The world’s most powerful courts are once again dealing with a controversial case involving the sale of books online.
The case between Penguin Random House and a group of authors and publishers has generated a storm of controversy as lawyers from both sides argued for years about what the terms of the deal were.
In the end, the judges sided with the publishers, which included Amazon.
But in a landmark decision Tuesday, they overturned the copyright holders’ decision to impose a hefty fine on the publisher for copyright infringement.
“We conclude that Penguin Random is not liable for copyright infringements, which, as a result, result in a monetary award of $5,000 per infringement,” the judges wrote.
In other words, the fine was “grossly disproportionate” to the amount of infringement.
The decision comes as a number of major tech companies including Facebook, Google and Apple are facing pressure from digital rights groups to pay up to $100 million to book authors and authors of non-fiction books that have been published online.
Those companies have been accused of using a loophole in the Copyright Act that allows them to avoid paying copyright holders and to claim that the fines are too high.
The ruling was the first major ruling in the case since the courts ruled in October that publishers could avoid paying fines by paying the authors for books that were published without their consent.
In an opinion piece for The Wall Street Journal, lawyer Daniel P. Greenberg, a professor of law at the University of Southern California, argued that the ruling in Tuesday’s ruling is a victory for the publishers and authors.
“The Copyright Act’s penalties are too low,” Greenberg wrote.
“If they had been higher, Penguin would have faced fines and even legal action from copyright holders.”
Greenberg said that the courts had set a new standard in the way that they handled copyright infringement cases.
“No one is surprised that a large publisher has taken a dim view of the Copyright Office’s approach,” he said.
“What is new is that a court has made it clear that publishers can be held liable for what they have done.”
The ruling comes after the copyright owners in a class-action lawsuit sought $150 million from Penguin Random in September to settle the dispute.
“Penguin is entitled to recover any damages awarded to its authors or the public, including but not limited to punitive damages, attorneys’ fees and expenses, and attorney’s fees, if it prevails in this case,” the ruling states.
The court ruled that Penguin would not be liable for the damages that it could recover from authors who were not involved in the lawsuit.
“It is the duty of the publisher to remedy the harm caused by infringement by its authors,” the court said.
Greenberg argued that Penguin had already paid authors and copyright holders millions of dollars for book royalties in the past.
“While Penguin has not paid any authors for their work, Penguin has made substantial payments to its own authors, including those who are not represented by counsel,” Greenberg said.
In response to the ruling, the copyright holder said it is confident that the outcome will be reversed and that it will appeal the decision.
Penguin Random was not immediately available for comment.