The Economy of Infringement

Copyright infringement and its recovery takes an enormous toll…and not just in legal fees. The process of identifying copyright infringement, its verification, and the highly iterative aspects of the works’ removal and recovery efforts touches many markets and actors. Infringers themselves can be big and small businesses, non-profits, and individuals, and can encompass anyone who uses online publishing and marketing.

With the scope of infringing activity so wide, and participants so diverse, the economic footprint from its effects is equally as great. Loss of revenues and legal fees are concrete measurements of its impacts, but there are more ambiguous and subtle impacts. When trying to define the scope of impact, and topically assign categories, it quickly goes broad and deep.

Areas of Impact

Business
– Adversarial conduct impactful to business relations/development/growth
– Loss of revenue due to financial impact as plaintiff
– Loss of revenue due to financial impact as defendant
– Technical compliance measures
– Auditing: both internal and external
Personal
– Disruption of familial and personal relationships
– Stress and treatment measures (manifests as healthcare requirements)
– Income loss
Legal
– Attorney fees incurred as plaintiff
– Attorney fees incurred as defendant
Societal
– Tax burden for judicial system in handling cases
– Moral burden in prioritizing Judicial resources against other societal issues
– Devaluation of copyrighted content stifles the appreciation and investment in creative works

 

Many Variables and Little Stats

Attaching numbers to abstracts like societal impacts, let alone narrowing down to specifically photography, is a multi-year study. No collective stats are kept around infringing use, pursuit of claims within court or settlement outside of courts. Likewise, as a somewhat private pursuit, legal firms don’t make available their statistics nor do those businesses impacted (whether public or private) readily share their story. Courts that handle claims have public data, but meaningful aggregation of statistics is not immediately known as courts are local. Not all claims end up in court, and the matter of settling directly by both parties and through arbitration are likely more common — and very difficult to tabulate.

Infringement recovery per US copyright law allows for $750-$30,000 per infringed work, but under willfulness on behalf of the defendant can top out at $150,000. While pursuit can be lucrative, resources are limited for many copyright holders where no guarantees exist. As summarized in his research paper Copyright Infringement Markets by Shyamkrishna Balganesh, University of Pennsylvania, the process of recoupment remains attainable only for those with means…”As of 2011, the average cost of litigating a copyright infringement case through trial, for either plaintiff or defendant—and excluding judgment and awards—was estimated to range from $384,000 to a staggering $2 million. To individual, small business, or non-commercial creators, all of who are intended beneficiaries of copyright, copyright litigation remains an unaffordable proposition.”

Infringement Recovery for the Few

How many cases of infringements are there? DMCA take down requests do not provide any accuracy around the volume of copyright infringements, as take down requests are targeted to specific website owners, as well as ISPs like Google (in 2013, Google received  over 235MM DMCA take down requests to remove offending links from their search — this is a fraction of overall take down requests globally and covers all media types).

Copyright trolls — those devoted to exploiting chapter 5 of the copyright law to its full effect for their well-funded clients — are generally viewed as the co-beneficiaries of the current infringement economy, and exist in a perfect storm of ambiguity within the DMCA and lack of consumer and market knowledge around infringing use. While this works well for large media companies with deep pockets, for everyone else there are limited means and channels for copyright holders to seek recoupment and recovery around infringement.

Hopefully, with renewed interest in addressing this asymmetry, the government can address channels available for copyright infringement recovery and existing resource constraints. However, with the current climate that’s decidedly anti-rights holder, and with copyright constantly thrown under the network neutrality bus, all those invested in the creative economy seeking a measure of control might only have hope.

 

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