ComputerForensicsDigest.com

Brief Summary: After a bench trial, a judgment order in excess of $6 million was entered against a seller of PlayStation "mod chips," based in part on defendant's destruction of relevant electronic data.

Facts: Beginning in 2002, Steven Filipiak sold hardware ("mod chips") and software designed to enable purchasers to play copied games on their Sony PlayStations. Filipiak's actions came to the attention of Sony, which sent him a cease-and-desist letter. Filipiak then signed an agreement with Sony that he would cease selling his "mod chips" and copying software. A few days later, the parties entered into a consent judgment.

Despite the agreements, however, Filipiak secretly continued to sell his infringing products. Sony became aware of Filipiak's conduct a week later and notified him that it was withdrawing from the consent agreement. The parties negotiated a new Consent Judgment that provided for the calculation of damages; one provision of the new agreement was the preservation of computer files by Filipiak and the production of such files to Sony.

Upon receipt of a "business" hard drive from Filipiak, a computer forensics expert determined that thousands of electronic files had been destroyed during the three days prior to the production of the hard drive. Included among the destroyed files were sales records for the infringing items.

Issue(s): Among other things, what is a reasonable estimate of the number of infringing products sold by Filipiak, and what amount of damages should be assessed for each?

Ruling: Based on extrapolations from non-deleted electronic records, the Court estimated that prior to the initial consent agreement on June 12, 2004, Filipiak sold 7,039 infringing products, and 155 afterwards. The court assessed Filipiak $800 for the each product sold before June 12 and $2,500 per product thereafter, resulting in a total damage award of $6,018,700.

Rationale: The court determined that its estimate of the number of infringing products sold by Filipiak was reasonable, particularly given the defendant's own conduct in destroying relevent electronic records. The court also justified the significant increase in the post-June 12 damage award on the grounds that Filipiak was in direct violation of his agreement with Sony and had engaged in the destruction of evidence after he had promised not to do so.