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Saturday, September 27, 2014

Intellectual Property Infringement as Vandalism (Part 4)

This is the fourth and last part of my post on my new co-authored piece Intellectual Property Infringement as Vandalism (the first part is here, the second here, and the third here.

While, as discussed previously, a number of people advocate for intellectual property to receive the same level of protection as property, few would openly say that it should receive more. In the discussions about intellectual property as property, the latter is generally viewed as a ceiling in that category. One would therefore expect at first blush that when it comes to sanctions, intellectual property infringement would at most be punished at the same level as property violations. Our paper shows that intellectual property infringement bears the most resemblance to vandalism and trespass. In the realm of sanctions, however, not only are the statutory criminal and civil sanctions generally higher for intellectual property infringement than those for vandalism, they are also higher than for downright property theft.

One of the ways to make a comparison is to imagine a hypothetical good of a certain value and examine how it would be treated under intellectual property versus property law. As will become apparent, this exercise is not without its problems and perils, but it is informative nonetheless. Let us assume that an individual distributes a song illegally to 1,001 other individuals. The song would normally cost $1 to download legally. Had all 1,001 individuals who thus obtained illegal copies bought the song in a legitimate fashion, its owner would have earned $1,001. That being said, in this type of situation, undoubtedly not all 1,001 people would have actually bought the good, so the harm to the song owner is lower than that. Furthermore, one could argue that this distribution may constitute a proximate cause for future redistributions, which would bring about greater harm. The extent of this redistribution and of the role that the initial distributor played in their causation are difficult to predict, as is the number of people who would or would not have bought a given song. As a matter of approximation, let us therefore proceed with the figure of $1,001 for the harm (the high end) but with no regard for subsequent harm involving redistribution. Indeed, that is the figure that copyright law would use to evaluate the gravity of the offense. Whether the action was taken for profit or not, a person guilty of this violation could go to prison for up to a year and be fined up to $100,000. If that individual distributed the song to 2,501 people (thus causing a potential harm of $2,501), she would face a maximum sentence of five years if it was done for profit or three years if it was not. She could also be fined up to $250,000.

What do maximum sentences look like in the context of theft and vandalism for offenses that deprive an owner of $1,001 and $2,501 of his property, respectively? Here are the maximum figures for theft:

Theft

$1,001

$2,501

California

One year prison, $5,000 fine

One year prison, $5,000 fine

New York

Four years prison, $5,000 or double profits fine

Four years prison, $5,000 or double profits fine

Texas

One year prison, $4,000 fine

Two years prison, $10,000 fine

As one can see, the possible fines for intellectual property offenses (i.e., $100,000 for the $1,001 value, $250,000 for the $2,501 value) vastly outpace the fines for property offenses. When it comes to prison offenses, the sentences on the intellectual property side (one year for the $1,001 value, five years for the $2,501 value) are the same as or higher than all but one of the six possibilities in the table above (New York at $1,001 has a higher prison sentence). Meanwhile, here are the figures for vandalism:

Vandalism

$1,001

$2,501

California

One year, $50,000

One year, $50,000

New York

Four years

Seven years

Texas

One year, $4,000

Two years, $10,000

 Again, the fines for intellectual property offenses greatly exceed any of the ones for vandalism. The prison sentences are generally either the same for intellectual property offenses or higher, except in New York where vandalism leads to higher maximum prison sentences at both values. 

When it comes to offenses under the DMCA, as mentioned previously, the maximum penalty for a first offense is a five-year prison sentence and $500,000 in fines (figures that are not connected in the statute to the size of the economic harm). Here is the comparison to trespass on land:

Trespass

 

California

$100 fine

New York

Fifteen days in prison, $250 fine

Texas

180 days in prison, $2,000 fine

Both the maximum prison sentence and fines that the DMCA carries are vastly larger than the possible penalties for trespass.

