RIAA’s Week of Hell

It's been a bad week for the RIAA. First their headline campaign victory over Jammie Thomas was thrown out, and then the government said it 'strongly opposes' a bill lobbied for by the entertainment industries.

riaaIt was a midweek battle that left the RIAA’s campaign against file-sharers reeling on the ropes. Until now, the RIAA’s approach was to throw money at attorneys, who would then take on random targets, unless money and promises were given – ‘legal mugging’ as it were.

It must have felt like an attack from behind when the RIAA heard that they lost its only major court victory, with a mistrial being declared in Capitol V Thomas. Making things worse, the Department of Justice, viewed by some to be the bully’s trusted lieutenant, turned on the content industries by soundly criticizing a bill aiming to increase copyright and patent enforcement powers.

The Thomas case is now a proverbial millstone around the neck of the RIAA. At first it looks impressive, and gives a frightening impression to anyone that thinks to challenge them, but now it’s starting to drag them down. Not only was the decision in the case thrown out, the statement by the judge in support of the mistrial reads like a critique of the legal arguments put forward by the RIAA over the last 5 years.

Yet, the millstone around the neck is not just in the refuting of legal arguments. It also extends to the excessive damages that were awarded in the first trial. The $9250 per infringement has been argued to be so far past constitutional restrictions on excessive punishments, that it has brought it into public attention. Because of this, it may end up reducing the maximum amount of damages and fines that can be awarded, which may also undermine the settlement encouragement (or ‘pay instead of fight’) strategy. The end of the judge’s order says it all:

While the Court does not discount Plaintiffs’ claim that, cumulatively, illegal downloading has far-reaching effects on their businesses, the damages awarded in this case are wholly disproportionate to the damages suffered by Plaintiffs. Thomas allegedly infringed on the copyrights of 24 songs – the equivalent of approximately three CDs, costing less than $54, and yet the total damages awarded is $222,000 – more than five hundred times the cost of buying 24 separate CDs and more than four thousand times the cost of three CDs. While the Copyright Act was intended to permit statutory damages that are larger than the simple cost of the infringed works in order to make infringing a far less attractive alternative than legitimately purchasing the songs, surely damages that are more than one hundred times the cost of the works would serve as a sufficient deterrent.

While 24 songs is more like two CDs (than the three the court states), that damages should go from 4000x losses (assuming 3CDs) to 100x, means that the $222,000 would be more like $5,550. That’s quite a difference. The same could be applied to amounts demanded in pre-trial settlements, where the RIAA has often asked too much. The court’s math is far more reasonable, despite being calculated using retail CD prices, which have all manner of mark-ups and distribution costs that are not relevant to digital music included. A digital download doesn’t have to pay for the CD blank and doesn’t have to pay for transportation to the store. There are no printing costs or middlemen profit. The court gives an estimated cost of $2.25 per track, the actual cost for a download is more than seven times less than that.

Of course, other arguments, ranging from definition semantics, to trying to use criminal law as precedent, were denied as well. Some of these arguments were novel, others seemed like desperation.

The other news from Wednesday didn’t help either, especially in the muddling of civil and criminal enforcement of copyright. The Department of Justice sent a letter to Senators Leahy and Specter over the Enforcement of Intellectual Property Rights Act (EIPRA) of 2008, which passed through the Senate judiciary committee last week. It stated that the Departments of Justice and Commerce had ‘strong and significant concerns’ with portions of the act. In short, they said they didn’t want to be used as free lawyers for the entertainment industry, and also felt that the position of an ‘Anti-Piracy Czar’ would be, surprisingly, unconstitutional. When even the US Justice department, which has seemed indifferent to the US Constitution in recent years, uses it as an excuse to oppose new powers, it could be likened to rats leaving a sinking ship.

Of course, the past week hasn’t been only bad news for the RIAA and its members, it’s been bad press for them too. On Monday, they elected to proceed to a jury trial in Maverick V Harper, with a date set for November. The RIAA were unwilling to accept a $200/infringement settlement offered by the judge. In taking the offer, they would have had a win, but at a lower amount, and left the potential for innocent infringement defenses. However, with the Thomas mistrial ruling two days later, negating any precedent they hoped to point to, and undermining some of the possible defenses, it may seem they have gambled on a treble-or-nothing bet.

The case in question centers around 38 songs, although only 6 were downloaded by MediaSentry. What can make this case interesting is that MediaSentry may be in violation of the law, regarding Texas based investigators, and that the age of the defendant – Whitney Harper was 16 when the infringements allegedly occurred – make an innocent infringement defence possible. Attacking a young girl for actions in her teens may not play well with a jury.

All in all, a bad week for the RIAA, and it may only be the first of many. We may never know if the article written by New York based attorney Ray Backerman did anything to to bring about a closer examination of the RIAA’s cases. Nor can it be overlooked that Wednesdays are not the RIAA’s best days – exactly a week before the Thomas and DOJ setbacks, they set themselves up as targets of ridicule by suing Beckerman. They accused him of allegedly doing what they have been repeatedly accused of doing – irony indeed. Many people are doubtless wondering what excitement October 1st will bring.

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