Judgments Set at $1.5 Million in American Courts, BitTorrent Sharing Gets Costly

On December 10, 2012 by

It’s hard to know what to make of this.
Particularly in the Canadian context.

In the last two months courts in Delaware, Virginia and Illinois have awarded massive bittorrent penalties against three separate individuals who were found to have shared 10 or fewer movies via the bittorrent protocol.

In all three cases the defendants failed to appear in court leaving the judge no option but to deliver a guilty verdict. What surprises is the size of the award. $1.5 million in each case.

According to US Law, plaintiffs who can show willful copyright infringement may be entitled to damages up to $150,000 per work. Defendants who can show that they were “not aware and had no reason to believe” they were infringing copyright may have the damages reduced to $200 per work. In this case, the judges were clearly in no mood to be lenient and in each case, were sympathetic to the plaintiff’s assertions that the requested judgements were reasonable; ie:

“Plaintiff, Flava Works, Inc.’s request for an award of $1,500,000 is very reasonable given that Plaintiff’s copyrighted videos were downloaded — or infringed on – thousands of time by third parties … ”

and,

“$150,000 times 6,632 infringements is well over $1,500,000. Thus, Plaintiff, Flava Works, Inc.’s request for an award of $1,500,000 is very reasonable … ”

The fact that similar damages were awarded in three separate jurisdictions by three separate judges would indicate that they’re not outliers. And if not, the common perception that actual litigation for bittorrent sharing is unlikely, may be about to upended.

What was unique to the settlements was the ability for the plaintiff to track back the first illegal release of the files to the three individuals via a watermark in the file. This differs from the usual cases where “first release” isn’t attached to the defendant, a fact that may provide some comfort for Canadians targeted in the recent round of copyright enforcement initiatives out of Montreal.

Furthermore,  statutory damages are set much lower here than in the United States. Writing last week in the Toronto Star, Michael Geist suggested that the guidelines legislated in Bill C-11 will lead to moderate awards:

Rights holders (in Canada) can elect to pursue actual damages from copyright infringement instead of statutory damages, but those are likely to be even smaller in the case of a downloaded movie or song.  The net effect, as the government indicated in its advisory on the bill, is supposed to be that “Canadians will not face disproportionate penalties for minor infringements of copyright.”

Maybe.
Maybe not.

The American examples are clear indication that common knowledge doesn’t always play out as declared. The question not addressed by Geist is the issue of minor infringement and what that entails. While all would agree that the case of 1 downloaded movie is minor, the open question remains if the courts would view 5,000 uploads of that same movie in the same way. When does minor became major?

What we do know that in the US the courts are hearing bittorrent cases despite assertions to the contrary. And we do know that the courts are returning judgments in favour of the plaintiffs; sometimes massive judgements.  As per previous ink, what remains to be seen is how this translates north of the border.