US lawsuit on botsoftware not recognizable in Germany – statutory damages and § 328 ZPO – Update

The Blizzard Entertainment Inc. from California failed in its attempt to have a U.S. judgment for approximately 8 million U.S. dollars declared enforceable in the Federal Republic of Germany against my client, Bossland GmbH.

The U.S. judgment was entered by the U.S. District Court of Central California as a default judgment based on Section 1203(c)(3)(A) of the Digital Millennium Act and recognizes Blizzard Entertainment Inc. This exorbitant damage is due to the fact that my client both misled her customers into copyright infringement and circumvented protective measures. DMC § 1203(c)(3)(A) thereby constitutes statutory damages of at least $200.00. The court followed presumed sales in California and thus arrived at the final amount purely by simple multiplication by the minimum damages.

In the exequatur proceedings, the plaintiff initially sought recognition, but then filed a request for arrest in the amount of $3 million. In the course of these attachment proceedings, the Regional Court of Leipzig, which now has jurisdiction (the plaintiff initially filed the action at the Regional Court of Zwickau), declared that recognition in the Federal Republic of Germany was not possible and that an attachment claim would therefore not exist.

This was decided by the District Court despite the express reference by the U.S. court that “this amount (is) not punitive in nature”, which was inserted at the request of the plaintiff, probably on the basis of Section 328 of the German Code of Civil Procedure (ZPO) and the relevant case law of the Federal Court of Justice (BGH) on “punitive damages”. While punitive damages from U.S. judgments, in particular also under § 504 Copyright Act, are generally not eligible for recognition, there have been no decisions under § 1203(c)(3)(A) DMCA so far. While § 1203(c)(3)(A) is sometimes thought to have only a deterrent effect, however, extensive reform efforts in the U.S. literature show that its punitive nature is nonetheless present. Particularly or especially if, as in the present case, no justification whatsoever is given for the amount of the damage, but pure mathematics is the basis for the calculation of the damage. This violates essential principles of German law in the Federal Republic of Germany, according to which only compensation for damage is to be made in this country, while the monopoly on punishment is reserved for the state. Foreign judgments that violate these legal ideas regularly fail the ordre public idea, even without the need for a révison au fond adverse review of the judgment. Although German law also recognizes a satisfaction function, e.g. in compensation for pain and suffering, U.S. punitive damages go much further.

In the present case, in addition to the failure to demonstrate a basis for calculating damages, it was also critical that DMCA § 1203(c)(3)(A) provided Blizzard Entertainment Inc. would very well have been possible to make concrete damage calculations and even to use certain generalizations in the process. Both would probably also have been recognizable in Germany under § 328 ZPO. However, in the present case, the greed for a particularly high claim for damages, the amount of which was not assigned any basis, probably won. As in the numerous other proceedings in Germany, Blizzard Entertainment Inc. After almost seven years of proceedings, the company has not yet submitted a single damage calculation, but has always claimed that there was damage and that this was obvious.

Pure “guesswork” of damage, without any evidence or at least comprehensible justification, is not possible in the Federal Republic of Germany. This is particularly true when, as in the present case, correspondingly blatant amounts of damages are incurred, and when, as in other cases, these regularly cause people to shake their heads. The Leipzig Regional Court dealt extensively with the inadequate reasoning of the U.S. court, which is why the main proceedings for recognition cannot reach a different conclusion.

For further questions on this extremely interesting recital as well as on similar cases, please do not hesitate to contact me by mail.

Finally, I would also like to thank the law firm Härting Rechtsanwälte, with whom I have worked on these and other cases in a spirit of trust.