Thursday 24 March 2011

"Absurd" Limewire Damages Rejected

Following on Ben’s post earlier about the closure of Limewire and its effect on illegal filesharing, a note about the damages ruling recently issued by the judge in the Limewire case, judge Kimba Wood of Manhattan federal district court. Judge Wood rejected the plaintiff record companies’ demanded damages, as reported here. The plaintiffs’ damages request would have reached as high as $75 trillion under their theory of statutory recovery for copyright infringement. Judge Wood noted that this amount is "absurd" and is “more money than the entire music recording industry has made since Edison's invention of the phonograph in 1877.” Rather than assess damages for each instance of infringement, as requested by the plaintiffs, she limited damages to one damage award per infringed work.

While her reasoning makes practical sense in consideration of the fact that the astronomical damages sought by the plaintiffs could not possibly be satisfied by defendant payouts, it nonetheless creates a situation where plaintiffs winning infringement claims on a “smaller” level are able to maximize their damages with damage awards for each instance of infringement, but plaintiffs whose works have been infringed countless times by a defendant are limited in their recovery to prevent “absurd” damages. Is such a result fair or does it dilute the deterrent factor intended by the availability of statutory damages?


Francis Davey said...

A non-linear approach to damages intended to have a deterrent effect might be entirely rational. The marginal gain in deterrence of an additional dollar may well fall off after some point turning point at high value.

This is the usual approach of criminal courts who do not - in England at least - simply multiply each offence by a suitable punishment, so that 11 counts of theft will result in a prison sentence 11 times longer than a single count. So it is a very respectable approach in punitive theory.

I'm not sure how much authority in the US there is for what the purpose of statutory damages is - and therefore the best way to serve that purpose. I'd be interested if anyone could point me to some authority.

Doug said...

Some concept of the *actual* damages incurred might be a useful contribution.

In the case of Limewire, I'd be really interested to see how much more money the record industry make over the next six months now it's been shut down - it would not surprise me in the least if it transpired that the industry had incurred no loss whatsoever.