Music Industry Wins First Internet Piracy Case

Single Mother Will Appeal $222,000 Verdict

A jury levied a $222,000 fine against a Brainerd, Minn. woman on Oct. 5, 2007 in the first-ever trial over the downloading and sharing of copyrighted music. However, some say the high-priced verdict is unlikely to discourage more downloading.

The Associated Press (AP) reports that over 26,000 people have been sued by record companies for copyright infringement under the Copyright Act, 17 U.S.C. section 101, et seq. but Capitol v. Thomas, C.V. 06-1497 (D. Minn. Oct. 5, 2007) was the first case ever to go to trial. Most other plaintiffs have settled out of court for an average of $4,000, The New York Times reported.

The six plaintiffs, Sony BMG, Arista Records LLC, Interscope Records, UMG Recordings Inc., Capitol Records Inc., and Warner Bros. Records Inc., alleged 30-year-old Jammie Thomas downloaded 1,702 songs and made them available for download through a Kazaa file-sharing account on the Internet. The award amounts to $9,250 per song for 24 songs that the record labels chose to focus on at trial.

According to the AP, Thomas had denied any wrongdoing and had testified that she did not have a Kazaa account, but her testimony was inconsistent regarding whether she had replaced her computer’s hard drive before or after she was sent a February 2005 instant message warning her that she was violating copyright law.

Although she said in a pre-trial deposition that she replaced the hard drive in 2004, her hard drive was actually replaced in March 2005, the AP said. The hard drive itself was not presented at trial by either party.

According to the AP, during the three-day trial, the record companies called witnesses from an Internet service provider and a security firm who testified that the copyrighted songs were offered by a Kazaa user under the name “tereastarr,” an Internet user address which belonged to Thomas.

Brian Toder, Thomas’ attorney, argued that the record companies did not prove that Thomas herself had used the address and username to download the songs.

According to the AP, presiding Judge Michael Davis of the U.S. District Court for the District of Minnesota had planned to instruct jurors that the record companies would have to prove someone had copied the songs, not simply that Thomas had made them available online through the file-sharing account, to show copyright infringement.

But Richard Gabriel, attorney for the record companies, cited cases where simply making songs available has been found to be infringement, and Judge Davis instructed the jury to decide accordingly.

Toder told CNN on October 8 that they would appeal the ruling to the U.S. Court of Appeals for the 8th Circuit.

According to Fred von Lohmann, an attorney for the Electronic Freedom Foundation, a San Francisco-based advocacy group which has said it will file an amicus brief in Thomas’ appeal, an actual download must occur for infringement to be proven under the Copyright Act.

“If I have a file in a share folder and nobody downloads from me, then how am I infringing?” von Lohmann said in a story posted on the Wired magazine blog “Threat Level.”

On October 15, Toder filed a motion with the District Court saying the court should reduce the $222,000 fine or grant Thomas a new trial, according to the Minneapolis Star Tribune. Toder argued in the motion that the award should have been limited to an amount much closer to the recording industry’s actual damages, which he said was 70 cents per song. Toder’s motion said case law supports the argument that even if that amount is multiplied to punish infringement, the maximum award for each song should not exceed $151.20, reported the Star Tribune.

According to the AP, Gabriel said he hopes the $222,000 verdict “send[s] a message that downloading and distributing our recordings is not OK.”

The message may not get through, according to some analysts.

Technology and the evolution of digital music marketing are outpacing the record industry’s ability to discourage illegal downloading, according to industry experts interviewed for an October 6 story in the Star Tribune.

Newer file-sharing software that has replaced older versions like Napster and Kazaa has made illegal downloaders more elusive. Meanwhile online music stores like iTunes and Amazon.com are experimenting with doing away with copy protection measures. SpiralFrog.com offers music to listeners to for free if they are willing to watch ads on their computer.

Gene Munster, a digital music industry analyst for Piper Jaffray, an investment bank and institutional securities firm, called the ruling against Thomas “a non-event.”

“The war against illegal downloading has long been lost because 85 percent of all downloaded digital music is still illegal copies,” Munster told the Star Tribune.

Munster said that most people today discover new music online, which may eventually render record labels altogether obsolete.

Linda Deneen, director of information technology at the University of Minnesota - Duluth, said the majority of college students who use file-sharing software do not think they will be prosecuted.

“The culture seems to be, ‘I won’t be the one to get caught, and everybody else is doing it,’” Deneen told the Star Tribune.

According to the Star Tribune, 300 University of Minnesota - Duluth students were sanctioned for suspected music piracy and other Internet misuse in 2006 by having their college-provided broadband service interrupted.

Phil Leigh, president of research firm Inside Digital Media in Tampa, Fla. questioned the prudence of record companies suing downloaders. Leigh told the Star Tribune “The lawsuits make people angry, and that’s not a good relationship to have with customers.”

- Amba Datta, Silha Research Assistant

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This page contains a single entry by cla published on October 21, 2009 12:50 PM.

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