Tuesday, January 02, 2007

RIAA owns Russia

$1.6 trillion in statutory damages. Well, it's possible. In one case, a Legg Mason employee subscribed to some stock picking reports, but shared them with others. Jury awarded $20 million. During trial, Legg Mason was quite arrogant, saying it could buy the tiny plaintiff with pocket change, and even if it subscribes the report for all the workers who read it, the cost would be only about $60K.

$60K actual damages and $20 million statutory damages, a multipler of 300. Normally, in civil cases, the multiplier should be less than 10 for punitive damages, as the U.S. Supreme Court ruled in a number of cases. So, $20 million does look excessive.

What Legg Mason didn't get is this: copyright infringement is stealing, it's pretty much a criminal act. There is substantial penalty for stealing stuff. Willful copyright infringement are criminal acts--it's just the FBI doesn't have the time to prosecute. Since nobody can be sent to jail in this case, the punishment is paying more money.

One may argue that the potential harm is larger than $60K, then the ratio will be less than 300. Also, since the plaintiff is financially vulnerable, a high punitive/actual ratio is justified. Basically, if the acts are close to criminal and the victim is weak, more severe punishment must be given.

What if the court awards $1.6 trillion and the defendants can't pay? BK may be an option. But, in case of willful infringement, the defendants can't even discharge the judgment via BK.

The catch is, US copyright laws don't apply in Russia -- unless infringement originated in US.

13 Comments:

Anonymous Anonymous said...

Since the US couts have no jurisdiction in Russia, and AllOFMP3 is in compliance with Russian law, the RIAA will get exactly nowhere with this.

The RIAA does nothing but steal from the artists the purport to represent (as can be seen by the recent request by the RIAA that artists royalties be lowered and theirs be raised) and should itself be sued.

1:55 PM, January 02, 2007  
Anonymous Anonymous said...

"What if the court awards $1.6 trillion and the defendants can't pay?"

Yes, what would it mean? I tell you: nothing. Do you know what does the last A mean in RIAA? Since when do US laws work in Russia? US has tried to do something similar with Piratebay and failed miserably.

3:09 PM, January 02, 2007  
Blogger Sharikou, Ph. D said...

Since when do US laws work in Russia?

If the Russian company sells mp3 to Americans, then American courts will have personal jurisdiction over the Russian company. It's something called minium contacts jurisdiction. Copyright also applies because direct infringement happened in US.

Of course, it would take a war to enforce judgment.

4:25 PM, January 02, 2007  
Anonymous Anonymous said...

That's simple global market. To sell at any price any item everywhere is a globalization's consequence. Globalization don't means conquering the world imposing US laws planet-wise. What about tons of copyrights infringements in China or other East or Asian Countries? Uh, perhaps the China or other bone is too chewy for US theet...

11:23 PM, January 02, 2007  
Anonymous Anonymous said...

Old news, the RIAA is always saying they are trying to take down AllOfMp3 as its so cheap, but never goes anywhere. As the report says, its all spin so that each time more bloggers will keep posting the crap they come out with.

5:42 PM, January 03, 2007  
Blogger Sharikou, Ph. D said...

As the report says, its all spin so that each time more bloggers will keep posting the crap they come out with.


RIAA is serious business. Npaster was sued into BK. Grokster was also sued into BK -- and paid $50 million.

The defense lawyers in both cases fought very hard, but failed.

9:14 PM, January 03, 2007  
Anonymous Anonymous said...

America is a culture of unharmed victims.

Whether it be MP3's or personal injuries, why does it seem like people in the US seek to exploit every opportunity for finanical benefit at any sort of perceived infraction?

Compensation (read: cash) for injuries or losses has escalated far beyond the ridiculous. Courts no longer need to be provided any real statement of loss of income, they just dish out settlements of arbitrary wads of money.

In other words, there is no proof required to show exactly how much money was lost to artists when their music was downloaded for free (or close to it).

If hard evidence of actual loss instead of evidence of guilt was required, guess what? Lawyers across the country would lose millions in lost fees. Yes, those same lawyers that grow up to be judges and policy makers.


