Ignoring RIAA Lawsuits Cheaper Than Going to Trial

Jammie Thomas-Rasset and Joel Tenenbaum captured the nation's attention when they were defendants in the RIAA's first two trials against accused online infringers. But here's the mind-warping reality: both defendants would have been far better off monetarily if they had simply ignored the complaint altogether and failed to show up in court.

That counterintuitive logic played out again this week in Massachusetts, where federal judge Nancy Gertner issued four default judgments against accused P2P file-swappers who never bothered to respond to the charges against them. Their failure to appear meant an automatic loss, and though the judge does have some discretion in setting penalties, judges often pick the minimum awards in such cases.

That was true in all four cases, where Gertner accepted the record labels' claims and awarded them the minimum statutory damages of $750 per song. The defendants were accused of downloading an average of ten songs, putting total awards in the $7,500 range, in addition to a few hundred more for court costs.

Having $7,500 in damages assessed against you by a federal court is no picnic, but it pales in comparison to the two twenty-somethings who actually showed up to court, got attorneys, went through a multiyear process and a nationally covered trial, and came out the other side owing far more money.

The chart below illustrates the point by graphing the various damage awards per song:



When it comes to total damages, the disparities are even greater. Thomas-Rasset's retrial ended up with a $1.92 million award, while Tenenbaum faces $675,000 in damages. Those who didn't show up owe around $7,500.

In fact, this might well have been Tenenbaum's fate. He was actually included in a massive complaint consolidated into a single docket, and it was only when he showed up to a court hearing that Gertner stopped the default judgment proceeding against him and actually helped find him a lawyer—Harvard Law prof Charles Nesson. Now, Tenenbaum faces a life-altering damage award and the prospect of bankruptcy if not reduced or overturned on appeal.

Update: I was interested more in what happens within the federal court system for this article, but several commenters rightly point out that "not showing up" isn't the cheapest way out of such situations. Settling with the RIAA usually leads to payments of between $3,000 and $5,000, lower than the default judgments issued here by Judge Gertner. Convincing a jury that you're innocent could be cheaper still (if you find a pro bono lawyer), though it comes with certain obvious risks.

Jury Awards $675K in Boston Music Downloading Case

A federal jury on Friday ordered a Boston University graduate student who admitted illegally downloading and sharing music online to pay $675,000 to four record labels.

Joel Tenenbaum, of Providence, R.I., admitted in court that he downloaded and distributed 30 songs. The only issue for the jury to decide was how much in damages to award the record labels.

Under federal law, the recording companies were entitled to $750 to $30,000 per infringement. But the law allows as much as $150,000 per track if the jury finds the infringements were willful. The maximum jurors could have awarded in Tenenbaum's case was $4.5 million.

Jurors ordered Tenenbaum to pay $22,500 for each incident of copyright infringement, effectively finding that his actions were willful. The attorney for the 25-year-old student had asked the jury earlier Friday to "send a message" to the music industry by awarding only minimal damages.

Tenenbaum said he was thankful that the case wasn't in the millions and contrasted the significance of his fine with the maximum.

"That to me sends a message of 'We considered your side with some legitimacy,'" he said. "$4.5 million would have been, 'We don't buy it at all.'"

He added he will file for bankruptcy if the verdict stands.

Tenenbaum's lawyer, Harvard Law School professor Charles Nesson, said the jury's verdict was not fair. He said he plans to appeal the decision because he was not allowed to argue a case based on fair use.

The Recording Industry Association of America issued a statement thanking the jury for recognizing the impact illegal downloading has on the music community.

"We appreciate that Mr. Tenenbaum finally acknowledged that artists and music companies deserve to be paid for their work," the statement said. "From the beginning, that's what this case has been all about. We only wish he had done so sooner rather than lie about his illegal behavior."

Tenenbaum would not say if he regretted downloading music, saying it was a loaded question.

"I don't regret drinking underage in college, even though I got busted a few times," he said.

The case is only the nation's second music downloading case against an individual to go to trial.

