you compare the two cases!? On the one hand is a big, important company, one of the pillars of Western Capitalism. And on the other hand you've got some no-hope loser nobody that no-one would have heard of.

Anything that could weaken an outfit as powerful as UMG is a threat to everything that's Good and Wonderful in the World. While those no-good file-sharing stealers deserve everything that's coming to them, and more--they should be strung up and their heads served on a plate to our shareholders!

Honestly, to say that the same law that applies to respectable, successful companies should also apply to no-name hoi polloi is just ... unUSian.
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Killer_Tofu (profile), 15 May 2008 @ 6:38am

Re Main Article
Ahh this is beautiful, it really is.
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