US Hypocrisy: Pushing For Maximum Damages For Infringement, While Settling Its Own Piracy Bill For Less

from the but-of-course dept

You may have seen the story over the weekend that the US government had settled a copyright infringement lawsuit filed against it by Apptricity for $50 million. Basically, the Army licensed Apptricity’s server and device software for $4.5 million in 2004, but with a limited number of licenses — which worked out to $1.35 million per server and $5,000 per device. The Army completely blew through the limit and installed it on another 100 servers and 9,000 devices (the government then tried to hide this from Apptricity). Apptricity noted that, at the existing deal’s terms, the Army would have owed it an additional $225 million. The government, of course, settled for $50 million, leading some to note that it appears that by infringing, the government effectively got a 73% discount. Not bad — though that does assume that the government would have licensed the same number (and that there wouldn’t have been some sort of bulk discount).

That said, what strikes me about this is that at the very same time that the Army was ignoring all of this and clearly infringing on the terms of its license, the US government has been pushing a zero tolerance approach to copyright infringement both at home and around the globe. You have Homeland Security and the Justice Department both ramping up prosecutions of intellectual property violations. You have the US State Department going around the globe pushing for stricter and stricter enforcement. And, of course, you have the USTR trying to negotiate draconian criminal penalties into international agreements for copyright infringement.

Hell, if we count each excess installation as a separation copyright violation (and, for what it’s worth, there’s a reasonable argument that under copyright law multiple installations of the same file only counts as a single violation, rather than multiple — but the DOJ itself has argued that each copy should count as an individual infringement), and then multiply by the $150,000 that’s the top of the line for statutory damages for willful infringement (which this appears to be), the government would have had to pay somewhere around $1.4 billion. And, again, the DOJ itself has regularly argued in court that $150,000 per infringement is perfectly reasonable.

And yet, here, when the US government itself has to pay up, suddenly it gets to do so at a great discount? And this won’t change a damn thing in how the rest of the government goes around the globe pushing for extreme punishment for infringement, insisting super high statutory rates are needed to “teach a lesson.” Apparently, though, it’s a lesson that doesn’t apply to the US government itself.

This is part of what’s so ridiculous with statutory damages. Copyright holders and maximalist defenders insist they’re reasonable… until they realize that they’re also infringers. And then suddenly they think it’s reasonable for a much, much, much lower number. What a bunch of hypocrites.

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Companies: apptricity

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Comments on “US Hypocrisy: Pushing For Maximum Damages For Infringement, While Settling Its Own Piracy Bill For Less”

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38 Comments
Anonymous Coward says:

Why pay anything?

The copyright monopoly is created by the government.

Why should the taxypayers pay to license stuff from the copyright holder? It should be the other way around?the copyright holder pays the treasury for the privilege of the monopoly.

The scope of the copyright monopoly should be limited to permit free use by the grantor of the monopoly: that is, free use of copyrighted material by the government for governmental purposes.

The army is generally a governmental purpose.

MrWilson says:

Re: Why pay anything?

“The scope of the copyright monopoly should be limited to permit free use by the grantor of the monopoly: that is, free use of copyrighted material by the government for governmental purposes.”

The public is the grantor of the monopoly. The government is just the nominal representative of the public. You’re inadvertently talking about copyright abolition.

Anonymous Coward says:

Re: Re: Why pay anything?

free use of copyrighted material by the government for governmental purposes

? You’re inadvertently talking about copyright abolition.

The general rule is that monopolies ought to be abolished whenever they prove inconvenient to the public interest.

But the government’s exercise of its right to make copies of a work for governmental purposes is in no way a complete abolishment of the monopoly. It does not affect statutory limitations on making copies for non-governmental purposes.

MrWilson says:

Re: Re: Re: Why pay anything?

“The general rule is that monopolies ought to be abolished whenever they prove inconvenient to the public interest.”

This is clearly not a rule anyone follows because copyright in its current state and longevity has proven inconvenient (and even constitutionally unsound) to the public interest.

jameshogg says:

If you think it stops here, it doesn’t.

There is a very, very high probability that several corporations, government agencies, etc are benefiting from all kinds of pirated software. This is only to be expected since trying to police copyright infringement is next to impossible – the urge for corruption becomes too great. It would make for a great story if you were an investigative journalist.

We need to step back and see the nature of the delusion for what it is: a philosophy that enables free-riders to benefit from working-class creators by waiting for them to invest all their fruits of labour and create, and then steal without paying dues without any practical punishment. And all of this is somehow considered better than setting up an assurance contract system that would make it a condition for corporations and states to put their fair shares into the hats of the creators if they wish to get what they want. And if they try to cheat, even a few, nobody gets anything. “Mutually Assured Destruction” is a good metaphor for this.