What's worse, American lawyers feel that their cash-grabbing fists should extend beyond the borders of the US. They feel entitled to apply American law to transactions that take place outside their borders because the 'victim' reside in the US. Nevermind that these same lawyers feel their laws are correct to begin with.

Tell you what, every damned pathetic music artist should sign a waiver before they cut their first albums stating that they acknowledge their music will potentially be 'stolen', and that any money that comes in legally for their albums should be considered a God-send and that instead of trying to cash in on music sales, they should instead bank on live performances.

That would eliminate so many problems - namely shitty music and trivial lawsuits.

8:05 AM, January 04, 2007  
Blogger Sharikou, Ph. D said...

Courts no longer need to be provided any real statement of loss of income, they just dish out settlements of arbitrary wads of money.


Actually, U.S Supreme Court has repeatedly ruled that punitive damages should be less than 10X of actual damage. In BMW v Gore, the plaintiff bought a car which was repainted, actual damages was $4K, punitive was millions, the high court reversed it. In a State Farm case, the punitive damages was a whopping $100 million. Both cases were not very strong.

I think RIAA has some difficulty here, it has to show 10 million copyright registrations, which is no small feat.

I think the idea of punitive damage is very good, in ancient times, if someone wronged someone else, the victim can legally counter attack with physical force. Today, we don't do that any more, when we caught thieves stealing copyrighted stufff, we don't cut off their hands. we seek money.

11:18 AM, January 04, 2007  
Anonymous Anonymous said...

I think the idea of punitive damage is very good, in ancient times, if someone wronged someone else, the victim can legally counter attack with physical force. Today, we don't do that any more, when we caught thieves stealing copyrighted stufff, we don't cut off their hands. we seek money.

Right, that's what separates us from animals. Mind you, this doesn't apply everywhere in the world (Saudi Arabia is one of a long list that still dollop our corporate punishment for minor crimes).

Surprisingly, personal violations in these countries are quite low. Not that I have sources to cite, just personal anecdotal evidence. People that visit countries that dish out physical punishment often state they felt much more secure in these countries than in their home country.

The point is, economic punishment is hardly discouraging when something such as MP3 copying is so easy and lucrative.

You either change the punishment, which may or may not discourage criminal activity, or you can make the crime less lucrative.

Here is the solution:

The whole music industry would make more money if it devalued its products (allowed free access to music for everyone), and increased the value of its services in the form of live appearances (which can't be duplicated).

Music shared freely would increase the popularity of some music, therby the performers could drive up their concert ticket prices and make far more money. The RIAA could be disposed of, and people could live without worry about copying music.

Movies could be freely distributed, theatres could drop their ticket prices and make a ton of money for the producers and themselves from garnering full houses. And DVD sales will always exist (even if the movies themselves are freely distributed) with value additions to the DVD package. Not to mention any paraphenelia sales would increase with freely available movies.

Instead of making people criminals there are a lot more simpler economical beneficial alternatives to the war on copyright violation.

12:47 PM, January 04, 2007  
Anonymous Anonymous said...

http://arstechnica.com/news.ars/post/20070103-8536.html

...it would seem the $150,000 per song the RIAA wants is just yet another RIAA money grab. It'll be hilarious (ironic?)if their attempt to sue folks ends up forcing them into revealing pricing data and some of their shady practices and leads to action against them.

12:50 AM, January 05, 2007  
Blogger Sharikou, Ph. D said...

It'll be hilarious (ironic?)if their attempt to sue folks ends up forcing them into revealing pricing data and some of their shady practices and leads to action against them.


I analysed this long time ago. The strategy won't help the p2p user. 70 cents might the price for downloading a song, but to distribute a song (which the p2p user did), the license fee will be very high.

$150K per song is the right price for infringement.

12:55 AM, January 05, 2007  
Anonymous Anonymous said...

I'd say fighting with Russia is the least of the problems for RIAA once it has to face the Senate.

3:26 AM, January 05, 2007  
Anonymous Anonymous said...

"70 cents might the price for downloading a song"

"$150K per song is the right price for infringement."

So that would mean every P2P user should upload the song to about 215k other users. What is the correct price for sharing $300 Vista or $3000 Corel over P2P? A billion perhaps?

3:31 AM, January 05, 2007  

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