Supreme Court Rejects Tenenbaum Appeal

Categorize this as dog-bites-man news but since I’ve posted about the Tenenbaum case many times ($675k, More on Tenenbaum, More on the Tenenbaum Judgment, Tenenbaum Postscript, $.70 a Song, and Court Reinstates Tenenbaum Damage Award), and discuss it in class I’ll note that the U.S. Supreme Court, without comment, decided not to hear Joel Tenenbaum’s appeal in his music-piracy case. This is not the end of the case; the federal district court in Boston must decide whether to leave standing the jury’s award of $675,000 in damages to the recording industry.

This is a strange case whose longevity (it began in 2007) reflects its status as an ideological battleground over music piracy–however poorly chosen a field of battle it offers to file-sharing’s true believers.

I Want My Megaupload Files*

Among the interesting legal issues raised by the U.S. Justice Department’s shutdown of Megaupload.com and criminal prosecution of its managers is whether those who used the site to store non copyright-infringing works will be able to retrieve their data. The government claims Megaupload’s legitimate data-transfer service was a front for systematic copyright-infringement, but there’s no claim that those engaged in legitimate uses were benefiting from or knowingly contributing to unlawful activity. So while the government prepares its case those legitimate users hang in limbo, unable to retrieve their data. The Electronic Frontier Foundation, with the support of Carpathia Hosting, is gathering information from those affected through megaretrieval.com and may initiate legal action to hasten the effort.

*not me personally.

SOPA Status

It’s been a consequential week for the Stop Online Piracy Act (SOPA) and the Protect IP Act, the two controversial pieces of copyright-protected legislation pending in Congress. I’ve posted about these bills in recent months but I’ve not attempted to post the play-by-play culminating in last week’s coordinated online protest against the bills. Now that the bills have stalled–the New York Times reports “the pressures of an election year make action this year unlikely”–over the next few days I want to take time to compare the bills’ stated purposes with their methods for achieving those purposes, and separate fact and myth from arguments of both the bills’ proponents and its opponents. These particular bills may be gone for good but the issues they address and, as important, the music, motion picture, and publishing industry lobbying effort that pushed for their creation are still patrolling the House and Senate.

Court Reinstates Tenenbaum Damage Award

The First Circuit reinstated the jury’s $675,000 damage award to Sony BMG in its copyright infringement case against music-sharer Joel Tenenbaum, but the decision did not reach the merits of District Court Judge Nancy Gertner’s holding that the original award was so excessive as to violate Tenenbaum’s Constitutional right to due process. Instead the court ruled that before addressing the Constitutional issue Gertner should have used her power of remittur (“the procedural process by which a verdict of the jury is diminished by subtraction,” Black’s Law Dictionary, 5th Ed.*) to reduce the award, which would have given Sony the choice either to accept the reduced award or seek a new trial. Sony wins this round with a warning that the court or Congress may drop the other shoe.

*Old I know–it’s the edition I bought in law school.  The current edition is the 9th.

File-Sharing Litigation Groundhog Day

RIAA file-sharing punching bag Jammie Thomas-Rasset lost for the third time, a Minnesota jury finding her liable on Wednesday for copyright infringement and ordering that she pay damages of $1.5 million.  A 2007 jury trial resulted in a $222,000 RIAA damage award against Thomas-Rasset.  She appealed, there was a retrial in 2009, and she lost again:  liability for copyright infringement and $1.92 million in damages to the RIAA.  The trial judge reduced that “monstrous and shocking” award to $54,000.  The RIAA offered to settle for $25,000, Thomas-Rasset refused, and the RIAA tried its case again, which brings us back to Wednesday’s verdict.  Thomas-Rasset’s counsel said she would appeal–to the federal judge who reduced the $1.92 million award.

LimeWire Shut Down

“If file-sharing copyrighted songs is against the law, why is LimeWire still operating?”  Students have asked this question countless times, and countless times I’ve answered it. There are no copyright police; copyright holders must pursue civil lawsuits to remedy claims of copyright infringement; they must prove their claims in court; civil litigation is slow.  Some imagine that all a copyright holder need do to shut down a file-sharing site is to show the court a copy of the decision shutting down Napster.  It’s not that simple, efficient, quick, or inexpensive.