Copyright is anti intellectual property, not pro. Never forget it. And start supporting something that will really protect the life, liberty and property of creators. Crowdfunding trumps everything. Copyright enables pirates to steal such as the U.S. military and, most likely, other powers.

Anonymous Coward says:

a) it’s only the maximum possible when it’s against ordinary people, who the industries know full well will never ever be able to pay just a fraction of the fine and will have the rest of their life completely ruined, just because it can be
b)’dont do what i do, do what i say’ is the usual hypocrites saying.

it’s certainly true in these cases. i am, however, waiting to hear what bullshit and bollocks excuses are used particularly by the DoJ! they are the biggest, two-faced bunch of arse holes going!!

Anonymous Coward says:

Re: Re:

lawsuit settlements are taxable

In the late 1500s, when Queen Elizabeth I was handing out monopolies left and right, she at least had the sense to get a sizable kickback for every monopoly she granted.

The T-shirt should say, ?The government handed out a multi-million dollar monopoly, and then threw in $30 million of taxpayer cash as a sweetener.?

DerekCurrie (profile) says:

Go to the Source: Our Corporate Oligarchy

I consistently find it more useful to go to the source of any problem. In this case, it’s our Corporate Oligarchy, not the government. Consider how the corps thinks about whatever they’re mandating/puppetting our government to do. It is convenient for the corps to let the government be the buffer zone that gets all the citizen slap back. Meanwhile, it is far easier to consider such problems if you try to think like the source actor, how they view the situation. After all, the corp’s lobbyists are typically WRITING the bills for Congress, pushing out the public propaganda for their current campaigns, tossing money at the puppet government along with their mandates, and so on.

For example, it is incredibly easy to comprehend why Congress tried to cram SOPA/PIPA, ACTA/PIPA and CISPA down our throats. They were told to by our Corporate Oligarchy for the corp’s specific benefit, versus those of actual citizen voters, who are supposed to be running the government.

Anonymous Coward says:

Re: Re: Go to the Source: Our Corporate Oligarchy

Are we talking Schroedinger’s cat here?

According to the relational theory the politicians are either government officials or company officials, but the only people who know for sure when the transition happens is the politician. When everything is revealed, you will know too, what he is at that moment, but not how long ago he made the transition…

The breakdown of the superposition is, however, questionable under current conditions. If you never learn about the true situation of the politician, I can see why you would use the Copenhagen interpretation and call it a mess.

Oblate (profile) says:

Why did they settle?

I’m surprised that they would settle on an infringement of this magnitude. The numbers work out to an original order of 3 servers and 90 devices. The army then installed it on 100 servers (33x what they ordered) and 9000 devices (100x what they ordered).

How can there be such a huge disparity between what they ordered and what they needed? It almost seems like the infringement was planned ahead of time. Would this count as willful infringement?

Anonymous Coward says:

The specific instance of the USG using an app in excess of licensed seats is hardly hypocrisy. Situations such as this arise in all areas with great frequency, and in many of those situations such use is easily traced back to the existence of a license agreement that is unknown to end users who are not at all privy to the license agreement (oftentimes the result, as here, of worksites far removed from the location of the contracting entity).

I would agree hypocrisy may be an apt description if upon learning of what had transpired the party exceeding the terms of the license said, in essence, “Pound sand…so sue me”. That is not, however, what happened here. The USG quickly issued a mea culpa and entered into negotiations to rectify the situation. Trying to use the negotiation and payment of a reduced per seat fee is disingenuous for several reasons, not the least of which is that fees are typically calculated in business licenses on a sliding scale, and the resulting amount ($50M) may be representative of such a sliding scale, not to mention that a company does not typically go out of its way to take financial advantage of its largest business customer, one who is a current customer and will certainly continue as such into the future.

As a purely legal matter, you are undoubtedly aware that legal liability by the USG is governed by 28 USC 1498, which codifies what a copyright owner must do to secure reasonable and entire compensation for the taking of its property by the USG. This can be an excruciatingly long process, so the rapidity by which this matter was resolved should be a welcome approach.

BTW, I have seen situations such as this arise several times in the context of USG licensing and use of commercial software. In all such situations a mea culpa was immediately forthcoming, negotiations quickly undertaken, and resolutions promptly achieved to the mutual satisfaction of all.

Just Sayin' says:

bad math makes bad stories

Mike, if you are going to try to create outrage, at least consider the reasonableness of your claims.

You really have to consider the pricing of licenses beyond initial seats in software. A server license for one or two servers (because it couldn’t have been many more than that inside the original price) might be different from a licensing price for 100 servers. Huge discounts on bulk installations is NOT unreasonable or unheard of in the field. The price for the initial small install base does not mean that the price would apply across multiple installs, especially if the supplier doesn’t have to do any work for each install.

Did you miss the volume pricing model in class?

If you want to play “caught you!” politics, at least try to sound reasonable. Flying off with the maximum possible price makes you sound as shrill and unbending as the **AA types.

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