Shouldn't There Be Significant Punishment For Bogus Copyright Claims That Kill Companies?

from the seems-like-it dept

We wrote a detailed post about the latest Veoh ruling, in which Universal Music lost (again) in claiming that Veoh violated copyright law with its YouTube-like service. Of course, as we pointed out, the "victory" for Veoh is pretty meaningless because Veoh is dead. The cost of the lawsuit itself killed it. I've been thinking about this a lot lately, when you see stories like the federal government shutting down Dajaz1 for over a year, without having an actual case for infringement, and the similar case in Japan, in which the developer of a software program, Winny, had to battle in courts for more than five years, before the court declared that he was totally innocent.

The harm done to legitimate businesses by totally bogus copyright claims seems like it should be a big deal. If the government is really concerned about jobs, rather than passing something like SOPA, shouldn't it be ramping up the punishment for bogus copyright claims that cause so much real harm to businesses? Eric Goldman, in discussing the Veoh ruling makes a similar point and puts forth an interesting suggestion for SOPA, to force companies filing such claims to put up a bond to pay, if they turn out to be wrong:

A partial fix to SOPA/PROTECT-IP would make rightsowners bear the cost of their overclaiming. Make them put up a $1 billion bond for the privilege of sending cutoff notices; and pay liberally out of that bond if the rightsowners get the law or facts wrong. Write checks to the investors and employees whose economic expectations are disrupted when rightsowners get it wrong. Write checks to the payment service providers and ad networks who turn down money from legally legit businesses based solely on rightsowner accusations. Heck, write checks to the users of those legit services who are treated as inconsequential pawns in this chess match. Sure, a $1B bond obligation with liberal payouts would turn cutoff notices into a sport of kings that only the richest rightsowners could afford, but perhaps that’s the way it should be. A rightsowner's decision to send a cutoff notice should be a Big Deal, the equivalent of going to Defcon 5, and not like sending holiday cards to distant relatives you last saw at Ethan's bar mitzvah.

The supporters of the bill, of course, would reject such a suggestion out of hand, noting that it would be unfair and would make it harder for them to "enforce their rights." But that ignores the other side of the equation. If enforcing their rights involves completely destroying someone else's company, then, as Goldman notes, shouldn't it be difficult?

Of course, the chances of this happening are nil. During the SOPA markup, Rep. Jason Chaffetz actually put forth an amendment that didn't even go as far as Goldman's suggestion. It merely said that if you file a lawsuit under SOPA and it turns out that the site was legal, then the plaintiff should pay the legal fees of the defendant. This seems quite reasonable. And it was quickly shot down by SOPA supporters who complained that this was somehow unfair. I still can't figure out why only the copyright holders get to talk about "fairness," while the companies and websites completely destroyed by bogus claims apparently have no "fairness" on their behalf.

Filed Under: copyright, dmca, pipa, protect ip, punishment, sopa, takedowns
Companies: dajaz1, universal music, veoh, viacom, winny, youtube