Winning But Losing: Lessons From An Internet StartUp

from the the-deck-is-stacked dept

"Justice prevails" is often declared when a court case ends, honoring a system that produces the right result. Right, however, is not always just. The judicial system needs to address the exorbitant costs that accompany litigation, or a situation can happen when a company is sued by a deeper pocket plaintiff, wins the case, but has to shut down because the cost of litigation has exhausted its financial capital.

Last month, in a unanimous decision, the Ninth Circuit affirmed, once again, a judgment in favor of Veoh Networks in a widely followed copyright case brought six years ago by Universal Music Group. Veoh, the court held, was entitled to rely on the safe harbors of the Digital Millennium Copyright Act, and was not liable for copyright infringement for user-uploaded videos that Universal alleged contained their copyrights, an important precedent that benefits YouTube and others. Veoh, the company I joined during the early stages of the digital video revolution in 2006, which pioneered long form viewing on user generated content sites, and was the first site to offer premium content from major networks like ABC and CBS, is not around anymore to capitalize on its victory. Three years ago, a few months after Veoh's win at the district court, its leadership surveyed the war torn company, wounded from a litigation battle designed to inflict the very damage the lawsuit had wrought, wondered, at what price victory and decided to sell the assets and closed the doors. Universal Music lost the case, but achieved victory, shutting down an innovative company that threatened their static business model.

From the outset of the case, Universal Music Group made sure Veoh would suffer financially. They issued many discovery requests, doing their best to make sure Veoh spent money to defend itself. Savvy plaintiffs know how to exert pressure by exploiting our judicial system's liberal rules regarding discovery. In this regard, advances in technology have not produced economic efficiencies. Millions of documents and casual conversations are stored on computers, readily accessible. These petabytes of data need to be prepared and reviewed by lawyers before being produced in response to a discovery request. The lawyers' bill increases very rapidly when an army of attorneys is reviewing all this data. Because the bulk of documents and discovery often lie with the defendant, plaintiffs can inflict maximum financial pain on a defendant, while producing relatively few documents themselves. This tilted playing field gives plaintiffs an unfair advantage. In the Veoh case, legal fees on discovery alone were enormous, exacerbated by the magistrate's decisions to compel the company at its own cost to store every single video on our system, and to even produce Skype conversations. Who suffers? The defendant. Recourse? None.

The company quickly recognized the economics of litigation and the lack of upside to being a defendant and offered to settle. However, Veoh never had meaningful settlement discussions; Veoh did not have the cash to pay the amount Universal was seeking. The company was left with no choice but to litigate, and spend money.

To counter the ticking clock and register, Veoh hoped for a quick resolution to lift the dark cloud Universal had placed on the company that handcuffed it from raising the additional funds the company needed to grow. The case, however, was not resolved in the district court for over two years and is now approaching the six-year anniversary.

Defendants need an option other than to just play defense and wait. It was well documented in the case that Universal never even sent Veoh any takedown notice for their content and was similarly undisputed that every time Veoh received a takedown notice from every other content owner, that Veoh took the content down. Universal could have achieved its goal of having its alleged content removed from Veoh's website by merely sending the company a letter. Our judicial system gave Universal the right to sue. Shouldn't Veoh have any rights or recourse, especially when a mere letter could have avoided an entire litigation?

Unfortunately, the only option available to Veoh was to file a motion to recover fees after it won the case, even though this avenue was too little too late; the mortal damage was already inflicted. Six years of combative litigation cannot be undone entirely by recovering legal fees. Yet, the standard for recovering fees is very high and Veoh was not successful. Despite its favorable decision on the merits of the case, the Ninth Circuit denied awarding Veoh its fees, instead remanding to the District Court to consider awarding Veoh its much lower court costs. The Ninth Circuit's ruling on this point only further weakens an already poor option for innocent companies.

