China and default

No, I’m not talking about the U.S. defaulting on the enormous amount of debt it owes to China.  I’m talking about the relatively small matter of $2.3 billion that a California district judge levied against China as a sovereign government for copyright infringement. As part of a default judgment, no less:

About a year after Cybersitter sued the Chinese government and several Asian OEMs for allegedly copying its code to create the “Green Dam” software, a U.S. federal judge has allowed the $2.3 billion suit to proceed.

Judge Josephine Staton Tucker, a California district judge, entered a judgement of default against the People’s Republic of China on Wednesday, after PRC officials failed to respond to the ruling. Although the PRC’s embassy sent a letter to the U.S. State Department protesting Cybersitter’s suit, such a letter did not qualify as a formal response.

The National Law Journal has additional coverage here.

My guess is that this suit is going to generate a lot of headlines and go absolutely nowhere (at least against China — the co-defendants may not be so lucky).  As a matter of law, China has a powerful argument for sovereign immunity, no matter what District Judge Josephine Tucker’s interpretation of the U.S.’ own Foreign Sovereign Immunities Act (FSIA) is.  And practically speaking, there’s pretty much no way that Cybersitter is going to be able to collect on this default judgment.  No doubt it will be tossed back and forth in official diplomatic communications for a while, but it’s quite doubtful that any money will ever change hands.  Unless, of course, one speaks of the money China will continue to pay the U.S. for Treasuries.

Oh wait

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