China Increases The Fines For Copyright Infringement

from the now-watch-who-it's-used-against dept

For years, we've discussed how the US has put all sorts of pressure on China to boost its intellectual property enforcement regime -- and each time we warn that this is going to backfire in a big, bad way. To "appease" the US, China keeps ratcheting up its enforcement... but seems to have a habit of doing so in ways that hurt foreign companies. And, even though China declared its supposed copyright crackdown a "success," under increasing pressure to change its IP laws, China has announced plans to double the "fines" for infringement up to 1 million yuan (~$158,000). That seems perfectly in line with the ridiculous statutory rates currently found in the US, but seems even more out of place in China where the average citizen makes a lot less than the average American. Not that there's likely to be much of an effort to use such a law, but laws like these don't get people to respect copyright more. They do the opposite. When the penalties are so out of proportion to the action, no one takes the law seriously.

Filed Under: china, enforcement, fines, statutory rates

Judge In Limewire Case Wants To Explore How Much File Sharing Really Costs Record Labels

from the this-could-be-interesting... dept

With Limewire officially shutting down following its (totally expected) legal loss earlier this year, you might have though the case was totally over. However, the record labels quickly claimed that with the loss, Limewire should have to pay a billion dollars, which seemed a bit extreme. In typical RIAA fashion, the labels didn't feel like they should have to prove any damages at all, but that the judge should just order statutory rates. However, Limewire asked the judge to have the record labels actually prove their losses -- and, somewhat stunningly -- it appears the judge has agreed, despite the record labels' claim that trying to prove damages would represent a "crushing burden":

On Tuesday, Judge Freeman said tough noogies, with some interesting language written in the margins of a court-endorsed memo to the parties. She scribbled -- barely legible -- that Lime Wire should enjoy enough discovery to mount a defense on the damages issue. Both Lime Wire and the labels must pick 100 works -- 80 songs and 20 albums -- that each believes to be representative of the damage (real or not) that file-sharing has on the record companies. In addition, 100 more works -- another 80 songs and 20 albums -- will be selected at random.

It's not entirely clear, from there, how each side will go about showing damages, but it is interesting that the plan seems to be to look for empirical evidence to determine actual damages. I'm really surprised by this -- since my understanding was that with statutory rates, the whole idea was that the copyright holder never had to bother proving any actual damage (something I disagree with -- but it's what I thought the law said...). Either way, it certainly would be nice if there were some reasonable data to work with, so this should be worth following.

Filed Under: copyright, damages, file sharing, statutory rates
Companies: limewire, riaa

Why Ridiculous Statutory Rates For File Sharing Are Inappropriate

from the that's-not-what-statutory-rates-are-for dept

While I definitely disagree with how Charlie Nesson conducted Joel Tenenbaum's defense in his file sharing case, Nesson has been posting some rather interesting posts on his blog lately, including his recent post highlighting the history of statutory awards for copyright infringement, as written by Pamela Samuelson and Tara Wheatland. While he (oddly) does not say where the writeup is from, you can find the full 2009 paper if you'd like.

We had already been discussing how the juries came up with their ridiculously high awards in the various Jammie Thomas trials, and one of our commenters (a lawyer, of course) insisted that the high rates were necessary to act as a deterrent, and even insisted this was the point of statutory rates. Except, as the history shows, that is not true at all. Statutory rates were designed to only apply when actual damages could not reasonably be assessed, and were mainly supposed to be about compensation, not deterrence:

Cases interpreting this new provision articulated its purpose as granting fair compensation to copyright owners when "the rules of law render difficult or impossible proof of damages or discovery of profits." In keeping with this purpose, some courts refused to order defendants to pay statutory damages when actual damages or profits could be proven. Indeed, the Supreme Court held that the 1909 Act's statutory damage provision was inapplicable when damages and profits were proven. If a successful plaintiff had suffered only nominal or no damage, the minimum of $ 250 might be awarded, but no more, in keeping with the policy that statutory damages should not be a penalty. Courts sometimes also refused to impose any statutory damages when the evidence showed no harm to the copyright owner and no profits to the infringer. In keeping with the no-penalty rule, appellate courts sometimes reduced large statutory damage awards to the minimum in close, although ultimately unsuccessful, fair use cases. Occasionally, appellate courts reduced statutory damage awards that were excessive in relation to approximate damages or profits.

We base our conclusion that statutory damages under the 1909 Act were mainly compensatory in purpose on several factors. First, the structure of § 101(b) identifies actual damages and defendant’s profits as the primary remedies for infringement, and statutory damages as an "in lieu" remedy. Second, the legislative history of the 1909 Act, as well as the case law interpreting it, view the primary impetus for adopting statutory damages as providing some relief when damages and/or profits are difficult to prove. Third, in addition to providing a range within which statutory damage awards should be made and setting a cap to prevent excessive awards, § 101(b) proffered guidelines for what Congress considered to be reasonable damages for various types of works. Fourth, the case law interpreting the 1909 Act's statutory damage provision generally focused on its compensatory function and respected the "no penalty" direction. This is not to say that statutory damage awards under the 1909 Act lacked deterrent purposes and functions. By setting a floor of $ 250 and giving courts discretion to award up to $ 5,000, Congress surely intended to deter infringement, but the compensatory impulse was most evident in the law as applied.

Useful historical context for those who insist that a fine of $62,500 for sharing a single song for totally non-profit reasons is somehow what the law actually intended.

Filed Under: copyright, statutory rates