Students can discard the question because yesterday a federal judge ordered LimeWire “to disable [its] ‘searching, downloading, uploading, file trading and/or file distribution functionality.'”  This injunction does not end file-sharing, of course.  It moves the RIAA’s focus to its next litigation target.

Monetizing Piracy

An Ars Technica story provides more information about the U.S Copyright Group’s litigation campaign against movie downloaders.  As mentioned here in March (see Bit Torrent-ers Beware) the Group is the revenue-generating brainchild of a Virgina law firm.  As reported by Ars Technica it’s a simple idea:  identify downloads of an independent film, team up with film’s producers, sue the anonymous John Does for copyright infringement, subpoena their identities, agree to settle for short money (compared to going to trial), split the proceeds with the film’s producers, rinse, repeat.  Ars Technica identifies the films and number of defendants named in the eight suits, all filed since January 2010 in D.C. federal court ; The Hurt Locker is the best-known.  U.S. Copyright Group has sued over 14,800 defendants to date.  If the plaintiffs obtained an average of just $500 per defendant (a number I pulled out of the thin air) they would gross $7.4 million.  From where I sit $500 per defendant seems plausible–some John Does will remain unidentified, some won’t exist, some will be judgment-proof, but even so an average of $500 per defendant is not a ridiculous plug number.  Whether the lawyers’ costs come off the top or not, and even if the costs are $100/defendant, the net would be about $6 million.  Ars Technica plugs in larger numbers to calculate a settlement pot of close to $20 million.  Whoever is closer, it’s real money.

Limewire

Discussing copyright law and file-sharing over the years I’ve lost track of how many times students have asked “what about Limewire?  Why does it still exist?”  The answer has always been “because a court hasn’t shut it down yet.”  While a court still hasn’t enjoined Limewire from operating, it took a giant step in that direction yesterday. Federal district court  Judge Kimba Wood (why didn’t may parents name me Kimba?) granted various of  the plaintiff record companies’ motions for summary judgment in their four-year old copyright infringement suit against Limewire, ruling they had induced users’ copyright infringement and engaged in vicarious copyright infringement, among other things.  The court also held Limewire’s founder Mark Gorton personally liable, saying he “directed and benefited from many of the activities that gave rise to LW’s liability.”  The 57-page opinion is here.  And I have the first post-semester case to include in the 2010-2011 version of my Internet Law Casebook.

$.70 a Song

Joel Tenenbaum, BU’s own music pirate found liable last summer for copyright infringement in a case that attracted considerable media attention, is in the news again.  A federal court jury ordered Tenenbaum to pay $675,000 in damages to copyright holders for downloading 30 songs.  That’s $22,500 a song.   Tenenbaum’s pro bono lawyer Charlie Nesson argued yesterday to trial judge Nancy Gertner that the appropriate measure of damages would be the revenue lost because Tenenbaum didn’t purchase the songs from iTunes.  At the iTunes price of $.99 a song, assuming iTunes would pay the rights holder the standard 70% of the sale price, Nesson said the total damages should be no more than $21. The Boston Globe article about the hearing does not mention whether Gertner, plaintiffs’ counsel, the court clerk, the bailiffs, and the courtroom’s audience burst into laughter mention of Nesson’s damage figure.  There had to be considerable eye-rolling.  Many commentators, including me, have been critical of Nesson’s handling of this case (see prior posts).  Today he earns kudos for passing the straight-face test. The record companies’ lawyers response was that Tenebaum “has no one to blame but himself.”

Nesson’s strategy may prove to be a wily gamble.  Gertner’s 2009 order explaining her decision not to allow Tenenbaum’s fair use defense signaled in very clear terms her discomfort with the state of the law regarding file-sharing.  Gertner is very smart and not afraid to take a fresh look at this case.  Nesson’s $.70-a-song argument is calculatedly ridiculous.  Nesson did not cover himself with legal glory before and during Tenenbaum’s trial, but he is very smart.  By staking out such an extreme position he leaves Gertner plenty of room to maneuver.