Advanced Copyright Issues on the Internet - Fenwick & West LLP

found that Filipiak knew at the time he was selling them that the sale of the mod chips wasillegal under the DMCA. Filipiak signed an agreement with SCEA that he would stop selling themod chips, but nevertheless willfully violated the agreement and continued to sell them.Thereafter, he signed a stipulated consent judgment and injunction that prohibited him frommarketing or selling the mod chips and agreed to pay $50,000 in damages, but still continued tosell the mod chips surreptitiously. When he was caught by SCEA doing so, he admitted that heshouldn’t have been doing so and entered into a second consent judgment. 987Based on various evidence, the court found that Filipiak had sold a minimum of 7,039circumvention devices and proceeded to adjudicate the amount of statutory damages that Filipiakshould pay. The court first ruled, by analogy to a statutory damages case under the FederalCommunications Act, that Section 1203(c)(3)(A) authorizes a separate award of statutorydamages for each device sold. 988 Because there were no cases construing what “just” meansunder Section 1203(c)(3)(A), the court looked to cases construing the term under the generalstatutory damages provision of Section 504(c) of the copyright statute. Under the Section 504(c)case law, courts consider the following factors in determining the amount of a damages award:the expense saved by the defendant in avoiding a licensing agreement; profits reaped by thedefendant in connection with the infringement; revenues lost to the plaintiff; the willfulness ofthe infringement; and the goal of discouraging wrongful conduct. 989 Applying the factors, andparticularly considering the willful nature of Filipiak’s violations, the court awarded statutorydamages of $800 per device sold before Filipiak entered into the first agreement with SCEA, andthe maximum of $2500 per device sold or shipped thereafter, for a total award of $5,631,200. 990(ii)Sony Computer Entertainment v. DivineoThe facts and rulings of the court in Sony Computer Entertainment America, Inc. v.Divineo 991 are reported in Section II.G.1(m)(19) above. As a remedy for the DMCA violationsfound by the court, the plaintiff elected statutory damages. The court determined that thedefendant had sold a total of 10,012 circumvention devices, and that sales of the devicesconstituted willful infringement, at least with respect to those sales after the filing of the lawsuitin 2004. Although the defendant had decided to stop selling the HDLoader software in early2005, the defendant offered no credible explanation for its decision to continue selling its othercircumvention devices after that point. Accordingly, the court awarded enhanced damages of$800 per device for sales after the first quarter of 2005 (an estimated 2,913 devices) and theminimum damages of $200 per device sold before that time, for a total statutory damages awardof $3,750,200. 992987988989990991992Id. at 1070-74.Id. at 1074.Id. at 1074-75.Id. at 1075-76.457 F. Supp. 2d 957 (N.D. Cal. 2006).Id. at 966-67.- 219 -