The case of the day is Blizzard Entertainment, Inc. v. Bossland GmbH, from the Landgericht Leipzig. It came to my attention thanks to eagle-eyed reader Lukas Heinemann. Blizzard had a $8 million default judgment against Bossland from the U.S. District Court for the Central District of California. The case arose out of alleged violations of the Digital Millennium Copyright Act. Blizzard sought recognition and enforcement in Germany.
The DMCA prohibits circumventing technical measures meant to prevent copyrighting of electronic copyrighted material—music, videos, computer games or other computer programs, etc. And it provides for statutory damages of at least $200 per violation, at the copyright holder’s option. Blizzard had opted for statutory damages, as many copyright holders do, because it can be difficult or impossible to prove actual damages. The US judge, at the request of Blizzard, had included the following text in the judgment: “This amount is not punitive in nature.” If only wishing made it so.
The German court refused to recognize the US judgment on the grounds that it violated the ordre public. The German court held that the damages were in fact punitive, and German courts will not enforce US punitive damage awards. Indeed, they may not authorize the central authority to serve a summons in a US case claiming punitive damages, on the grounds that the case is not “civil or commercial” and is thus outside the scope of the Service Convention.
Blizzard was plainly aware of the trouble it would face in Germany—that’s why it included the “not punitive” language in its proposed order. Statutory damages, in general, pose a difficult problem. They often seem to serve two purposes. First, in many cases it is legitimately difficult to quantify damages, and so statutory damages are, in a sense, meant to approximate compensatory damages, just as contractual liquidated damages are meant to approximate compensatory damages. On the other hand, statutory damages often appear calculated to deter violations of a law rather than to compensate the plaintiff. I don’t know the details of the copyrighted works in this case, but it’s easy to imagine cases where the minimum statutory damage award can’t possibly be compensatory in light of the purchase price of a copy of the work. In any event, I think the German court was well within its rights to apply its conception of public policy here.