This case is notable for being both the first major file-sharing case in the US over the P2P activity of a regular user; multiple court cases and the vast swings in damages; and the size of the damages awarded, despite the lack of evidence. (For those commenters that like to claim she stole, had it been a theft case, she’d have won years ago)

The appeals court sent things back to the original $222,000 award back in September, which has now paved the way for an appeal to the US Supreme Court, if it’ll hear it (they didn’t hear Tenenbaum, or Harper).

It’s unlikely to go well for Thomas as the Supreme Court is very pro-copyright, putting work back under copyright that had already entered the public domain in a case earlier this year.

Nor will the artists allegedly harmed by piracy benefit much. In the (extremely unlikely) event of Thomas finding some way to come up with the cash, it won’t go to the artists, as we’ve seen before with the Limewire settlement last year, or the Pirate Bay case. In fact, it wouldn’t surprise us if the artists were being billed for the hundreds of thousands of dollars this case has cost to prosecute.

The only winners out of all this are music industry lawyers, and what does that say for how well copyright is working?

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

There are editorials in mainstream newspapers that say “Such theft costs the copyright- or trademark-holders billions of dollars each year.”

Even Vice President Biden said last year that “Piracy is theft, clean and simple, it’s smash and grab.” But you’d think a long-time lawyer and member of the Senate Judiciary would know to read the law.

The fact is that if copyright infringement was theft, then it would be treated as theft, dealt with as theft, and ‘copyright infringement’ wouldn’t exist at all. Nevertheless, the claims are often made. We’ve dealt with this topic before three years ago, focusing on UK law. So let’s take an example of a US case and see what would happen if it were tried as theft, instead of copyright infringement. The most obvious case is that of the RIAA against Jammie Thomas.

Civil trial

We all know the process. A John Doe suit is filed (over 200,000 of them in the US so far), usually amalgamated into a group for easy processing (although it is legality questionable). This then goes to discovery, where the identity is uncovered. At this point the suit is dropped and a direct appeal for ‘settlement‘ is made. If no settlement is reached then the civil lawsuit process can be started.

In the Thomas case the civil lawsuit was filed April 2006, and has now gone on for several years; the latest activity just this last week. Civil law (17 U.S.C. § 504) provides for both actual damages AND statutory damages from $200 to $30,000 for non-willful infringement and $750-$150,000 for wilful infringement – per infringement. In three trials, juries have set the per-track damages figure for Thomas-Rasset at $9,250, $80,000 and $62,500 while the courts have twice reduced it to $2,250 per track, which the RIAA is appealing, AGAIN.

The case has now been ongoing for over 5 years, not counting the original John Doe complaint, and it has occupied hundreds if not thousands of man-hours defending it. These hours cost money, and in a civil case that means finding a lawyer willing to take it on pro bono.

At first, Thomas-Rasset retained Brian Toder as her attorney, and later switched to Kiwi Camara. The much shorter Capitol v Foster case had attorney costs of over $68,000 awarded after the RIAA dropped the case, while Atlantic v Anderson (dropped by the RIAA after 3 years) ended up with over $100,000 in costs awarded by the court.

As with all such cases the verdict is based on ‘balance of the probabilities’ or ‘preponderance of the evidence’. Quite a contrast to a criminal case.

Criminal Trial

Were copyright infringement is ‘stealing’, this would be the process Thomas-Rasset would undergo.

An investigation would be made by the police (rather than a private company, hired by the complainant). As infringement is ‘theft’ she would be dealt with under Minnesota state law, specifically Minnesota Statute §609.52. She would be arrested, charged, and taken to court. If she could not afford a lawyer, one would be provided for her. Odds are, she would be dealt with in a matter of weeks, if not days.

The theft statute values goods at the cost to buy, so the 24 tracks would each be valued at $0.99 – the cost on iTunes – for a total of $23.76. If we take the worst case scenario though, and assume a whole CD per track at $20 per CD, that still brings the total value of the theft to $480. As the value is below $500, the maximum penalty available is stipulated as follows:

In all other cases where the value of the property or services stolen is $500 or less, to imprisonment for not more than 90 days or to payment of a fine of not more than $1,000, or both.

The trial would be judged, not on ‘balance of the probabilities’ as with a civil trial, but ‘beyond reasonable doubt’. Based on the evidence submitted in the trials so far, such a case would fail, as Ms Thomas-Rassett has never been proved to be personally responsible, only her connection and computer.