Our judicial system needs a solution to rectify the devastation that unfounded litigation causes companies ultimately proven innocent. Courts need to be sensitive to the new entrant and pay respect to the scales of justice when a deep pocket plaintiff goes after a financially weaker opponent. Instituting "loser pays" into the concept of commercial litigation in appropriate situations improves the chances for defendants, and could reduce meritless litigation. While this concept has been debated for decades, another standard needs to be introduced, one that holds plaintiffs and their lawyers equally accountable. Plaintiffs' lawyers should be compelled to pay any 'loser pays' fee along with their clients. In a world where plaintiffs' lawyers share in multi-billion dollar settlements, it seems only fair that if they lose a case they should pay. This will force lawyers to think twice about the merits of their clients' case, as opposed to what strong-armed litigation tactic they can use to extract a settlement. If lawyers are held accountable for their - and their client's - actions in a manner never before applied, we will see what everyone wants: a precipitous drop in the number of cases in our judicial system. We can even adopt a three strikes policy and ban law firms and their clients for twelve months if they are found guilty of such abusive behavior on more than two occasions. How refreshing that would be.

Fewer litigations will reduce the dockets of federal and state courts, reducing the need for our government to increase the number of judges and court staff, thereby saving taxpayers' money. Plaintiffs will pay more attention to increasing defendant's legal fees lest they lose. Legal fees and costs will decline, which will lead to a downward pressure on insurance premiums. Most importantly, productivity will increase. Companies will spend previously allocated monies to litigation on research, development, hiring, and expansion of operations.

Veoh encountered a plaintiff set on its destruction. They were unable to defeat Veoh in the world of technology or in the world of business. With those avenues closed, Universal sued. The judicial system provided Universal with what it could not achieve on a level business playing field. Veoh won the case but is not around to continue to grow. That is wrong. UMG and its lawyers should be required to pay for the damage they have done. Strike one to a plaintiff and its lawyers. Fairness in our judicial systems dictates such an outcome.

Joshua Metzger is an Internet consultant. He was SVP Corporate Development & General Counsel for Veoh Network and before that was chief legal officer for Overture Services, which was acquired by Yahoo!.


Reader Comments (rss)

(Flattened / Threaded)

  1. This comment has been flagged by the community. Click here to show it
     
    identicon
    out_of_the_blue, Apr 24th, 2013 @ 3:31pm

    More likely ripped off by your own lawyers.

    You (Veoh) should have demanded a speedy trial by jury, gone into it cheerfully and relied on presumption of innocence plus prosecution acting like lawyers and annoying the jury. -- That's if you had a simple story to tell: "But we're doing same thing as Youtube!" -- My opinion is that as your "business model" relied on users providing content and Veoh (I assume) went to some lengths to be blind as to what the content was (you relied on "safe harbors" legalism which is not going to win easily with a jury), the corp had to tread carefully, so you got squeezed by the crooks you thought were on your side, but are in fact amoral rats and have huge interest in complicating every case.

     

    reply to this | link to this | view in thread ]

  2.  
    identicon
    Mr. Oizo, Apr 24th, 2013 @ 3:39pm

    Well written (as opposed to this two-worder).

     

    reply to this | link to this | view in thread ]

  3.  
    icon
    Rapnel (profile), Apr 24th, 2013 @ 3:40pm

    Not just for companies. Look at the power of prosecution. Can result in death. Where the system will kill you before the sentence. So close. The defense rests in caskets and flowers by the door.

    I'm sorry your company was crushed. This seems to be occurring rather frequently. Perhaps you should strap in for another round nonetheless and help change the situation.

     

    reply to this | link to this | view in thread ]

  4.  
    identicon
    Anonymous Coward, Apr 24th, 2013 @ 3:41pm

    These are the reasons.

    For this reason, in a sea of reasons identical to it, I have lost all respect for the entertainment cartels. The judicial system is broken, yes, I will not argue that point.


    But I do not blame the gun for having been used to kill.

     

    reply to this | link to this | view in thread ]

  5.  
    icon
    Rapnel (profile), Apr 24th, 2013 @ 3:48pm

    Re: These are the reasons.

    erhm.. you've heard the term "guns don't kill people people do" I'm sure. Well your analogy is not quite appropriate as there can be no justice without people, justice is people. Guns are just guns. And, as we can both plainly see, people can be just as bad mannered using both - so I'll give you that.

     

    reply to this | link to this | view in thread ]

  6.  
    identicon
    cpt kangarooski, Apr 24th, 2013 @ 3:50pm

    Re: More likely ripped off by your own lawyers.

