Monday, March 23, 2009

Obama Admin Supports Statutory Damages

(Photo: Gray Whale Succumbs to Exxon Valdez Oil Spill, Latoucha Island, Alaska (John Gaps III / AP)

As expected, though not as all had hoped, the Obama DOJ has weighed in on the side of supporting the constitutionality of statutory damages in the case of alleged downloaders and file sharers. Here's the CNET story by Declan McCullagh who does a great job of neutral and informed reporting on these things. Here's the view and plenty of links from the battling bloggers, Ray Beckerman (who has sought to file an amicus brief) and Ben Sheffner.

Here's the DOJ brief. While it's thoughtful and thorough in some respects, the very fact that is was even filed is bound to raise eyebrows. Two of the top officials in the DOJ appointed by Obama were formerly top private sector lawyers for the RIAA. Even if they had no dealings with the present filing, which I would hope and assume is the case, their former activities are are bound to be raised and have already been raised in the foregoing links.

One case that nobody seems to want to touch is last year's SCOTUS decision re Exxon Valdez, wherein punitive common law damages (NOT statutory minimum damages) were capped one to one with compensatory damages. Many thought that this was much too low under the circumstances (see above). Ironically, tomorrow is the 20th anniversary of the disaster. Here's the Exxon Valdez decision. Note the obiter dicta discussion at p. 38-39, which refers to treble damages in patent cases - and notes that the purpose of such damages is to encourage private enforcement.

In the Tenenbaum case, if one assumes that SONY's actual loss is some portion (say half) of the 70 cents it would have received from a $0.99 iTunes download, the $750 minimum under the statute is more than 2,000 times its actual loss for a lost sale to the defendant, assuming a lost sale. As to imputed value from "sharing", assuming that the case can be made out, there is probably no proof that there was any sharing with anyone other than the RIAA investigator. Should Joel be the lightning rod for millions of others? What level of minimum damages is necessary to encourage private enforcement, without crossing over into the criminal or otherwise unconstitutional realm, especially when millions of non-commercial individuals may be engaged in thousands of "infringing" acts each? While computers were not unknown in 1976 when these provisions were passed, these were then mainframe and other large scale computers not available to ordinary people. The concept of the internet, the celestial jukebox, and the possibility of litigation against thousands of individuals who have no commercial intent surely was not in Congress's mind even when it upped the ante to $150,000 per work from $100,000 in 1999 for those who "willfully" infringe, whatever that means. The amounts have gone up since 1976 but the concept hasn't changed from the mainframe days.

Here's a useful debate moderated by Doug Lichtman in which Charlie Nesson attempts to respond to Lichtman's pointed questions. The best comment is probably by Prof, Sharkey at about the 50 minutes mark.


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