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.”

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.