Monday, August 27, 2007

Fraud?

Now we all know that recently a company, O, has been pursuing damages of alleged anime copyright infringers using bittorrent protocol. Also, the current best ISP here, Pnet, has successfully challenged the court order and the judge has ruled that they need not release their customer's private information. One interesting part of the judge's ruling was that O was not the copyright owner nor the sole licensor of all but one of the anime titles that they claim to possess. A sample of the letters they send to alleged copyright infringers can be viewed here.

From the letter, assuming that it is authentic, claims that O has the right and is authorized to pursue copyright damages -- something that has already been proven false in court. Now one might ask why does copyright law state that only the copyright owner or sole licensor may claim damages. The answer is obvious (from my limited point of view). This is to prevent duplicate claims of copyright. If one is not the owner, there is no guarantee that the owner will be compensated after one have obtained its claims. Furthermore, the owner might pursue the copyright resulting in duplication. If one is not the sole licensor, one cannot claim that its business is harmed as one cannot prove that the alleged infringer will not buy products from one's competitors.

Hence entry 1 and 4 in the sample letter is in-substantiated. The question is since it is obvious that O knows it is not in a position to pursue damages but claim to be. For those that have paid, is this tantamount to fraud?

A simple quick search reveals a definition of criminal fraud from which I quote, "The term 'fraud' is generally defined in the law as an intentional misrepresentation of material existing fact made by one person to another with knowledge of its falsity and for the purpose of inducing the other person to act, and upon which the other person relies with resulting injury or damage. [Fraud may also include an omission or intentional failure to state material facts, knowledge of which would be necessary to make other statements not misleading.]"

Now those unfortunate ones that have paid up were paying to someone that:
1. Does not have the right to claim damages
2. Claimed to have such a right
3. Quoted criminal law when one does not have the power to initiate.
4. Cannot guarantee that the real copyright owner will not pursue damages in future.
5. Sent a letter threatening legal action which may result in agreeing to pay damages under duress
6. Threatened legal action by quoting criminal law when in fact legal action by it will be a civil suit.

Well for copyright infringers, I guess it is the only correct thing to do is to pay the copyright owner damages, if they do ask for it. But definitely not a 3rd party. Hence, have they been defrauded? If the high court rejects company's O appeal against Pnet, I think it is high time those that paid up earlier file a police report.

Read more about it here: [1] [2] [3]

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