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Statutory Damages and Music Industry Lawsuits Against Direct Infringers:

A new I/P Colloquium podcast hosted by my colleague Doug Licthman, with Prof. Charlie Nesson (Harvard), RIAA lawyer Steven Marks (RIAA), Prof. Catherine Sharkey (NYU), Prof. Thomas Colby (GW), and Dan Markel (Florida State):

Joel Tenenbaum looks a lot like every other defendant who has been accused by the music industry of illegally sharing copyrighted work online, but with one key difference: his defense attorney is Harvard Law School Professor Charlie Nesson, and Nesson is out to turn his case into a public referendum not only on the music industry's efforts to enforce copyright through these direct-infringer suits, but also on the copyright rules that make the industry litigation possible. In this program, we engage Nesson's key arguments, focusing especially on Nesson's claim that copyright law's statutory damages regime runs afoul of constitutional protections against excessive and/or arbitrary civil damages awards.

Fidelity (mail) (www):
If you weren't already aware, the RAND corp found a Link between Film Piracy, Organized Crime, and Terrorism. It's been disputed by a few people.

Joel Tenenbaum sounds like a terrorist supporter to me.
3.5.2009 8:15pm
MCM (mail):
Maybe I missed something, but I thought the RIAA announced in December that it was abandoning the litigation strategy in question here?
3.5.2009 8:44pm
Alligator:

I thought the RIAA announced in December that it was abandoning the litigation strategy in question here?


I believe the Tenenbaum case had already been filed when the RIAA made its announcement, which stated that the RIAA would not file any new lawsuits. In any case, the RIAA lied lied. How unusual.
3.5.2009 10:06pm
MCM (mail):
I believe the Tenenbaum case had already been filed when the RIAA made its announcement


Well, I assumed that was the case, but I didn't see the point in having a "public referendum" on the subject if they had abandoned the strategy going forward.

I am interested, but not surprised, to see they have not wholly abandoned it, as abusive rent-seeking never goes out of style!
3.5.2009 11:08pm
Ray Beckerman (mail) (www):
Yeah the RIAA lied; they filed a new suit yesterday in fact.

On the subject of the colloquium, I didn't care for it. Thought it was an extreme hatchet job.

Discussed none of the case law, none of the legal scholarship, supporting the unconstitutionality defense applicability to Copyright Act statutory damages.

Moderator acted unmoderator-like.

He seemed to pick the most unusual and most radical of the defense cases, because it was the most vulnerable.

Ignored about a dozen pending cases making a much more conservative argument.

Also technically it kept crashing my browser, and ultimately crashed my computer.
3.5.2009 11:14pm
Soronel Haetir (mail):
Much as I may dislike the RIAA I dislike the people fighting them even more. If it were people fighting unrippable CDs or other time shifting issues I might feel for them, but wanting material without paying for it is another matter entirely.
3.6.2009 1:10am
MLS:
Mr. Beckerman's views notwithstanding, I did listen to the entire presentation (about 1 hour long and eligible for CLE credit...and free no less) and found it to be a very courteous and comprehensive discussion examining the key aspects of the issues involved in Mr. Tenenbaum's challenge to "statutory damages" on constitutional grounds given that in many cases the amounts available as statutory damages, particularly if an infringement is deemed wilfull, may be at odds with Supreme Court jurisprudence concerning proportionality between general and punitive damages. In addition to the discussion between Mr. Lichtman and Mr. Nessen, Mr. Lichtman also discussed the matter of such damages with three other academics who were identified as subject matter experts in the field of statutory/punitive damages.

I heartily recommend these types of presentations by Mr. Lichtman (very professionally done), and do hope that others follow his lead in other legal fields.
3.6.2009 1:27am
Scote (mail):

Much as I may dislike the RIAA I dislike the people fighting them even more. If it were people fighting unrippable CDs or other time shifting issues I might feel for them, but wanting material without paying for it is another matter entirely.


You are making the false and unwarranted assumption that all of the defendants are guilty. The RIAA's factory litigation juggernaut does not care about whether defendants are actually guilty, they use the full force of the music industry in litigation regardless of whether the facts support their case. They have sued dead people, people who don't own computers, etc, because they are illegitimately using the lawsuits to scare the general public with the might of the RIAA rather than for the the lawful purpose of recovering actual damages--thus actual infringement is immaterial to their purposes.
3.6.2009 1:28am
swg:
Boy, Prof. Lichtman tried really hard to engage Prof. Nesson on some specific and interesting points but Nesson just totally missed it, sticking to his litigation talking points. Bummer.
3.6.2009 2:24am
Splunge:
The RIAA is run by the same branch of the Illuminati that ran The Tobacco Industry in the 1990s, and in addition to impoverishing music-loving but strictly law-abiding widows and orphans they cause cancer, heart disease, and Bob Dole's erectile dysfunction with their mind rays.

