back to article Sony can sue distributor for sales value of stolen goods, not just cost

A distributor which lost a consignment of PlayStation memory cards must compensate Sony at the sale price of the cards and not their cost to manufacture, the Court of Appeal has ruled. Sony Computer Entertainment UK used Cinram Logistics for the storage and distribution of some of its goods. Seventeen thousand memory cards for …

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  1. Neil

    Therefore...

    Sony can compensate me for the cost of a holiday, after their shitty memory card failed in my camera, losing me all of the pics of my kids at Disneyworld?

  2. Mark

    Only acceptable if

    This is only acceptable if the retailer is suing Sony for the sale loss. Sony can then get their money back from the packaging company.

    If Sony aren't going to be out of pocket by this amount, then Sony are getting unjust enrichment and the extra should not go to Sony but to court costs and the government.

  3. Matt Thornton
    Gates Horns

    Not to mention...

    ... this being a direct example of the way in which consumers are constantly ripped off by the big manufacturers. My rough calculations indicate the cost per unit is 3.30, Game were paying around 11 for them, and would have sold them for (depending on spec) about 15. That's a 450% ish markup.

  4. Big Dave

    Sony are evil

    Maybe not more than all the other big companies that now see it as normal to use litigation as a new revenue stream, but evil all the same.

    It scares me more and more each day what these companies think of as acceptable and normal.

    At least when they are sueing other companies Sony are laying off bankrupting the families of 12-year-old file-sharers.

  5. Svein Skogen
    Flame

    Naturally...

    Naturally this means that Sony is not only liable for the time spent on cleaning up their rootkit fiasco, but also for the lost profits this caused.

    //Svein

  6. Seven_Spades
    Thumb Down

    Wrong Decision- kinda

    It is quite correct that Sony should be able to sue for loss of profit. However, they should prove their loss, since Sony is suing the distribution company. It makes no sense to allow someone to sue you for something they cannot prove they have lost. To require the person being sued to prove anything is a reversal of Habeas Corpus.

  7. Anonymous Coward
    Anonymous Coward

    @Mark

    I think the point is that they are out of pocket for that amount, the sale was made at the value the retailer (who must have considered it fair) paid. Not for the cost of manufacture. There was no depreciation involved, so why should Sony lose out on the profit they would have made if the packaging company had been more competent in holding onto their customers goods?

    I can't stand Sony personally, it's my opinion they tend to manafacture overpriced gimicks with shoddy construction nowadays.

    I know if I purchased a brand new television and it was stolen on the day it was delivered to me I would expect a full reimbursment from my insurance company, not the price it cost to manufacture the television, it's not the same scenario, but it's the same principle.

  8. Anonymous Coward
    Anonymous Coward

    @ Seven_Spades

    No.

    1) WTF has habeas corpus got to do with it ?

    2)The cards were already paid for by the customer.

    The intermediary "lost" the cards which left Sony in the position of having to return the money or produce new cards for no profit. (They could have sold the new cards for the production price plus profit had they not had to replace the ones lost).

    Whichever way you spin it, Sony lost out due to the intermediary, not due to any fault of their own.

    Did the distributor have no insurance ?

    If you buy a new Ferrari and the firm transporting it to you smash it up, is it down to Ferrari to provide a new one at cost price to the transporters ? Of course not. If the transporters lost an item worth full price, the manufacturer still deserves the full price, otherwise they lose out through no fault of their own.

    Can you walk into a shop and smash up a valuable item, then only pay the cost of production ?

  9. Anonymous Coward
    Anonymous Coward

    The whole article is one big "DUH!"

    Of course they can sue for the price they were being paid for them - at the point they were lost that was their market value.

    If they were lost between Sony's production facility and say a Sony stock warehouse, then at that point their value is only the production cost (maybe plus some extra for how far down the chain they had moved but that overcomplicates things here) and this argument would probably hold.

    Conversely, as others have said, if they were lost later on (if the company was instead involved in transferring from retailer to customer for example) then the value has again increased to the (kindly estimated above) sum of £15 per unit and that would be how much they would be liable for.

    Sony produces them knowing how much they can sell them for, why should they have to produce more to replace those that now cannot be sold through no fault of their own?

  10. Aubry Thonon
    Thumb Down

    C'thulhu help me, I agree with the decision.

    Company A makes a product and it costs them $5.00 to make it. The give it to Company B on consignment so that they can sell it on and give Company A $12.00 as their cut of the sale. If Company B then looses the card they had on consignment, then they are liable *for the amount Company A would have received*.

    Accepting things on consignment is great for Company B as it means they do not have to actually purchase the goods from Company A, only pass back an agreed amount on each sale. The downside is, Company B agrees to pay Company that amount - not the production costs.

    Same thing here. Sony sent some HW on consignment to be sold on to Games. If the middleman looses the HW, they are liable for the amount that Sony would have gotten out of the sale. The distributor took a bet (that nothing would happen to the consignment) and lost, and now they want to be let off the hook?

    I am not a great lover of Sony (so-so hardware, lousy attitude) but this sort of "want my cake and eat it too" attitude just pisses me off. You want the returns, you gotta pay the price when things don't go your way.

  11. Adam
    Happy

    Loss of sales - not like the music industry

    Remember that in this instance, stealing the memory cards DOES result in a loss of sale. Someone won't randomly say "Hey, black-market memory cards. I'll buy one on impulse!".

    No. In this case, someone will be offered a dodgy memory card, and this will mean they don't buy a legitimate one at the shop. Personally, I think Game could easily put together a case to sue for loss of THEIR profits too.

    This is a tangible piece of hardware that is generally a planned purchase. There are no parallels with the record industry here (although try telling Sony that!)

  12. Thomas Parrott

    Nice margin!

    Sony must be pretty upset that on top of all this the Court published their cost price! Just so we all are even more upset with just how much mark up goes on the Sony brand.

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