    You (Veoh) should have demanded a speedy trial by jury, gone into it cheerfully and relied on presumption of innocence plus prosecution acting like lawyers and annoying the jury.

    That doesn't make a lick of sense. Veoh likely got as swift a trial as possible. But in civil litigation in the US, parties are entitled to discovery. Lots of discovery, in fact. I've seen cases where discovery dragged on for years, due to a large number of documents which have to be checked to see if they have to be turned over, and then looked through once they have been. It's inescapable so long as parties are obligated to help one another investigate the facts.

    Frankly, you sound like your knowledge of litigation is self-taught based on half-remembered episodes of Matlock and what you've read on the back of cereal boxes.

     

    reply to this | link to this | view in thread ]

  7.  
    identicon
    Anonymous Coward, Apr 24th, 2013 @ 3:52pm

    Re: Re: These are the reasons.

    the nuance, I think it went over your head.

     

    reply to this | link to this | view in thread ]

  8.  
    identicon
    Anonymous Coward, Apr 24th, 2013 @ 4:07pm

    Re: Re: These are the reasons.

    Then perhaps justice is a little too loose. When you can freely litigate people into losing their shirts for imaginary property, then justice is broken.

    The fact that people are involved doesn't help, but is necessary.

     

    reply to this | link to this | view in thread ]

  9.  
    identicon
    Anonymous Coward, Apr 24th, 2013 @ 4:09pm

    while members of Congress and the judicial system are able to get and continue to receive lobbying funds and 'incentives' from the entertainment industries, the amount of innovation in the entertainment field will continue to be minimised. the situation as it is was obviously created purposefully by Congress in return for the funds they receive. if that was not the case, then the law would have been changed so that whenever there was an abuse of copyright, whether in this sort of situation or by just having a music track or movie snippet removed by a false claim, retribution would be available.

     

    reply to this | link to this | view in thread ]

  10.  
    identicon
    twilightfog, Apr 24th, 2013 @ 4:45pm

    Universally despised Universal Music

    I hope Veoh founders won't be discouraged to run a startup again. The entertainment industry is the scourge of the planet. I hope when artists start releasing their records directly and fans start paying directly to the artists, RIAA will run out of funds to finance their lobbying and lawsuits tactics. Not sure when it would be happening for MPAA, the movie industry still holds a tight grip over production to distribution. I hope the indie film industry will turn the table on them someday, but their task is harder.

     

    reply to this | link to this | view in thread ]

  11.  
    icon
    velox (profile), Apr 24th, 2013 @ 4:48pm

    Bring the British system to the US

    What the US sorely needs to accomplish legal reform can be said in 2 words: Loser Pays.

    So called consumer advocates (who are really representatives for plaintiff's attorneys) hate the idea for the very reason it is a good idea. Increasing the risk associated with bringing a questionable lawsuit means there will be fewer lawsuits. Fewer lawsuits mean fewer lawyers getting paid, and less expenditure of resources in nonproductive ways by all concerned.

    A true consumer advocate should accept this idea because if a corporation has wronged a consumer or group of consumers, the offender would be quicker to settle if it knew there was a good chance of losing not only the judgment, but also the opponent's legal fees. There is less chance that a true offender can just stall until the claimant runs out of money and gives up.

    Loser Pays means fewer frivolous lawsuits, fewer attempts at legal bullying and less expensive justice. Period.

     

    reply to this | link to this | view in thread ]

  12.  
    identicon
    Anonymous Coward, Apr 24th, 2013 @ 4:49pm

    Re: Re: Re: These are the reasons.

    As long as people believe in the concept of imainary property (IP) then people will litigate over it. Eliminate IP and everyone will keep their shirts.

     

    reply to this | link to this | view in thread ]

  13.  
    identicon
    Anonymous Coward, Apr 24th, 2013 @ 5:02pm

    Re: Re: Re: Re: These are the reasons.

    I prefer "Imaginary Profitables".