Fortunately there are brave and noble lawyers who, for a small 90% cut of the proceeds, will save us again from the forces of darkness by litigating a lawsuit for $$$damages bigger than even Obama's stimulating package.

I know it's all true, because I read it on teh Internets!
3.6.2009 3:21am
Bored Lawyer:

illegitimately using the lawsuits to scare the general public with the might of the RIAA rather than for the the lawful purpose of recovering actual damages--thus actual infringement is immaterial to their purposes.


While frivolous lawsuits are inexcusable, deterring infringement by others is a very legitimate purpose of intellectual property litigation.
3.6.2009 8:02am
Scote (mail):

While frivolous lawsuits are inexcusable, deterring infringement by others is a very legitimate purpose of intellectual property litigation.


No, that is not a legitimate legal purpose of a civil lawsuit. "To deter infringement by others" is not a legitimate claim for relief.

You mistake business reasons for bringing a civil lawsuit (however counter productive they may actually be) for legal ones. You seem to have been sucked into the RIAA's false claims.
3.6.2009 9:42am
Bored Lawyer:

No, that is not a legitimate legal purpose of a civil lawsuit. "To deter infringement by others" is not a legitimate claim for relief


Scote:

Do you have any authority for your assertion? There is plenty of authority that in fixing damages (especially statutory damages) deterrence of both the defendants and others is to be taken into account by the Court.

Of course, you still need a real claim of infringement. But that does not mean you have to be focused solely on the harm caused by that single defendant.


You seem to have been sucked into the RIAA's false claims.


No I have been practicing IP law since before RIAA started its enforcement efforts.
3.6.2009 10:30am
Scote (mail):
Well, bored, since you are the experienced IP lawyer, show me a citation where "To deter infringement by others" has been found to be a legitimate claim for relief. I'll wait.
3.6.2009 10:39am
MCM (mail):
Well, bored, since you are the experienced IP lawyer, show me a citation where "To deter infringement by others" has been found to be a legitimate claim for relief. I'll wait.


I think you're each using talking about different things. "Deterrence" is not a legitimate cause of action, but it is a legitimate consideration in calculating damages. That's the whole point of punitive damages, for example. Here, it's pretty obvious that Congress set these damages so that large organizations would be deterred from infringing.

But like punitive damages before they were limited by a string of cases, statutory damages for copyright violations are completely out-of-whack with reality. I have no idea if the constitutional argument holds any water, but simply from a policy perspective, the statutory damages are absurd.
3.6.2009 11:31am
Alligator:

Nesson just totally missed it, sticking to his litigation talking points


True, but I don't think it would have been wise to deviate from his litigation talking points. Any statement made by an opposing party is admissible and I'm pretty sure the includes statements by the party's attorney, who is acts as an the client's agent and fiduciary.
3.6.2009 1:16pm
Ray Beckerman (mail) (www):
Many of you are going down the same phony path that Mr.Lichtman and Mr. Nesson went down, ignoring the actual issue.

The question is not whether statutory damages may exceed the actual damages, but by how much. I.e., should the disproportionality/due process test applicable to punitive damage awards be applied to statutory damages, since the Supreme Court's rationale in coming up with the punitive damages principle was derived from an analysis of statutory damages?

In one hour the participants managed to discuss not a single one of the cases, nor a single one of the law review articles, suggesting or outright saying that it should.

If you don't think that's bizarre....
3.6.2009 1:50pm
Ray Beckerman (mail) (www):
For those of you who wish to read up on the subject you may wish to start here. The defendant's brief and reply brief in UMG v. Lindor might also be of interest.
3.6.2009 1:58pm
www.lyricsvideo.net (mail) (www):
The RIAA is run by the same branch of the Illuminati that ran The Tobacco Industry in the 1990s, and in addition to impoverishing music-loving but strictly law-abiding widows and orphans they cause cancer, heart disease, and Bob Dole's erectile dysfunction with their mind rays.
3.7.2009 10:32am
Max Kayden (mail) (www):
Based on the recent punitive cases for torts, we should see IP punitives come down 1:1 actual:punitive. That means no more 3x damages in willful patent infringement, and no more statutories in copyright infringement. In fact, the labels only take 60-70% of that $.99 song, so lets say it's $.70 for the label per song. Let's say the kid uploaded 24 songs by plaintiff labels (like Jammie Thomas did), so that's $.70 * 24 for actual damages, and multiply by 2 to include punitive damages. We're looking at $33.60 in damages suffered by the record labels. But that's assuming that the agent of the label downloading the song is infringement. You still have the making available problem.