Last month, a federal jury in Minneapolis ruled that Jammie Thomas-Rasset, 32, must pay $1.92 million, or $80,000 on each of 24 songs, after concluding she willfully violated the copyrights on those tunes.

The jury began deliberating the case Friday afternoon.

After Tenenbaum admitted Thursday he is liable for damages for 30 songs at issue in the case, U.S. District Judge Nancy Gertner ruled that the jury must consider only whether his copyright infringement was willful and how much in damages to award four recording labels that sued him over the illegal file-sharing.

In his closing statement Friday, Nesson repeatedly referred to Tenenbaum as a "kid" and asked the jury to award only a small amount to the recording companies. At one point, Nesson suggested the damages should be as little as 99 cents per song, roughly the same amount Tenenbaum would have to pay if he legally purchased the music online.

But Tim Reynolds, a lawyer for the recording labels, recounted Tenenbaum's history of file-sharing from 1999 to 2007, describing him as "a hardcore, habitual, long-term infringer who knew what he was doing was wrong." Tenenbaum admitted on the witness stand that he had downloaded and shared more than 800 songs.

Tenenbaum said he downloaded and shared hundreds of songs by Nirvana, Green Day, The Smashing Pumpkins and other artists. The recording industry focused on only 30 songs in the case.

The music industry has typically offered to settle such cases for about $5,000, though it has said that it stopped filing such lawsuits last August and is instead working with Internet service providers to fight the worst offenders. Cases already filed, however, are proceeding to trial.

Tenenbaum testified that he had lied in pretrial depositions when he said his two sisters, friends and others may have been responsible for downloading the songs to his computer.

Under questioning from his own lawyer, Tenenbaum said he now takes responsibility for the illegal swapping.

"I used the computer. I uploaded, I downloaded music ... I did it," Tenenbaum said.

Associated Press writer Jeannie Nuss contributed reporting from Boston.

Musicslu.com - A New Model for the Music Business

French Lawmakers Reject Internet Piracy Bill

French legislators on Thursday rejected legislation to permit cutting off the Internet connections of people who illegally download music and films. But a stubborn government plans to resurrect the bill for another vote this month.

Backers of the bill -- record labels, film companies and law-and-order parliamentarians -- couldn't rally the needed support during in a near empty lower chamber ahead of the Easter holiday. Lawmakers voted 21 to 15 against it.

The measure would have created a government agency to track and punish those who pirate music and film on the Internet. Analysts said the law would have helped boost ever-shrinking profits in the entertainment industry, which has struggled with the advent of online file-sharing that lets people swap music files without paying.

The government, intent on gaining the upper hand in piracy, managed to slip the measure into an April 28 special session devoted to initiatives by President Nicolas Sarkozy's conservative UMP party.

The president's office reaffirmed Sarkozy's wish to get the law passed "as quickly as possible."

He "does not plan to renounce this whatever the maneuvers" to try to stop the bill's passage, a statement said.

Music labels, film distributors and artists -- who have seen CD and DVD sales in France plummet 60 percent in the past six years -- almost universally supported the measure, hailing it as a decisive step toward eliminating online piracy and an example to other governments. Artists' groups in France have said the future of the country's music and film industries depends on cracking down on illegal downloads, and the legislation received industry support from around the world.

"It is disappointing that the law was not confirmed today," said London-based John Kennedy, Chairman and CEO of the International Federation of the Phonographic Industry, which represents the recording industry worldwide and supported the bill.

Legislators and activists who opposed the legislation said it would represent a Big Brother intrusion on civil liberties -- they called it "liberticide" -- while the European Parliament last month adopted a nonbinding resolution that defines Internet access as an untouchable "fundamental freedom."

Opponents also pointed out that users downloading from public WiFi hotspots or using masked IP addresses might be impossible to trace. Others called its proposed monitoring structures unrealistic.

"It is a bad response to a false problem," said Jeremie Zimmerman, coordinator of the Quadrature du Net, a Paris-based Internet activist group that opposed the bill, calling it "completely impossible to apply."

He said the bill's rejection is proof of a widespread sense that it was a draconian approach.