Overall, the pattern emerges that we do not actually treat intellectual property like property but rather often provide the option of harsher punishments for offenses against the former—sometimes dramatically so—than against the latter. This disparity is made more extreme when one considers the differences in the commission of the acti rei for property offenses as opposed to those typically related to intellectual property infringement. For instance, to return to the earlier hypothetical, distributing a song to thousands of people need take no more than a few mouse clicks. Within seconds, an individual can make himself eligible for the highest sanctions under the criminal copyright laws. Within a few more, he may have committed a second, separate offense that carries its own penalties. Meanwhile, stealing or vandalizing high-value goods generally takes quite a bit of effort and/or time (and may involve the use of force). When we consider the situation focusing on mens rea, the illicit distributor of files may be acting maliciously for five seconds and then even realize that he acted inappropriately. With copyright infringement, a mens rea of very short duration can incur significant sanctions. After violations are committed and discovered, a prosecutor in a copyright case has a lot of discretion in how to stack charges and get offenders to agree to harsh plea bargains because they are intimidated by the high maxima they face.

The disparities that we see between the property and intellectual property regimes may not be driven so much by a reasoned conclusion that intellectual property infringement is worse for society or more morally culpable than theft. Rather, as an initial matter, sanctions are often higher across contexts at the federal level than the state level for similar offenses. Second, owners of copyrighted (and trademarked) goods have exerted a lot of pressure into the political process to maximize sanctions through a variety of bills over the years. While the argument that intellectual property should be treated like property has been used many times to continue to increase sanctions, we show that bringing intellectual property fully in line with property in the arena of sanctions would actually likely mean that the sanctions for the former should be decreased rather than increased. 

Posted by Irina Manta on September 27, 2014 at 06:59 PM | Permalink

Comments

Interesting series, Irina. Two thoughts.

First, can you say more about why you base your comparison on statutory maximum punishments? In federal criminal law, actual sentences are based on guideline calculations, not the statutory max. So to make the most helpful comparative argument, I would think you should make it based on the guidelines ranges rather than the theoretical statutory maximum punishments. The latter can be orders of magnitude greater than the former, so it's potentially a significant difference.

Second, it might be worth considering the following deterrence-based argument in favor of higher punishments for copyright violations. Unlike laws on physical property theft, criminal copyright laws are almost never enforced. Actual prosecutions are extraordinarily rare, which is especially noteworthy given how widespread the criminal acts are. The argument then goes that the law properly adopts a higher punishment to try to get some deterrence out of the mere fact of prohibition even absent actual prosecutions. In other words, the argument runs, higher theoretical punishments are a good idea because the law is comparatively under-enforced. From a utilitarian perspective, a one-in-a-million chance of being prosecuted for a minor offense isn't going to deter anyone; a one-in-a-million chance of being prosecuted for a serious felony might actually give people some pause. To be clear, I'm not endorsing the argument here; I'm just stating the argument. But I think it's an argument worth considering.

Posted by: Orin Kerr | Sep 28, 2014 11:11:14 PM

Thanks, Orin. On the first point, we did take that into consideration. This was, however, the cleanest way to go about comparing. Otherwise, issues arise regarding prosecutorial discretion, charge stacking, jury reactions, and a number of other factors that could influence the actual sentences.

On the second point, our focus in this piece was not so much on optimal deterrence but on how the law treats a thief versus an infringer. (As an aside, this last argument is highly problematic more generally because it would virtually always justify having high sentences so that the government can spend fewer resources on apprehending and prosecuting criminals even when their identities are knowable.)

Posted by: Irina Manta | Sep 30, 2014 7:15:14 PM

Irina, thanks for the response. If you don't mind, here's another round....

On the first point, I'm not sure why that would be the case. Much of the point of the guidelines is to make sentences "clean": they minimize the impact of prosecutorial and judicial discretion, charge stacking, and jury reactions. Under the guidelines, what was charged and how the jury responded is much less important than what actually happened. (This is a point of criticism of the guidelines, but that's another matter.) Given that the statutory max penalties are so different from what actually ends up happening under the guidelines, I think it's problematic to make the comparison based on max penalties

On the second point, I don't think the argument would virtually always justify having higher sentences. There are also retributive limits on punishment: in short, punishment should not go beyond what justice requires. Because those arguments apply when punishments are actually awarded, the deterrence argument I have described would be limited to crimes that are rarely enforced. You see a version of this argument in Neal Katyal's 2001 Penn article, and earlier statutory enactments, punishing computer crimes more harshly than physical crimes given that the former tend to be harder to investigate. As the risk of punishment goes down, the argument runs, the severity of punishment should go up in order to deter the misconduct. That's the argument, at least.

Good luck with the article, I look forward to seeing it in print.

Posted by: Orin Kerr | Sep 30, 2014 8:22:00 PM

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