     

    reply to this | link to this | view in thread ]

  14.  
    identicon
    Anonymous Coward, Apr 24th, 2013 @ 5:17pm

    Re: Bring the British system to the US

    Loser pays is a horrible idea, because it puts a burden on the offended to be absolutely certain beyond all doubt before taking action. That would essentially remove the requirement for judges because there would be no need for judgement. Every case would be an absolute certainty.

    You would be raising the risk on one side, and all but entirely removing the risk to those who offend. That would be incredibly unfair.

     

    reply to this | link to this | view in thread ]

  15.  
    icon
    ukyo_rulz (profile), Apr 24th, 2013 @ 5:26pm

    Re: Re: Bring the British system to the US

    Loser pays is a horrible idea, because it puts a burden on the offended to be absolutely certain beyond all doubt before taking action.

    I for one think that a litigant must at the very least be absolutely certain beyond all doubt that he will eventually win a case before suing.

     

    reply to this | link to this | view in thread ]

  16.  
    icon
    That One Guy (profile), Apr 24th, 2013 @ 6:22pm

    Re: Re: Bring the British system to the US

    I don't see a problem personally. If a company or person is sure enough to bring a lawsuit or even threaten one, then you'd think they'd have checked to be certain that they have a viable case first.

    I feel this is important enough to give it it's own little spot, so here it is: Bringing, or even threatening to bring lawsuits against someone should never be something a company does casually or without thinking carefully about it first. If a 'loser pays' system causes companies to be less lawsuit happy and willing to sue everyone they think they even might have a case against, and forces them to consider things more before suing, then that's all for the better.

    A loser pays system would make companies actually stop and think before letting the lawyers loose, cutting down the 'sue to shut a competitor down' situations, while still enabling those that are obviously violating the law/copyright to be gone after.

     

    reply to this | link to this | view in thread ]

  17.  
    icon
    Mike Brown (profile), Apr 24th, 2013 @ 6:35pm

    Re: Re: Bring the British system to the US

    You have got to be kidding. You're darn right the burden is on the "offended." That's where it belongs. If you think you're entitled to justice, your options are simple. Consult a lawyer who can advice you if you can legitimately make that claim in court. Then you find out what it will cost to properly make that claim, and you decide whether to proceed, or take your lumps and stfu.

    On the other hand, if you sue me willy-nilly over some half-cocked notion, you place an unfair burden on me to defend myself. If it is determined that you were in the wrong, why should I have to pay legal fees?

    Under "loser pays" you'll think twice before you try to pervert the legal system by turning it into a weapon.

     

    reply to this | link to this | view in thread ]

  18.  
    identicon
    Anonymous Coward, Apr 24th, 2013 @ 10:33pm

    Re: Bring the British system to the US

    That's a stupid idea if I've ever heard one. Loser pays? So if I am harmed by an enormous company and sue; if I lose to their 40 person legal department I end up paying? Awesome, that should about $500.000. Just about what I have in the couch cushions.

     

    reply to this | link to this | view in thread ]

  19. This comment has been flagged by the community. Click here to show it
     
    identicon
    Anonymous Coward, Apr 24th, 2013 @ 10:41pm

    Joshua

    Can't say I'm sorry to see freeloading grifters go out of business. But it sounds like you, as general counsel humped up the legal strategy beyond belief. Now you come here blaming the system for your own failure? Pretty weak.

    Why would an impoverished party ever litigate a matter with an affluent one? Often times paying the rich guy's (inflated) legal costs would be ruinous and have a chilling effect an most of the litigation out there.

     

    reply to this | link to this | view in thread ]

  20.  
    identicon
    Anonymous Coward, Apr 24th, 2013 @ 10:46pm

    Re: Re: Bring the British system to the US

    Why would you file a suit in the first place if the odds are bankruptcy?

     

    reply to this | link to this | view in thread ]

  21.  
    icon
    Ferel (profile), Apr 24th, 2013 @ 10:55pm

    Re:

    What is it with your obsession of accusing everyone on the internet who doesn't worship copyright of freeloading?

     

    reply to this | link to this | view in thread ]

  22.  
    identicon
    Anonymous Coward, Apr 24th, 2013 @ 11:10pm

    Re:

    Because sometimes it is better to do the right thing over letting evil win.

    Or did you not see that part where UMG admitted they had not sent a single akedown notice before suing.

