[A2k] IP-Watch: Both Sides Claim Victory In US Music Industry File-Sharing Litigation

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Intellectual Property Watch
1 October 2008

Full Story: http://ip-watch.org/subscribers/subscribers_20081001.php

Both Sides Claim Victory In US Music Industry File-Sharing Litigation

By Bruce Gain for *Intellectual Property Watch*
Five years and over 30,000 lawsuits later, both sides in the music
industry's legal battle against illegal file-sharing in the United States
claim they are prevailing.

On one side, the Recording Industry Association of America (RIAA), which
represents EMI, Sony BMG, Warner Brothers, and affiliates, says the ongoing
lawsuits successfully serve as a deterrent to would-be infringers. The
association says the litigation is part of an overall awareness campaign
intended to convey a message about how downloading and sharing
copyright-protected files is illegal.

On the other, those who oppose the litigation say the lawsuits excessively
punish those whom the RIAA's attorneys have targeted and do not really deter
file sharing in the United States.

But, whether the litigation has successfully prevented illegal file-sharing
or not depends on the way one interprets the statistics.

Citing NPD Group statistics, the RIAA says the number of households using
peer-to-peer networks to download music rose "modestly" to 7.8 million in
March 2007 compared to 6.9 million households in April 2003 before the
litigation began, while broadband penetration more than doubled during the
period.

While the RIAA concedes that the lawsuits have a long way to go before the
illegal exchange of copyright-protected music files is eliminated, it
emphasises that the litigation campaign has served as a powerful public
relations campaign. The lawsuits have raised awareness about the illegality
of downloading and distributing copyright-protected files, the RIAA says.

According to an RIAA survey, 37 percent of those polled in 2003 said making
music available for free from a personal computer was illegal, while the
RIAA now says the percentage of people who think downloading music for free
is illegal is 73 percent.

Jonathan Lamy, a spokesman for the RIAA, said in a statement provided
to*Intellectual
Property Watch*: "This programme has undoubtedly helped shape the legal
digital marketplace today. There is a general sense of awareness that sites
like LimeWire that give away free music are illegal." He added: "This
programme has helped foster innovative online businesses that would never
have had the chance to begin, much less thrive."

RIAA declined to comment specifically for this article.

However, the statistics that the RIAA has marshalled "prove nothing," said
Fred von Lohmann, a staff attorney for the Electronic Frontier Foundation
(EFF), a California-based digital consumer rights group.

"The question is not the reasons cited by those that quit, but rather how
many people haven't quit despite knowing about the lawsuits," von Lohmann
said. "Of course, those that quit cite fear of lawsuits - they're the ones
who quit P2P, after all - although some surveys show that more users are
concerned about spyware than lawsuits. And it also doesn't tell us what they
are doing after quitting P2P file sharing."

The bottom line is that there "is insufficient evidence to support the
RIAA's claim that the lawsuits are a 'strong deterrent,'" von Lohmann said.
"I'm sure the lawsuits have deterred some - perhaps leading them to infringe
in less public ways, such as sharing among friends - but it is undisputed
that P2P has continued to grow during the five years of the lawsuit
campaign."

At press time, EFF issued a report entitled, "RIAA v. The People: Five Years
Later." <http://www.eff.org/wp/riaa-v-people-years-later>

Most users anyway get their music for free over the internet, said John
Palfrey, a clinical professor of law at Harvard Law School and co-executive
director of the Berkman Center for Internet and Society. The trend to
download and share music and other media files for free, Palfrey said, is
especially prevalent among younger users whom Palfrey profiles in his recent
co-authored book "Born Digital: Understanding the First Generation of
Digital Natives." These younger users who were born after the so-called
digital age began will have a profound effect on how all digital media will
be distributed in the future when they come of age, he said.

"[The RIAA says] 'the beatings will continue until morale improves' about
the lawsuits and for this population of kids," Palfrey said. "But if you
keep beating these kids, then morale will not improve."

