MaxwellKennerly

I'm the author of the article. Let me clarify (this is hinted at with the asterisk footnote at the bottom of the post) what happened here: the record company elected, under the copyright statute, not to prove any actual damages and instead use "statutory damages." At that point, they didn't need to prove anything at all other than "infringement," which would include his own use of the music and of his making them available to others, regardless of how much infringement there really was.

That's part of what's so preposterous about our copyright regime: it permits copyright holders to elect, at their discretion, to pursue an amorphous claim with fantastically huge damages that doesn't require they prove much.

It's like if a slip and fall plaintiff could elect "statutory damages" of millions of dollars if they proved nothing more than that the defendant spilled something on the floor. Such would be swiftly declared unconstitutional.

If by "people behind the LLC," you mean the investors, then, yes, their liability is typically limited.

I write "typically" because investors can be liable if either (1) they participated in the infringement or (2) a court decides to "pierce the corporate veil," which is rare, but can happen if an investor abuses an LLC (undercapitalizing it, disregarding corporate forms, etc) for the purpose of avoiding liability.

To answer two questions in this thread: a number of the media liability policies include copyright infringement, though typically only of text (and sometimes images), with specific exclusion of hosting media like MP3s or DVDs, and an exclusion for intentional copyright infringement. That is to say, they're geared more for someone who exceeds the bounds of fair use than for The Pirate Bay.

As for anonymity, though the LLC is an independent entity which can conduct its own business and enter into its own contracts, and thus can keep a name out of its general business, in the event of a lawsuit most courts will permit discovery into the operations / management of the LLC, and sometimes even into the ownership. There's no specific legal protection for anonymity for incorporated businesses; the only concrete anonymity protection comes from various First Amendment doctrines, which usually don't apply to commercial activities.

There's defamation-specific insurance out there, typically called "media liability insurance," which fills that need. I believe Chubb Insurance just released a new "MediaGuard" policy that's supposed to have pretty broad coverage in that area.

For reference, there are two main risks covered by liability insurance: "defense" and "indemnity." The former pays the costs of a legal defense, the latter pays a settlement / verdict. Most media liability insurance policies cover both, but can charge different premiums based on the "retention" for defense and/or indemnity, i.e. how much you have to spend before the insurance kicks in.

If the big worry is paying lawyers to defend a "frivolous" suit, then focus on the former; if the big worry is a "large verdict," then focus on the latter. A common way to save on the premium is to have a sizable retention -- like $20,000 or more -- but then have good coverage after that. If you get sued, you might have to eat the first $20k in legal fees, but won't get bankrupted by the legal fees or the verdict.

I'm the author; thanks for reading and let me address it "go[ing] a bit far."

In the context of Hacker News readers (presumably startups looking for funding and with employees) there are many good reasons for setting up an LLC, including limiting liability if one of those employees gets sued, and limited contractual liability. However, the point I was getting at is that the LLC doesn't totally shield you from liability, a misconception that has brought a lot of trouble to people who played fast and loose with their conduct and ended up staring down the barrel of potential personal liability.

The core point is: don't try to "dodge" liability. Instead, take steps to reduce the likelihood of causing harm and get a good insurance policy.