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I used to work for an expert witness who testified on valuations in IP infringement cases. I really lost faith in the way the US handles IP infringement in that

I used to work for an expert witness who testified on valuations in IP infringement cases. I really lost faith in the way the US handles IP infringement in that job. I know patents are contentious in tech, but sometimes I think copyright is just as bad. I know it's not a popular opinion, but seeing how things actually play out really made me feel for defendants in those cases. Regardless of what you think of the effectiveness of IP protection, the way damages are calculated (and ultimately determined by courts) is just awful. I haven't looked at the specifics of that $65M calculation, but if the real number were closer to $650k I wouldn't be surprised-- 2 orders of magnitude was a pretty typical spread between plaintiff and defendant expert witnesses' valuations in the IP cases I worked on.

fxtentacle 4y ago
Well in this case, we're talking about a industry espionage and modchip crew that has been around since the first Xbox. I personally know people who used their products and (as the result) never ever purchased a game that they played. So my experience would suggest that Xecutor modchips were really popular. I'm pretty sure $65m is a rather conservative estimate of the lost sales that they caused.
- shakes_mcjunkie 4y ago
  If the chips didn't exist though would they have actually bought every one of those games? Would they have bought the console? I doubt this is information that could actually be gathered and calculated accurately as damages.
  - deweywsu 4y ago
  - fxtentacle 4y ago
    There's likely millions of people in a situation like me. If each of them only didn't buy one single $60 game because of the modchip, then that sums up to $60 mio. I agree that pirated copy != lost sale. But if you play 20+ games and buy 0, I'm pretty sure without modchip it would even out at maybe buy+play 5 games. Plus there's games like the Zelda series that every hardcore fan will play. So for those games, I think it is fair to assume 50% of piracy would have been a lost sale. And lastly, how do you know that people didn't "buy" their cracked games? When I was traveling Asia, you could buy a modchipped Switch and bootlegged games in the same store. So then you still pay $5 for a new Switch game, it's just that the money goes to some Chinese counterfeit group, not to Nintendo.
    - gowld 4y ago
      > But if you play 20+ games and buy 0, I'm pretty sure without modchip it would even out at maybe buy+play 5 games. This is absolutely absurd. Look at the modern internet. "Free" is consumed at rates far more than 4x of "paid equivalents that existed before the free option".
      - AussieWog93 4y ago
        >This is absolutely absurd. Really? It sounds pretty much right to me. Consoles have a typical tie ratio of around 8-10 games, and people who mod their systems (who, if anything, would skew towards people who would otherwise buy _more_ games) typically buy zero.
        waffleiron 4y ago
        But people who mod their system might never have bought the system if that option wasn't available.
    - BiteCode_dev 4y ago
      > There's likely millions of people in a situation like me Unlikely. Most console users don't even know what modding mean, and among the few that do, fewer even make the step to do it. It's not trivial. It's very niche, at least in the occidental markets.
- p1necone 4y ago
  There have been periods of my life where I pirated almost every game I played. If it wasn't for piracy... I wouldn't have bought any games, because I didn't have any money to spend on them. Then Steam and Actually Having a Job happened and I didn't do that any more. I still pirate games, but it's only ones that aren't being sold any more, so I don't see who's missing out there.
  - RajT88 4y ago
    I will say, I knew many who were similar. If they pirated 100 games, maybe they would have bought a handful at retail price, even given unlimited funds. A few more on discount. Anecdata, sure. But it speaks to the point that game pirates don't really play the vast majority of what they pirate, they try them out a bit and move on mainly because the time cost is virtually nil.
  - indrora 4y ago
    Gabe Newell was absolutely right when he made it clear that piracy was a demand being unmet. I suspect part of the Steam Summer Sales being as deep as they are is to give a chance for people who can't afford AAA games normally to have a way to snag them at 80-90% off. A big AAA title makes the majority of its money in the first few months of sale, then fucks off for the rest of its lifetime, so doing deep cuts in the summer makes it profitable through volume.
    - johnwalkr 4y ago
      I like to buy them at about 50% off, and forget about them until I try to buy them again at 90% and remember that I already own it and haven’t even downloaded it yet.
- Phrodo_00 4y ago
  > I personally know people who used their products and (as the result) never ever purchased a game that they played. On the other hand, in some markets, consoles only become an option after they're unlocked and can't get any penetration without that.
shakes_mcjunkie 4y ago
Isn't it also just generally impossible to say if a sale was lost because of piracy? A pirated copy may never have actually been a sale and how would anyone know?
- jonny_eh 4y ago
  You could say the same of a stolen DVD. Would the thief have otherwise paid for the DVD? At least in the case of a physical good, you could argue that the item being stolen "may" have prevented someone else from buying it, but even then there's no guarantee.
  - tshaddox 4y ago
    That's a totally different, much simpler question. A stolen DVD is very clearly a reduction in the number of DVDs the seller can possibly sell.
    - fcsp 4y ago
      Not if it's stolen from a person who bought it, instead of a warehouse
    - jraph 4y ago
      Devil's advocate, it's not that simple. Producing a DVD is cheap, the seller can produce them for almost nothing per unit (not zero though). It could be that this stolen DVD allows N people to discover its content and buy the DVD. The seller wins from this stealing even for a small N. N could be bigger than when downloading the movie instead, because the DVD can be seen in a shelf for example. Is it fundamentally different? (it's a genuine question, I have not studied anything on the matter). The only difference I see is that almost nothing = zero when downloading the DVD's content instead of stealing the physical object. edit: I actually see a difference, there's no guarantee that a stolen DVD does produce any sale, and so there is a loss even if it is small, but I think the question is still not simple to answer.
      - deleted 4y ago
efitz 4y ago
There is a very real cost to society to provide patent and copyright. We have to have additional law enforcement, court, and prison capacity. It’s not clear at all to me that society is getting its money worth in defending essentially rent seeking behavior from big business. It’s also not clear that either patent or copyright in their current form actually “promote progress in the useful arts”. I hate the terms “intellectual property” and “piracy” because patent and copyright are not much like property at all, and because actual piracy is a crime of violence and nothing like infringement. And it’s not clear to me that the punishments inflicted are reasonable given the impact of the “crime”. Given that, I believe that we would be better off without patent or copyright, or with only a very modest time period of a couple years.
- ChadNauseam 4y ago
  How would you fund things like the discovery of new drugs, or the creation of big-budget movies, without parents and copyright respectively?
  - zozbot234 4y ago
    New drugs are one thing (though even there, prizes and academic grants are a meaningful alternative to patent protection), but do we really need big-budget movies? They seem like a total waste. Most of them have trouble ever making a profit, and that's in spite of extreme levels of copyright enforcement (at least wrt. average users, not dedicated pirates).
    - deleted 4y ago
      [deleted]
    - dahart 4y ago
      > Most of them have trouble ever making a profit If that were true, most of the big-budget movie studios would be going out of business regularly. But that isn’t happening, by and large. They do sometimes want you to think they’re not making money. Having worked in the film & games industries, I’ve witnessed some of the creative accounting that gets used. > do we really need big-budget movies? They seem like a total waste. Well, people pay for them, and our IP laws are designed to protect the business of creations and inventions. Most of the pharma industry is also peddling stuff we don’t need and is wasteful, however it is big business.
esaym 4y ago
Copyright violations can be equally bad: https://www.eff.org/cases/capitol-v-thomas https://www.eff.org/cases/capitol-v-thomas
Asooka 4y ago
Over time I have honestly went from "Copyright must be reigned in" to "Copyright must be abolished". Some limited kind of author's rights should remain, but copyright itself seems to have an entirely negative utility.
ksec 4y ago
> I know it's not a popular opinion Not sure where you get that idea, HN is pretty much Anti Patents and Copyright regardless of its merit, if there are even any from their perspective.

