RIAA’s Damages Theory Shot Down by Court: Download does not equal Lost Sale

In the context of a restitution motion, in United States of America v. Dove, the RIAA’s "download equals lost sale" theory has been flatly rejected.

In a 16-page opinion, District Judge James P. Jones, sitting in the Western Disrict of Virginia, denied the RIAA’s request for restitution, holding the RIAA’s reasoning to be unsound:

"It is a basic principle of economics that as price increases, demand decreases. Customers who download music and movies for free would not necessarily spend money to acquire the same product. Like the court in Hudson, I am skeptical that customers would pay $7.22 or $19 for something they got for free. Certainly 100% of the illegal downloads through Elite Torrents did not result in the loss of a sale, but both Lionsgate and RIAA estimate their losses based on this faulty assumption.

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…… "Those who download movies and music for free would not necessarily purchase those movies and music at the full purchase price…….see Hudson, 483 F.3d at 710 (expressing doubt that a customer who purchased $86,000 worth of counterfeit Microsoft products would have paid the full purchase price of $321,000 for the same number of copies of the legitimate version)…….."

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