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The cost of free file-sharing

The Associated Press reports that the jury in Capitol v Thomas (formerly Virgin v Thomas) found Jammie Thomas liable today for willfully infringing 24 copyrighted songs and assessed damages of $9,250 per track -- well above the $750 minimum, but nowhere near the $150,000 maximum, either. The grand total is a stunning $222,000.

That may be the kind of deterrent message the RIAA was hoping for, even if many observers will interpret it the courtroom equivalent of pounding a fly with a sledgehammer. More important, though, the stage is set for an appeals court to scrutinize one of the foundations of the RIAA's lawsuit campaign, namely, that having a bunch of songs in a folder that's shared across the Internet violates a copyright holder's right to limit distribution of his or her works.

Ars Technica's Eric Bangeman, who attended the trial in Duluth, reported that U.S. District Judge Michael J. Davis initially planned to instruct the jury that merely making a song available for copying through a peer-to-peer network did not violate copyrights. Instead, Davis planned to say, a song has to be transfered. But Richard Gabriel, the RIAA's lead attorney in the case, persuaded Davis to give exactly the opposite instruction, leaving the jury a relatively easy path to take to a verdict against Thomas. That instruction could form the basis of an appeal, providing more clarity on an issue that's the subject of some dispute. One potential problem with the instruction, according to one copyright lawyer I consulted, is that it would impose liability even on those who could prove that no songs were ever copied from their shared folders. In other words, it turns "making available" into "distributing" even in the absence of any distributions.

Jay Flemma, an attorney who specializes in the music industry, said he was "horrified" by the per-song damages (which, by my calculations, equate to 13,214 lost iTunes sales per song). And he worried that the verdict would reinforce the major labels' inclination to do business the way they want to do it, rather than embracing the Internet and new distribution models. "I don't think that they're going to abort the things that they're doing," Flemma said. "It'll just take a lot longer. We should have had these advances years ago, and they've been dragging their feet." If that's the result, then today's verdict truly will be a lose-lose outcome.

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Times editorial writer Jon Healey pens opinion pieces about a variety of business issues, and blogs about technologies that are changing the entertainment industry's business model.

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