Under the legislation, users would receive e-mail warnings for their first two identified offenses, a certified letter for the next, and would have their Web connection severed, for as long as one year, for any subsequent illegal downloads.

French Culture Minister Christine Albanel had said the bill did not aim to "completely eradicate" illegal downloads but rather to "contribute to a raising of consciousness" among offenders.

"There needs to be an experiment," said Pierre-Yves Gautier, an Internet law expert at the University of Paris, noting the plummeting profits of the entertainment industry. "Frankly, it's worth it."

A Shared Culture

Michael Moore on File Sharing

Web 2.0 and the Future of the Music Business

Examining Where the Industry Went Wrong

17,000 Illegal Downloads Don't Equal 17,000 Lost Sales

If a song has been downloaded from a torrent site 17,000 times, it doesn't necessarily equal 17,000 lost sales, according to US District Judge James P. Jones. The judge recently ruled against using this kind of reasoning in determining restitution in a criminal copyright case, though it doesn't necessarily affect civil cases against downloaders.

Record companies cannot collect restitution for every time a song has been illegally downloaded, a US District judge has decided. Judge James P. Jones gave his opinion on United States of America v. Dove, a criminal copyright case, ruling that each illegal download does not necessarily equate to a lost sale, and that the companies affected by P2P piracy cannot make their restitution claims based on this assumption.

Daniel Dove was originally found guilty of criminal copyright infringement for running a torrent group called "Elite Torrents" between 2004 and 2005. The jury in the case had found Dove guilty of reproduction and distribution of copyrighted works, as well as conspiracy to commit criminal copyright infringement. At the time, Judge Jones sentenced Dove to 18 months in prison for each count, plus a special assessment of $200 and a $20,000 fine ($10,000 per count).

However, the RIAA and Lionsgate Entertainment had both submitted requests for restitution—they had argued that each individual copy of content downloaded through Elite Torrents was the equivalent of a lost sale. For example, the RIAA said that 183 albums were transferred through Dove's server 17,281 times, then multiplied that by the wholesale price of a digital album in 2005 ($7.22) to conclude that its member companies were owed almost $124,769 in restitution, or $47,000 if Dove agreed to be part of an RIAA "public service announcement" about piracy. Similarly, Lionsgate said that it owned copyrights to 28 of the 700 or so movies that Dove served up—Lionsgate argued that Dove caused the movie industry to lose some $22 million, and since Lionsgate owned copyrights to about 4 percent of the available movies, it was owed $880,000.

Jones wrote in his opinion that equating each download with a lost sale is a faulty assumption. "Those who download movies and music for free would not necessarily purchase those movies and music at the full purchase price," Jones wrote. "[A]lthough it is true that someone who copies a digital version of a sound recording has little incentive to purchase the recording through legitimate means, it does not necessarily follow that the downloader would have made a legitimate purchase if the recording had not been available for free."

It's important to note that this decision does not directly affect the thousands of civil cases that the RIAA has launched against accused copyright violators. Dove was convicted as a criminal copyright offender where restitution is a consideration, while the RIAA's civil suits can ask for monetary damages determined on an entirely different scale. For example, Jammie Thomas was found liable for $222,000 in damages in 2007 after "making available" only 24 songs (that verdict has since been overturned, however, as the "making available" theory has been riddled with holes via different rulings). "The factors that go into the calculation of restitution are different than the ones that go into the calculation of statutory damages in civil cases," the Electronic Frontier Foundation's Fred von Lohmann pointed out to Wired.

Still, the Dove ruling is reassuring in that it emphasizes once again the concept that a sheer number of downloads doesn't necessarily equal monetary losses. This is the same assertion made by software groups about piracy, such as the Business Software Alliance (BSA), and it keeps getting shot down.

Henry Rollins on File Sharing

http://www.djmixhosting.com/user_uploads/504prob83c/1-02firstonthelist.mp3

Are You Wired for Tomorrow?

The information age is at hand. This is a great video that has some really interesting facts. These facts can be considered and used to help advance your art. Call it a better understanding...