The Controversy

Since the RIAA began its litigation campaign in September 2003, its use of
the US court system to seek damages by applying the US Copyright Act has
stirred considerable controversy - especially when the wrong people were
targeted in some cases.

In one well-publicised case, single mother Tanya Andersen prevailed during a
long court battle. The law firm representing the RIAA sought $1 million in
damages, or $750 for each of the 1,400 songs Andersen allegedly shared,
while Andersen contended that she had never heard of the song titles much
less downloaded them.

In other cases, the RIAA has mistakenly sued defendants who were deceased,
disabled at the time the alleged infringing activity took place, or did not
have internet access when an internet service provider account was matched
with file-sharing.

In most cases, defendants in the United States usually settle whether or not
they are innocent for what is often an amount over $5,000, since the cost is
less than what it would cost to hire and attorney, said Ray Beckerman, an
internet law attorney who has successfully represented defendants that the
RIAA has accused of illegal file sharing in the United States.

One highly publicised case, Capitol v. Thomas, that was previously seen as a
legal victory for the RIAA, is set to be retried after the judge set aside a
jury's verdict for $222,000 in damages for a Minnesota mother's file-sharing
of 24 music tracks.

After setting aside the verdict, District Judge Michael J. Davis called for
congressional action to amend the Copyright Act, which he said is not
applicable to consumer file sharing.

"Unfortunately, by using Kazaa, Thomas [the defendant] acted like countless
other internet users. Her alleged acts were illegal, but common," the judge
wrote. "Her status as a consumer who was not seeking to harm her competitors
or make a profit does not excuse her behaviour. But it does make the award
of hundreds of thousands of dollars in damages unprecedented and
oppressive."

The verdict was set aside because of what Beckerman said were wrong jury
instructions.

"So the judge gave the wrong instruction; the jury came back with the wrong
verdict; and about eight months later, the judge came to the realisation
that he had committed a manifest error of law by giving the wrong jury
instruction, and he mentioned in his decision that neither lawyer had told
him about it, Beckerman said.

Last year, the RIAA began to target US colleges and universities as part of
a "deterrence and education initiative." The RIAA sent letters to
universities requesting that they match IP addresses to alleged infringers.
Similar to the litigation campaign targeting individuals in the United
States, the letters threatened that the RIAA could sue for damages of up to
$750 per song and then solicited a settlement fee of about $3,000 to avoid
litigation.

However, Beckerman said he believes the RIAA is having difficulties winning
college-student cases that see trial.

"The tide has turned in those cases [against college and university users]
because I believe the courts in the United States were caught off guard by
this onslaught," Beckerman said. "They saw large sets of papers from big law
firms and a lot of impressive techno-speak. They didn't understand how
phoney these litigations were."

Not the Final Solution?

The RIAA and the recording industry association members it represents agree
that the lawsuits are but one small part of the future of music
distribution, considering how the internet and the digitisation of music has
created a new media channel that is reshaping the industry. Already, digital
music formats, including downloads and ringtone sales represent $2.4 billion
in the United States and account for 23 percent of the music industry's
revenues, according to the RIAA's 2007 year-end data.

Now, that the digital music industry has become a multi-billion dollar
industry after its creation just a few years ago; numerous subscription,
download, and interactive streaming services exist, according to Patrick
Ross, executive director of the Copyright Alliance.

"In the digital age, creative industries need to be flexible to meet
consumer desires while still ensuring that creators are compensated," Ross
said. "What we've seen in the music industry is a great deal of market
experimentation - services licensed to operate without any real idea about
what the returns, if any, might be - combined with an education campaign
about infringement that has been furthered by occasional suits."

However, infringement does, of course, remain a major problem, Ross said,
especially on college campuses.

"Even with numerous, affordable legal services available, not everyone is
willing to take advantage of them in order to operate legally," Ross said.
"The industry will have to stay vigilant, but it has already ensured under
the law that these rights are not ones that recording labels will forfeit."

*Bruce Gain may be reached at info@ip-watch.ch.*