fxtentacle 4y ago

Well in this case, we're talking about a industry espionage and modchip crew that has been around since the first Xbox. I personally know people who used their products and (as the result) never ever purchased a game that they played. So my experience would suggest that Xecutor modchips were really popular. I'm pretty sure $65m is a rather conservative estimate of the lost sales that they caused.

shakes_mcjunkie 4y ago
If the chips didn't exist though would they have actually bought every one of those games? Would they have bought the console? I doubt this is information that could actually be gathered and calculated accurately as damages.
- deweywsu 4y ago
- fxtentacle 4y ago
  There's likely millions of people in a situation like me. If each of them only didn't buy one single $60 game because of the modchip, then that sums up to $60 mio. I agree that pirated copy != lost sale. But if you play 20+ games and buy 0, I'm pretty sure without modchip it would even out at maybe buy+play 5 games. Plus there's games like the Zelda series that every hardcore fan will play. So for those games, I think it is fair to assume 50% of piracy would have been a lost sale. And lastly, how do you know that people didn't "buy" their cracked games? When I was traveling Asia, you could buy a modchipped Switch and bootlegged games in the same store. So then you still pay $5 for a new Switch game, it's just that the money goes to some Chinese counterfeit group, not to Nintendo.
  - gowld 4y ago
    > But if you play 20+ games and buy 0, I'm pretty sure without modchip it would even out at maybe buy+play 5 games. This is absolutely absurd. Look at the modern internet. "Free" is consumed at rates far more than 4x of "paid equivalents that existed before the free option".
    - AussieWog93 4y ago
      >This is absolutely absurd. Really? It sounds pretty much right to me. Consoles have a typical tie ratio of around 8-10 games, and people who mod their systems (who, if anything, would skew towards people who would otherwise buy _more_ games) typically buy zero.
      - waffleiron 4y ago
        But people who mod their system might never have bought the system if that option wasn't available.
  - BiteCode_dev 4y ago
    > There's likely millions of people in a situation like me Unlikely. Most console users don't even know what modding mean, and among the few that do, fewer even make the step to do it. It's not trivial. It's very niche, at least in the occidental markets.
p1necone 4y ago
There have been periods of my life where I pirated almost every game I played. If it wasn't for piracy... I wouldn't have bought any games, because I didn't have any money to spend on them. Then Steam and Actually Having a Job happened and I didn't do that any more. I still pirate games, but it's only ones that aren't being sold any more, so I don't see who's missing out there.
- RajT88 4y ago
  I will say, I knew many who were similar. If they pirated 100 games, maybe they would have bought a handful at retail price, even given unlimited funds. A few more on discount. Anecdata, sure. But it speaks to the point that game pirates don't really play the vast majority of what they pirate, they try them out a bit and move on mainly because the time cost is virtually nil.
- indrora 4y ago
  Gabe Newell was absolutely right when he made it clear that piracy was a demand being unmet. I suspect part of the Steam Summer Sales being as deep as they are is to give a chance for people who can't afford AAA games normally to have a way to snag them at 80-90% off. A big AAA title makes the majority of its money in the first few months of sale, then fucks off for the rest of its lifetime, so doing deep cuts in the summer makes it profitable through volume.
  - johnwalkr 4y ago
    I like to buy them at about 50% off, and forget about them until I try to buy them again at 90% and remember that I already own it and haven’t even downloaded it yet.
Phrodo_00 4y ago
> I personally know people who used their products and (as the result) never ever purchased a game that they played. On the other hand, in some markets, consoles only become an option after they're unlocked and can't get any penetration without that.