     

    reply to this | link to this | view in thread ]

  23.  
    icon
    JMT (profile), Apr 25th, 2013 @ 1:04am

    Re:

    "Can't say I'm sorry to see freeloading grifters go out of business.

    You do realise multiple courts found that Veoh were actually not "freeloading grifters" right? That's kinda the main point of the story...

    "Now you come here blaming the system for your own failure?"

    Veoh didn't fail in court, they won every time. You seem to be failing to grasp the basic stuff here.

     

    reply to this | link to this | view in thread ]

  24.  
    icon
    That One Guy (profile), Apr 25th, 2013 @ 1:27am

    Re: Re:

    Best I can figure, it's projection. All the ones who go around accusing all and sundry of the most heinous acts for daring to have a different opinion on something, are, I can only assume, guilty of those very acts, and in an attempt to deflect their guilt they go around blaming everyone else.

     

    reply to this | link to this | view in thread ]

  25.  
    icon
    PaulT (profile), Apr 25th, 2013 @ 1:30am

    Re: Re: More likely ripped off by your own lawyers.

    No, it's ootb. He just had to type whatever he could pull from his nether regions as quickly as possible so that his need to criticise Techdirt on every article as quickly as possible and pretend he knows more than them. I doubt he even realises that the person writing the article wasn't a regular Techdirt poster, let alone the facts of the case or the law behind it.

     

    reply to this | link to this | view in thread ]

  26.  
    icon
    PaulT (profile), Apr 25th, 2013 @ 1:47am

    Re: Re: Bring the British system to the US

    Well, the current system appears to be that the 40 person team are the ones bringing the legal action to an unprepared victim who have to pay the money even if they win. That really doesn't sound better than the burden of cost being on the people taking legal action if they lose.

     

    reply to this | link to this | view in thread ]

  27.  
    identicon
    Anonymous Coward, Apr 25th, 2013 @ 1:54am

    Re: Re: Bring the British system to the US

    it is SUPPOSED to act as a discouragement to filing a lawsuit. The whole point is to make plaintiffs think before suing. a lawsuit should be a last resort, not a first option.

     

    reply to this | link to this | view in thread ]

  28.  
    icon
    That One Guy (profile), Apr 25th, 2013 @ 1:55am

    Re: Re: Bring the British system to the US

    Which would be different from the system as it currently stands how...?

    Currently, whether or not you have a solid case, all a company has to do is force you to spend more than you can afford and they win. And if you're lucky enough to win, despite all the costs you suffered? Guess what, all they have to do is appeal until you can no long afford to fight.

    Under a 'loser pays' system though, they wouldn't be able to bleed you dry like that, as a win for you would mean a full recouping of expenses, allowing you to continue fighting if they appealed.

     

    reply to this | link to this | view in thread ]

  29.  
    identicon
    Anonymous Coward, Apr 25th, 2013 @ 1:57am

    Re: Re: Bring the British system to the US

    No, incredibly unfair is a big company bankrupting you through legal fees even though you've done nothing wrong.

     

    reply to this | link to this | view in thread ]

  30.  
    icon
    PaulT (profile), Apr 25th, 2013 @ 2:00am

    Re:

    "freeloading grifters"

    Not only have you not worked out why that word you keep using doesn't mean what you think it means, but you're commenting on a story where the people being accused of that were found NOT GUILTY. Multiple times. Are you so afraid of reality that you have to pretend that this means a guilty verdict now? Sometimes when reality doesn't say what you wish it did, that means that the truth is not what you want it to be. Deal with reality.

    "But it sounds like you, as general counsel humped up the legal strategy beyond belief."

    Talking about reality, the article states quite clearly that Veoh tried to settle, but they couldn't pay the demanded amount and were left with no option but to continue legal defence. It also states that Universal had the option to get the content removed without litigation, but insisted on the legal route. The "general counsel" who humped up the legal strategy were the lawyers for Universal.

    Another instance where you somehow read words and come out with the exact opposite of what they say. You live in a fantasy world.