That means?

Of course, if it were just a choice of a civil suit or a criminal theft trial, then it’s clear why a civil trial is prefered, even if it is a money sink. Yet, there’s one last obstacle: The Supreme Court of the US.

In 1985, the Court ruled in Dowling v United States that copyright infringement is not theft, even when dealing with physical objects, such as vinyl records.

While industry bodies might still want to claim it’s still theft there is one simple fact that’s clear. In treating it as theft the benefit would be to the alleged infringer. A higher evidence standard, an independent investigation, legal counsel provided free for the alleged infringer, and vastly smaller penalties.

The infringement=theft argument has only one thing going for it, and that’s its emotional impact. In reality, it’s the very LAST thing they want, which is why new laws, like Protect IP and others have been pushed for many years. And again, we reiterate that we’ve dealt with the US here, laws for other countries are different, as we’ve seen twice in the past week  in Sweden, yet it’s still copyright infringement there, not theft.

If you’re confused about it still, maybe this song will help you tell the difference.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

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.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

Some may see that as a mixed blessing. Toder, a maritime law specialist, was hardly the most appropriate choice of counsel, and this showed in a frankly lackluster non-existent defense.

Ms. Thomas explained to TorrentFreak why she initially chose Toder for the case “I had no idea who could represent me for my case and Mr. Toder was listed on another attorney’s weblog, Mr. Ray Beckerman, as being the attorney from Minnesota who handled cases such as mine.” she also said, “I feel Mr. Toder performed as best he could considering the financial situation I am in and how much I could afford to pay him and his firm.”

The notice on the website says that all the donations will still be used for her new defense: “She [Thomas] confirmed that the donations collected here are still going into her legal defense fund and will be used to finance her appeal. She is now in search of a capable attorney ready to take the appeal either pro bono or for what is raised through fundraising efforts.”

Donation details are at freejammie.com

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

The juror, Michael Hegg, a steelworker that claims he has never been on the Internet, said it took just five minutes to reach the verdict.However hours were spent deciding, or ‘bickering’ as to how much to award to the plaintiffs in punitive damages , no actual damages were awarded, because none were sought. Hegg’s statement, that “we wanted to send a message that you don’t do this, that you have been warned,” sends a message of it’s own, that the double-talking tactics of the industry groups is working.

Potentially more serious though, are the hints given by him that it was never going to be a fair trial. For someone who has never been on the internet, he, for instance, responded to claims of spoofing, and of possibly being a zombie system as “Spoofing? We’re thinking, ‘Oh my God, you got to be kidding.’”

We discussed these statements with Andrew Norton, spokesperson for the Pirate Party of the US, which was not happy with some of the actions in this trial. “The attitudes and responses of this jury member shows that, whilst the litigation strategy may be a ‘Money Pit’, the misleading PR campaigns are having an effect, to the point where they are undermining the ability to allow anyone a fair trial for these alleged offenses. It’s also clear from what he has said that the jury disregarded some of the facts presented to them by witnesses, such as the hard drive in question was replaced because it was faulty, not in relation to the trial.” He also added, “This jury clearly came into the trial with its mind made up, undoubtedly thanks to propaganda such as the “You wouldn’t steal a…“ advertising campaign that has been running for a number of years, which incorrectly associates downloading with theft.”

The Jury also ignored a lot of precedent in other similar cases, or was not made aware of it. This is highlighted by Hegg’s assertion that the Kazaa screenshot, showing millions of Kazaa users, sharing hundreds of millions of ‘songs’ (potentially oblivious that a small percentage of those users and a large percentage of those files were the agents of the plaintiffs, and their fake files) established that Kazaa’s raison d’être was for file-sharing , something no-one has ever questioned. His logical leap, however, that file-sharing is copyright infringement is one not shared by courts elsewhere, (affirmed in trials such as Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984) and A & M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (2001) amongst others.)

Yet, the biggest surprise of all, and one that could come back to haunt the RIAA, is that no actual damages were claimed. This may have been because it would have been hard to establish an actual figure, backed up sufficiently to the courts requirements, but will make it hard to claim, in future, that they are losing money. If Ms. Thomas, with all the evidence they had against her caused them no actual financial damage, then it will be hard for them to claim anyone else has cost them either. Of course, when your misinformation strategy means you get the punitive damages anyway, does it really matter?

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.