How much should damages be for making available? I talked to one guy who said you should be able to statistically estimate damages. What the label would do is start sharing files itself, and see how often people downloaded. If a song is downloaded usually once every 5 days, and the kid shared for 20 days, you could hit him for 4 infringements. Now there are problems on some of these networks with supernodes so the label's data will not hold globally, but it's much better than simply guessing (which is what the courts do now).

I mean, you hear all these claims about billions of dollars lost to piracy in every press release and "study", but the content industry only asked for $13 million in the TPB case.
3.7.2009 10:33am
Doug Lichtman:
I won't say much here, as I already have gotten to say a great deal in the podcast itself. But, to briefly respond to Ray Beckerman and some of the other posts:

1. We do talk in the show about the cases Ray points to. Tom Colby, Cathy Sharkey and I all talk about the punitive damages caselaw and how it has established some guidelines about the proper ratio between actual harm and any punitive award. Tom Colby specifically says that the Court has read the Due Process clause to favor 1-to-1 ratios and become suspicious of anything more than a 10-to-1 ratio. Cathy Sharkey points out that cases have nonetheless allowed huge ratios (512-to-1) and explains that there are situations where that does pass muster, for instance because actual damages are hard to prove, or Congress has thought it appropriate to just allow token damages as the baseline. There are then good questions to ask about whether this all applies to statutory damages (which are deterrent, at least in part, rather than punitive; and which are set by statute, not by completely unbridled jury discretion). So Ray's criticisms are just off the mark when he says that we miss these issues. Ray should probably more honestly say that he disagrees with our punchlines, not our process.

2. A later comment raises the "making available" concern, which is going to be relevant too. That said, the law on punitive damages (at least) is clear: you can raise punitive damages to account for harm that was likely, whether or not it actually happened. Applied here, that makes "making available" relatively unimportant. Whether the law recognizes a legal violation for putting something in a shared music folder or not, the harm that likely accrues from that action is fair game for a statutory damages award based on the underlying illegal copying.

3. Lastly, for all the tough words against RIAA -- and, as I say in the show, I'm no fan of these cases either -- it is interesting that the one jury that has ruled on damages came back with a big (200k-ish) number. So it's not just the music industry that thinks that there ought to be a damages number well above the $3 or $30 level here.

Thanks so much to everyone who listened to the podcast and/or took the time to comment here. Ray, I will reach out to you next time we touch a topic in these areas as I'd love to have a more productive conversation with you than the comments here and above allowed.
3.7.2009 1:31pm
Ray Beckerman (mail) (www):
Dear Doug

It is by now well established that punitive damages are subject to a due process test. We do not need to hear 5 scholars tell us what we already know and the United States Supreme Court has unmistakably determined.

What the Supreme Court has not yet decided is whether statutory damages will be subjected to the same due process test.

That is the only issue that was on the table for your discussion, and it was the subject you steered clear of.

There are at least 4 cases and 2 law review articles which have dealt with the issue of whether the due process principle applicable to punitive damages awards will be applied to statutory damages. The 4 cases are Parker v. Time Warner (2nd Cir), Napster (ND CA), UMG v. Lindor (EDNY) and Atlantic v Brennan. Quotes &cites to the 4 cases appear in the top of the sidebar of my blog, at http://recordingindustryvspeople.blogspot.com. The 2 law review articles are cited in the reply memorandum in UMG v. Lindor, and 1 can be found online in the November, 2006, post about the UMG v. Lindor case.

I don't know if there are any authorities to the contrary, but I do know that the RIAA lawyers have not been able to show me any.

I was disappointed not to hear ANY of the authorities discussed, in what was supposed to be a discussion of that very issue.

Doug were I in your position I would not be defending the oversight, I would be apologizing for it.

Of course you should have reached out to me. I'm the only person who's litigated the issue with the RIAA and won on it, to the extent the judge needed to decide it, in UMG v. Lindor.

As to reaching out to me for a future panel, I would not accept the offer unless you agreed to act as a moderator rather than as an advocate.
3.7.2009 10:18pm

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