     

    reply to this | link to this | view in thread ]

  31.  
    identicon
    Anonymous Coward, Apr 25th, 2013 @ 2:01am

    Re: Re: Bring the British system to the US

    actually, that doesn't happen. why? because a) courts only award REASONABLE fees- for exactly that reason. b) you still need to be able to collect. funnily enough, lawyers don't like ti when there is little prospect of them getting paid.

     

    reply to this | link to this | view in thread ]

  32.  
    icon
    Anonymous Howard (profile), Apr 25th, 2013 @ 2:56am

    Re: Re: Re:

    Nah, more likely just trolling..

     

    reply to this | link to this | view in thread ]

  33.  
    identicon
    Anonymous Coward, Apr 25th, 2013 @ 3:30am

    loser pays

    In a loser pays situation, the little guy has an impressive weapon suing, or being sued. but if you are afraid, why not just limit it to company vs company situations, it really doen't matter what happens in the greater scheme of things to any paticular company, a company isn't really a person no matter the legal pretense.

     

    reply to this | link to this | view in thread ]

  34.  
    identicon
    Anonymous Coward, Apr 25th, 2013 @ 3:32am

    loser pays

    In a loser pays situation, the little guy has an impressive weapon suing, or being sued. but if you are afraid, why not just limit it to company vs company situations, it really doen't matter what happens in the greater scheme of things to any paticular company, a company isn't really a person no matter the legal pretense.

     

    reply to this | link to this | view in thread ]

  35.  
    identicon
    anonymouse, Apr 25th, 2013 @ 4:43am

    Re: Bring the British system to the US

    Sickening to see that this is being allowed to happen, the Judge should have given them all money they lost due to the case and a few million for the loss of their business.
    This would discourage the claimant form ever doing this again.

     

    reply to this | link to this | view in thread ]

  36.  
    identicon
    Joe, Apr 25th, 2013 @ 6:07am

    Ready.gov?

    I completely agree with the problems pointed out in this post. Is there a ready.gov petition I can sign?

    Sadly there are tons of issues that need to be addressed that I would easily support.

     

    reply to this | link to this | view in thread ]

  37.  
    identicon
    Joe, Apr 25th, 2013 @ 6:13am

    Re: Re: Re: Bring the British system to the US

    Also loser pays will stop a lawsuit from suing every party involved in something. That way they only focus on the actual guilty party rather than napalming everyone in a 20ft radius of the issue.

     

    reply to this | link to this | view in thread ]

  38.  
    identicon
    Anonymous Coward, Apr 25th, 2013 @ 6:24am

    It is wrong, but this is what the people in power consider 'justice'. It's like they built the tools for the rich to be able to do wtf they want without regard for anything.
    Coincidentally, most politicians appear to be pretty well off...

     

    reply to this | link to this | view in thread ]

  39.  
    identicon
    Anonymous Coward, Apr 25th, 2013 @ 6:57am

    Savvy plaintiffs know how to exert pressure by exploiting our judicial system's liberal rules regarding discovery.

    When you have a Judge who has an ex-parte hearing to reopen a case, the Clerk of the Courts who sends the lawyer back his paperwork after filing it and that same Judge denying discovery because he didn't like reading the paperwork in the case (Wisconsin, Waukesha County 2012sc400) it doesn't matter how 'savvy' you are as the Judge controls the show.

     

    reply to this | link to this | view in thread ]

  40.  
    icon
    special-interesting (profile), Apr 25th, 2013 @ 7:39am

    Am in total agreement that the legal system is broken in this respect.

    The concept of making prosecuting lawyers responsible for losses along with the plaintiff is fascinating and have not heard of it before. Since lawyers do share in the proceeds of litigation by a large percent it would be a great deterrent to baseless, unfounded, meritless lawsuits. Most of the risks are presently assumed to be on the person hiring the lawyer. Not sure how that would be implemented.

    Is sad that the 9th circuit court did not allow the defendant to recoup defense litigation expenses. In this case it seems appropriate that Veoh should be able to. Its possible that the judge is not very tech savvy and might not see the disparity in accusation vs substantial proof.

    Universal seems like a dark entity with no good standing. If they went bankrupt in an economically horrible way it might be good thing.

    But. All of that observing is kind of irrelevant to the real problem; If copyright term limits were reasonable and not eternal in length there might be much less to contest about.

