Ridiculous Statutory Damages Rules Mean Judge Regretfully Awards $3.6 Million For Circumvention Of DRM

from the totally-out-of-touch-with-reality dept

Eric Goldman points us to yet another example of ridiculous statutory damages rules around copyright creating awards in court cases that have no connection to any real harm. And, this time, it involves the violation of the highly questionable (and controversial) anti-circumvention clause of the DMCA. The case involves an online game, MapleStory, and some people who set up an alternate server, UMaple, allowing users to play the game with the official game client, but without logging into the official MapleStory servers. This kind of thing happens all the time.

In this case, the people behind UMaple apparently ignored the lawsuit, leading to a default judgment. However, even there, it appears that MapleStory went too far, and the judge is clearly annoyed with them at times. Even though judges often side entirely with winners in default judgments, in this case, the judge repeatedly expresses skepticism about arguments made for determining "damages" to be awarded. Thus on most of the claims, the judge seems to look for ways to avoid giving MapleStory much, if any, money. For example, in determining profits made by UMaple, the judge repeatedly knocks MapleStory for failing to show what profits were specific to UMaple's infringement, telling it that it can't just assume all money made by UMaple belongs to MapleStory. So the judge dumps a request for $68,764.23 in profits made by UMaple down to just $398.98.

But... then we get to the anti-circumvention stuff. Here, the ridiculous statutory rates set a minimum of $200 per infringement. Multiply that by 17,938 users of UMaple... and you get $3.6 million. MapleStory, of course, asked for the statutory maximum of $44,845,000, which the court refuses to grant. In fact, the judge chides MapleStory for its request for the maximum -- even to the point of noting that the arguments by MapleStory make it "question very seriously whether Plaintiff intended to actively mislead the Court or whether these oversights were merely the result of poor legal research."

The court then notes that the minimum statutory amount -- the $3.6 million -- is already "a significant windfall to Plaintiff far in excess of any amount necessary to deter future infringing conduct," and also that the "award here likely bears little plausible relationship to Plaintiff’s actual damages." In fact, it sounds like the court would very much like to decrease the amount, but notes that "nevertheless, the court is powerless to deviate from the DMCA's statutory minimum."

As Goldman says, this is "guffaw-inducing", because the minimum award seems to have no bearing on the actual seriousness of the infringement. As he points out:
this case does provide an excellent example of the ridiculousness of anti-circumvention statutory damages. $3.4M can't be the right damages award in this case, and it's so guffaw-inducing that it further erodes the legitimacy of our copyright rules.
Indeed. And yet no one seems interested in exploring just how disconnected statutory damages are from reality.

Filed Under: anti-circumvention, damages, dmca, eric goldman, maplestory, umaple

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  1. icon
    Zem (profile), 18 Apr 2012 @ 7:56pm

    The unpleasant truth

    What most people do not realise, this type of default judgement, with large minimum awards, actually encourages DRM circumvention.

    How so? Lets just put aside the whole is it right / wrong argument to start with.

    As it stands right now, the financial impact of a small infringement is of such magnitude that it is for all intensive purposes, no different from a massive infringement.

    So, if you are intending to infringe, infringe BIG.

    Secondly, when any judgement, uncontested or not, involves that large a sum of money, there are realy only 2 outcomes. The first is all the assests are overseas and can not be touched by the US court system. The second is it goes to appeal and gets tied up in the courts for several years.

    So, if you are intending to infringe, infringe BIG.

    But it is a detterent I here you say. Not realy, if it was we wouldnt keep hearing about these kind of cases.

    All these type of laws do is encourage the very thing they are trying to prevent, provide great fodder for blogs sites, and give plaintiffs flase hope of riches that will never appear.

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