This provision is one of the most gluttonous in the whole bill. It seeks to expand radically the amount of statutory damages that can be recovered, and in cases where there are zero actual damages. The provision is intended to benefit the record industry but will have terrible consequences for many others; the provision has nothing to do with piracy and counterfeiting; instead it seeks to undo rulings in the 2000 MP3.com litigation, a decidedly non-piracy or counterfeiting case, instead involving the use of digital storage lockers. Under the original MP3.com decision, where a CD had twelve tracks, there was only one award of statutory damages possible. Under the bill, there may be 25: there would be 12 for each track on the sound recording, 1 for the sound recording as a whole, and 12 for each musical composition. Under this approach, for one CD the minimum award for non-innocent infringement must be $18,750 (my emphasis), for a CD that sells in some stores at an inflated price of $18.99 and may be had for much less from amazon.com or iTunes. The maximum amount of $150,000 then becomes three million, seven hundred and fifty thousand dollars per CD. Now multiple that times a mere ten albums, and one gets a glimpse at the staggering amount that will be routinely sought, not just in suits filed, but more importantly in thousands for cease and desist letters, where grandmothers and parents are shaken down for the acts of their wayward offspring. These private non-negotiable demands don’t see the light of day, but they have resulted in “settlements” wherein ordinary people have paid abnormal amounts of money rather than be hauled into court and thereby incur costs that will bankrupt them. One only wishes Congress would hold a hearing on this practice.

Even limiting claims to 12 tracks, this equals a minimum award of $9,000 per CD. Is there any doubt that $9,000 per CD will be demanded and described as a metzia sparing parents and grandparents from the far greater expenses of litigation? It is no answer to say, well, we are only talking about those involved in file sharing, they’re bad people who deserve to pay; when was proportionality abandoned as a principle of law? During a death penalty argument in 1981, Justice Rehnquist suggested that the inmate’s repeated appeals had cost the taxpayers too much money. Justice Marshall interrupted, saying, “It would have been cheaper to shoot him right after he was arrested, wouldn’t it?” Imposing the death penalty on a few file sharers might discourage others, but that hardly forms the basis for sound policy, nor do statutory damage penalties that will result in economic death.

While the article talks about American law, given that American law is the default in this topic and that you can be prosecuted through similar mechanisms in many other countries I think it’s well worth a look.

18,750 dollars per album, I mean, bloody hell….

Update:
Re-reading this article there are a few other paragraphs that are just astonishing

The idea that criminal forfeiture provisions, drafted to reach major drug traffickers like the Columbian cartels, should be inserted into civil copyright tort provisions with a preponderance of the evidence burden, is mind-blowing. The capacity – if not intent – of these provisions for profound mischievousness is obvious: in addition to the gluttonous statutory damages that would be available, content owners now want to defendants to forfeit their computers, their cars, and their homes: all of these can be said to have been used in the commission of infringement (say defendant uses his phone to call someone else involved in the infringement and says “meet me at 11 at Moe’s).

But the bill goes even further: it is not only property actually used that is subject to forfeiture, property that wasn’t used but was “intended to be used” can also be seized. Say, a defendant intended to use his car to transport a computer used in connection with infringement, civil infringement, but decided to take his wife’s car instead. Under the bill, both cars, the computer, and the house where the cars and the computer are stored can be forfeited. But there is more: the bill also includes property “derived from any proceeds obtained directly or indirectly” as result of civil infringement. A television, children’s toy, anything that a defendant owns could fall within this: how could one disprove that any property purchased in the relevant time period was not indirectly derived from infringement. Is even gluttony enough to describe this?

Among the most fanciful is the notion that conservatives are self-reliant actors who embrace a private sector free from government meddling. Supposedly, the right is content to take on the free-market with strength and skill, and let the chips fall where they may, while liberals look to the state to be their protective nanny, there to iron out the wrinkles of a dynamic, entrepreneurial society

A quick example of how the deck is stacked in certain ways:

Now what they could have done — and this would have been a true free trade policy — they could have said, “Look, there are a lot of very smart people in Mexico and China and India. And they can be doctors, lawyers, accountants and economists, and they would drive down costs in those areas enormously.” We’d get our health care for much, much less — we’d save hundreds of billions of dollars per year — our college tuition would fall, because we’d pay college professors much less. We could make the whole thing transparent — set up standards to make sure that we get the same quality of doctors.

Enormous savings for the United States — a great free trade story — but instead of putting downward pressure on the wages of our auto workers, we’d be putting downward pressure on the wages of our highest earners. If we brought our wage structure for doctors just down to European levels, you’d be talking about saving $80 billion per year. That’s a big chunk of our health care bill right there. But no one talks about that, and that’s a classic example of framing the debate about what “free” trade is.

You can read the article here and download the PDF book here