    Considering that Mr. Metzger was likely in the business of profiting from eternal copyright its not surprising this was not mentioned. Putting forth the question; How would Veoh benefit from copyright terms of 14-28 (or less) years? Its likely that the base of its operations would have been reduced in size unless they could find a way to benefit from Public Domain Rights. The business model would still work though.

    Reactionary,

    Loser pays might be a good thing for companies. For people maybe not. (many posts) Companies end in bankruptcy, and that happens, but people end up in the gutter and that is bad.

    Mike Brown; “You're darn right the burden is on the "offended." That's where it belongs.”

    This is not a bad attitude in respect to the way burden of proof is upon the accuser and that the defendant is innocent until otherwise found guilty. Its MENT that there be a high level of confirmation (first person witness etc) for any evidence. For any firm to profit by just leveling an accusation is beyond the scope of civil law. Courts are not always up on new technology and its implications.

    However this suggests that there be new legislation that requires the judicial branch to demand a higher level of evidentiary proof of harm or damages before allowing a civil lawsuit. This might be a nice thing to see.

    That One Guy; “All the ones who go around accusing all and sundry of the most heinous acts for daring to have a different opinion on something, are, I can only assume, guilty of those very acts, and in an attempt to deflect their guilt they go around blaming everyone else.”

    Hypocrisy is one of the first symptoms of a lier/perpetrator. Its one of the easiest ways to measure the “something going on” thing. Hilarious is the fact that many times even the lairs/perpetrators themselves wholeheartedly believe that they are not lying or doing anything wrong and that they were the first to be duped.

     

    reply to this | link to this | view in thread ]

  41.  
    icon
    The Groove Tiger (profile), Apr 25th, 2013 @ 7:39am

    Re: Bring the British system to the US

    Just to be sure, when people say "loser pays" they only mean the plaintiff, right? Being sued, then losing, then being forced to pay extra for the money spent suing you also seems like a recipe for abuse.

     

    reply to this | link to this | view in thread ]

  42.  
    icon
    RyanNerd (profile), Apr 25th, 2013 @ 8:16am

    Re: Re: Bring the British system to the US

    The burden of proof absolutely should be put on the accuser and not so much the accused. Otherwise you have nonsense like what Veho experienced.

    In England when you sue you think twice before litigation and make sure you have your facts right and a good chance of winning or it is expensive for the plaintiff to proceed should you lose. So crap like Veho does not happen in England.

    Veho is not an isolated case and the broken justice system is one of the reasons patent trolls are running rampant.

     

    reply to this | link to this | view in thread ]

  43.  
    icon
    mattshow (profile), Apr 25th, 2013 @ 8:20am

    Loser pays

    In all this discussion over whether the 'loser pays' system is a good idea or not, no one has pointed out this: while the general rule in the US is that everyone is responsible for their own litigation, some acts contain provisions where winner can ask the court to order the loser to pay some of their costs. The Copyright Act is one of those.

    Section 505:
    In any civil action under this title, the court in its discretion may allow the recovery of full costs by or against any party other than the United States or an officer thereof. Except as otherwise provided by this title, the court may also award a reasonable attorney’s fee to the prevailing party as part of the costs.


    So, to some extent, there is already a 'loser pays' system in the US when it comes to copyright law. Obviously it didn't help much in the Veoh case. I don't know the details of the case, so I don't know why that is.

    Also, at least in Canada (and I assume in the UK as well) 'loser pays' almost NEVER means 'loser pays ALL of the other sides legal fees'. Even if you win, you're lucky to get 50% of your costs covered. There are exceptions to this, the big one being if the other side was engaged in vexatious or unethical conduct. But if they had a reasonable case and they argued it in an appropriate manner and lost, 50% is about as much as you can hope to get.

     

    reply to this | link to this | view in thread ]

  44.  
    icon
    mattshow (profile), Apr 25th, 2013 @ 8:24am

    Re: Re: Bring the British system to the US

    Just to be sure, when people say "loser pays" they only mean the plaintiff, right? Being sued, then losing, then being forced to pay extra for the money spent suing you also seems like a recipe for abuse.