shakes_mcjunkie 4y ago

Isn't it also just generally impossible to say if a sale was lost because of piracy? A pirated copy may never have actually been a sale and how would anyone know?

jonny_eh 4y ago
You could say the same of a stolen DVD. Would the thief have otherwise paid for the DVD? At least in the case of a physical good, you could argue that the item being stolen "may" have prevented someone else from buying it, but even then there's no guarantee.
- tshaddox 4y ago
  That's a totally different, much simpler question. A stolen DVD is very clearly a reduction in the number of DVDs the seller can possibly sell.
  - fcsp 4y ago
    Not if it's stolen from a person who bought it, instead of a warehouse
  - jraph 4y ago
    Devil's advocate, it's not that simple. Producing a DVD is cheap, the seller can produce them for almost nothing per unit (not zero though). It could be that this stolen DVD allows N people to discover its content and buy the DVD. The seller wins from this stealing even for a small N. N could be bigger than when downloading the movie instead, because the DVD can be seen in a shelf for example. Is it fundamentally different? (it's a genuine question, I have not studied anything on the matter). The only difference I see is that almost nothing = zero when downloading the DVD's content instead of stealing the physical object. edit: I actually see a difference, there's no guarantee that a stolen DVD does produce any sale, and so there is a loss even if it is small, but I think the question is still not simple to answer.
    - deleted 4y ago

efitz 4y ago

There is a very real cost to society to provide patent and copyright. We have to have additional law enforcement, court, and prison capacity. It’s not clear at all to me that society is getting its money worth in defending essentially rent seeking behavior from big business. It’s also not clear that either patent or copyright in their current form actually “promote progress in the useful arts”. I hate the terms “intellectual property” and “piracy” because patent and copyright are not much like property at all, and because actual piracy is a crime of violence and nothing like infringement. And it’s not clear to me that the punishments inflicted are reasonable given the impact of the “crime”. Given that, I believe that we would be better off without patent or copyright, or with only a very modest time period of a couple years.

ChadNauseam 4y ago
How would you fund things like the discovery of new drugs, or the creation of big-budget movies, without parents and copyright respectively?
- zozbot234 4y ago
  New drugs are one thing (though even there, prizes and academic grants are a meaningful alternative to patent protection), but do we really need big-budget movies? They seem like a total waste. Most of them have trouble ever making a profit, and that's in spite of extreme levels of copyright enforcement (at least wrt. average users, not dedicated pirates).
  - deleted 4y ago
    [deleted]
  - dahart 4y ago
    > Most of them have trouble ever making a profit If that were true, most of the big-budget movie studios would be going out of business regularly. But that isn’t happening, by and large. They do sometimes want you to think they’re not making money. Having worked in the film & games industries, I’ve witnessed some of the creative accounting that gets used. > do we really need big-budget movies? They seem like a total waste. Well, people pay for them, and our IP laws are designed to protect the business of creations and inventions. Most of the pharma industry is also peddling stuff we don’t need and is wasteful, however it is big business.

esaym 4y ago

Copyright violations can be equally bad: https://www.eff.org/cases/capitol-v-thomas https://www.eff.org/cases/capitol-v-thomas

Asooka 4y ago

Over time I have honestly went from "Copyright must be reigned in" to "Copyright must be abolished". Some limited kind of author's rights should remain, but copyright itself seems to have an entirely negative utility.

ksec 4y ago

> I know it's not a popular opinion Not sure where you get that idea, HN is pretty much Anti Patents and Copyright regardless of its merit, if there are even any from their perspective.