Tuesday, July 12, 2005

Damages in Grokster

The Court remanded, with Souter observing that "although an exact calculation of infringing use, as a basis for a claim of damages, is subject to dispute, there is no question that the summary judgment evidence is at least adequate to entitle MGM to go forward with claims for damages and equitable relief."

Assume statutory damages are available. How do you measure them? Are the defendants liable for every infringing use, or just the infringing uses that they "actively induced"? If 90% of the P2P traffic is infringing, how much of that was induced by the defendants' advertising and promotion, and how much was induced by reading about P2P on CNET.com, or at the lunch table in the high school cafeteria. Are defendants liable for only for their own active inducement, and are those specific infringements identifiable and provable? Or are they liable for the "network effects" that they set into motion?