    Again, at least here in Canada, it doesn't matter whether you're the plaintiff or defendant. If you lose, you typically pay some portion of the other side's legal fees.

    I guess the rationale is that it's unfair that the plaintiff had to pay all that money just to protect their rights. You were the one who acted 'badly', so you should have to pay some of that.

     

    reply to this | link to this | view in thread ]

  45.  
    icon
    mattshow (profile), Apr 25th, 2013 @ 8:35am

    And yes, I realize it was mentioned in the article, I just meant it had not been brought up in the discussion in the comments.

     

    reply to this | link to this | view in thread ]

  46.  
    identicon
    Anonymous Coward, Apr 25th, 2013 @ 8:38am

    It needs to go far beyond looser pays. They need to award punitive damages, as a percentage of profits / revenue in a case like this.

    Universal wants to sue a company out of existence, fine. They loose, whats left of the company has a right to 3 months profit from universal.

     

    reply to this | link to this | view in thread ]

  47.  
    identicon
    Anonymous Coward, Apr 25th, 2013 @ 9:48am

    How much for the website and software?

    Mr Metzger,

    Sorry to hear about the demise of your company. Also am very sorry to hear that you must sleep in plastic tent, eat tree bark and birds for food.

    As Supreme Leader of the Democratic People's Republic of North Korea, I, Kim Jong-un would like to extend you a loan of 100 million North Korean won, facilities in our industrial complex in Yongbyon and the assurance that you will be able to set up your business with no interference from the United States or DPRK governments.

    Sincerely,

    Kim Jong-un
    despotic Great Leader and Hollywood Film Buff

     

    reply to this | link to this | view in thread ]

  48.  
    icon
    crade (profile), Apr 25th, 2013 @ 10:41am

    Re: Re: Re: Bring the British system to the US

    Of course. The burden has to be on the offended because they are the ones who are choosing to invoke it.
    Otherwise, they just go suing everyone for no other reason than to bring the burden on them, which is a mockery of justice.

    I'm not sure many other justice systems actually have this degree of an issue with people suing without proper cause. Perhaps looking at how some other systems handle this might be worthwhile.

     

    reply to this | link to this | view in thread ]

  49.  
    icon
    crade (profile), Apr 25th, 2013 @ 10:44am

    Re: Re: Bring the British system to the US

    You have a mistake with your sentence.
    " if I am harmed by an enormous company and sue; if I lose"

    you mean " if I am *not* harmed by an enormous company", (since you lost).

    If you were harmed (in the eyes of the law of course, other harm is irrelevent), you would have won, and therefor wouldn't need to pay

     

    reply to this | link to this | view in thread ]

  50.  
    icon
    Ninja (profile), Apr 25th, 2013 @ 11:55am

    Re: Re: Bring the British system to the US

    I think it's a bit different. If I'm a lawyer I'd go for the cases where the plaintiff seems doubtful and offer defense to be paid with resources from when my defending party wins. The defendant that has less resources will gladly accept, I'll be looked at as a champion of the weak and I'll make tons of money in the process. Win!

     

    reply to this | link to this | view in thread ]

  51.  
    icon
    James Burkhardt (profile), Apr 25th, 2013 @ 12:32pm

    Re: More likely ripped off by your own lawyers.

    As Ive previously noted to you, Juries do not decide Questions of Law. Copyright disputes are more often questions of law then fact, and so are not Jury trials. This case was a question of law, which they won repeatedly. The facts were never in dispute. A speedy trial is a misnomer because A) the right only applies to criminal cases B) still takes months and C) the defense could not ignore discovery to get to trial. Its why the plaintiffs demanded lots of discovery.

     

    reply to this | link to this | view in thread ]


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here
Get Techdirt’s Daily Email
Save me a cookie
  • Note: A CRLF will be replaced by a break tag (<br>), all other allowable HTML will remain intact
  • Allowed HTML Tags: <b> <i> <a> <em> <br> <strong> <blockquote> <hr> <tt>
Follow Techdirt
A word from our sponsors...
Essential Reading
Techdirt Reading List
Techdirt Insider Chat
A word from our sponsors...
Recent Stories
A word from our sponsors...

Close

Email This