In June, we exposed how CalPERS had engaged in massive copyright fraud. As we anticipated, the publishers from which CalPERS has taken the most articles, Dow Jones and the New York Times, are aggressively pursuing their claims. Both publishers have made clear that they expect CalPERS to write very large checks. Bloomberg also contacted CalPERS. They are willing to speak to us about the current status but due to a scheduling mishap on my end, I did not connect with them yesterday. I’ll provide a short update or separate post when I have further information.
By way of background, from our second post on this story:
The New York Times was the first to act and read us its cease and desist letter, which only demanded that CalPERS remove the purloined articles within three business days or face further action. Based on both its history and input from knowledgeable parties, we expected that Dow Jones, from which CalPERS had taken the most stories, would pursue its claims against CalPERS aggressively and seek large monetary damages.
We made a Public Records Act request to CalPERS. The thin response nevertheless makes for lively reading. It shows that both Dow Jones and the New York Times are loaded for bear. If nothing else, be sure to read the letter from Dow Jones’ litigation counsel, Patterson Bellknap Webb & Tyler, which starts on page 4 of the PDF embedded at the end of this post.
Even though the records are largely self-explanatory, let us offer some observations:
The Dow Jones nastygram is in a league of its own. I’ve seen quite a few demand letters in my day, and I’ve never seen anything remotely like this one. Neither have any of the lawyers and legally-savvy people I’ve asked to look at it. And even though the New York Times didn’t lay down the law in such explicit detail, the short note from its counsel to CalPERS CEO Marcie Brown was also exceedingly firm.
The reason for such aggressive postures, as we’ve set forth longer form in earlier posts, is that copyright law is extremely favorable to copyright holders. It is inconceivable for CalPERS to get out of this mess if the publishers pursue their claims, and Dow Jones and the New York Times have already started down that path.
CalPERS is looking at easily $30 million of damages. An expert had said that Dow Jones had gotten eight figure settlements in similar cases. We had compared the CalPERS violation to a 2003 case, Lowry’s Reports, Inc. v. Legg Mason Inc, in which Lowry’s was awarded $19.2 million in damages. If you read a recap of the legal issues, you will see that Lowry’s pursue copyright claims only, which allow for damages of up to $150,000 per violation for willful infringement.
If you read the letter from Patterson Bellknap to CalPERS, it asserts another basis for damages in addition to copyright infringement, which allows publishers to seek either statutory damages of $750 to as much as $150,0000 in the case of willful infringement per copyrighted work.
CalPERS is also liable for damages due to having stripped out “copyright management information” under the Digital Millennium Copyright Act. The damages are up to $25,000 plus attorney’s fees per each stripping of the copyright information from a copyrighted work. As mind-boggling as additional damages of up to $25,000 per copyrighted work seems, the language suggests that it might be possible to have more than one stripping of copyright management information per work, depending on how the publisher incorporated it.
By way of background, from our second post on this story:
In the early morning on June 9, we reported that CalPERS had engaged in systematic copyright infringement by operating a daily news site that had published the full text of news stories from many publications for years.
Because CalPERS refused to take down its website even after it was caught out, we set out to determine the full extent of the misconduct.
From the inception of the site on August 2, 2009 through June 9, 2017, CalPERS has published the full text of over 50,000 articles. These articles were on an internet address open to any member of the public. All the articles were in a standardized format. None had any indicators that the CalPERS had paid the license fees to allow it to present them to its roughly 2,700 employees and board members, such as notices of copyright that publishers typically require for authorized republication. (...)…As we explain in more detail, every lawyer with copyright or intellectual property expertise that we consulted said that for publications that registered their copyrights, CalPERS has no defense.
The New York Times was the first to act and read us its cease and desist letter, which only demanded that CalPERS remove the purloined articles within three business days or face further action. Based on both its history and input from knowledgeable parties, we expected that Dow Jones, from which CalPERS had taken the most stories, would pursue its claims against CalPERS aggressively and seek large monetary damages.
We made a Public Records Act request to CalPERS. The thin response nevertheless makes for lively reading. It shows that both Dow Jones and the New York Times are loaded for bear. If nothing else, be sure to read the letter from Dow Jones’ litigation counsel, Patterson Bellknap Webb & Tyler, which starts on page 4 of the PDF embedded at the end of this post.
Even though the records are largely self-explanatory, let us offer some observations:
The Dow Jones nastygram is in a league of its own. I’ve seen quite a few demand letters in my day, and I’ve never seen anything remotely like this one. Neither have any of the lawyers and legally-savvy people I’ve asked to look at it. And even though the New York Times didn’t lay down the law in such explicit detail, the short note from its counsel to CalPERS CEO Marcie Brown was also exceedingly firm.
The reason for such aggressive postures, as we’ve set forth longer form in earlier posts, is that copyright law is extremely favorable to copyright holders. It is inconceivable for CalPERS to get out of this mess if the publishers pursue their claims, and Dow Jones and the New York Times have already started down that path.
CalPERS is looking at easily $30 million of damages. An expert had said that Dow Jones had gotten eight figure settlements in similar cases. We had compared the CalPERS violation to a 2003 case, Lowry’s Reports, Inc. v. Legg Mason Inc, in which Lowry’s was awarded $19.2 million in damages. If you read a recap of the legal issues, you will see that Lowry’s pursue copyright claims only, which allow for damages of up to $150,000 per violation for willful infringement.
If you read the letter from Patterson Bellknap to CalPERS, it asserts another basis for damages in addition to copyright infringement, which allows publishers to seek either statutory damages of $750 to as much as $150,0000 in the case of willful infringement per copyrighted work.
CalPERS is also liable for damages due to having stripped out “copyright management information” under the Digital Millennium Copyright Act. The damages are up to $25,000 plus attorney’s fees per each stripping of the copyright information from a copyrighted work. As mind-boggling as additional damages of up to $25,000 per copyrighted work seems, the language suggests that it might be possible to have more than one stripping of copyright management information per work, depending on how the publisher incorporated it.
by Yves Smith, Naked Capitalism | Read more:
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[ed. Uh oh. See also: The Pension Fund That Ate California]
