Litigation
This paragraph should give a general overview of the legal landscape: how long the RIAA has been doing this, who they target, how many people they sue, etc.
Sent over 800 pre lits to College students in the past month, 1300 in since mid Aug
Capitol v. Thomas
In the Jammie Thomas case, Defendant Thomas recently filed a motion for a new trial, or in the alternative, for a remittitur of damages. Thomas argues that songs are typically purchased over the internet for about $1.00, approximately 70 cents of which is profit. Thus, argued Thomas, the total damages suffered by plaintiff as a result of the 24 downloads was $16.80. (Thomas also argues that "the actual damages are zero dollars. Because the only evidence of downloading was to plaintiff's agents, MediaSentry, who obviously would not have bought the 24 song recordings if defendant has not allegedly made it available." (Thomas Brief, p. 2, Docket Entry 109, 06-1497, filed 10/15/07). In State Farm Mutual Insurance Co. v. Campbell, the United States Supreme Court held that a ratio of punitive to actual damages in excess of 9:1 would be pressing the constitutional boundaries. Under this rationale, punitive damages should not exceed $151.20. See also BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996)(setting forth three "guideposts" to consider in evaluating the excessiveness of punitive damages, including: (1) the degree of reprehensibility of the conduct; the ratio of the punitive damages to the actual harm; and (3) comparable civil or criminal sanctions).
In Zomba Enterprises v. Panorama Records, 491 F.3d 574 (6th Cir. 2007), the Sixth Circuit court of appeals held that it was an open question as to whether or not the Supreme Court's standards for reviewing punitive damages under Campbell and Gore apply to statutory damages, such as those awarded under the copyright act. Zomba, 491 F.3d at 587. It refused to reach the issue, choosing instead to apply the test set forth in St. Louis, I.M. & S. Ry. Co. v. Williams, 251 U.S. 63, 66 (1919)(are the damages "so severe and oppressive as to be wholly disproportionate to the offense and obviously unreasonable"). Other courts, however, have concluded that the Campbell/Gore due process analysis should be applied even in cases involving statutory damages. See, e.g., Parker v. Time Warner Entm't Co, 331 F.3d 13, 22 (2nd Cir. 2003)(citing Campbell and Gore and holding that "in a sufficiently serious case" due process may require courts to reduce or remit excessive statutory damage awards); In re: Napster, 2005 WL 1287611 at *10-11 (N.D. Cal. 2005)("an award of statutory damages may violate due process is the amount of the award is 'out of all reasonable proportion' to the actual harm caused by defendant's conduct.") S ee also, J. Cam Barker, Grossly Excessive Penalties in the Battle Against Illegal File Sharing: The Troubling Effects of Aggregating Minimum Statutory Damages for Copyright Infringement, 83 Texas L. Rev. 525 (2004).
... a statutory damage of $750 does seem like an outrageously high ratio.
In view of the fact that most songs can be downloaded for $0.99, a statutory damage of $750 does seem like an outrageously high ratio. The complexity of the analysis is compunded further by the fact that one study has shown that file-sharing has not statistically significant effect on album purchased. Felix Oberholzer & Koleman Strumpf, The Effect of File-Sharing on Record Sales: An Empirical Analysis, 23-24 (Mar. 2004). The issue of unconstitutionally excessive damages is an important constitutional issue presented by the RIAA downloading cases and will likely require the ultimate intervention of the United States Supreme Court. It is a defense that should be asserted early in the case, and discovery should be specifically directed to the issue of lost profits for the purpose of calculating ratio.
Elektra v. Barker
One of the major issues in Electra v. Barker is the issue of "distribution," as that term is described in 17 U.S.C. 106(3). It is important to understand the significance of the distinction between a claim based on section 106(1) and a claim based on 106(3). Subject to various limitations, Section 106(1) grants upon copyright holders the exclusive right to "reproduce the copyrighted work," where as Section 106(3) grants an exclusive right to "distribute copies…by sale or other transfer of ownership, or by rental, lease or lending." These are separate and discrete violations of the Act, which the industry is attempting to muddle "in hopes that an expansive judicial interpretation of the distribution right may support quick summary judgments based on the bare fact that a defendant has 'offered' files for download. " (Amicus Brief of the Electronic Frontier Foundation in Support of Motion to Dismiss, Electra v. Barker, 05 C 7340 (S.D.N.Y. 2007), p. 1). There is an important issue here, as framed by the ECF: "do intangible computer network transmissions infringe the 106(3) right?" Id., citing R. Anthony Reese, The Public Display Right: The Copyright Act's Neglected Solution to the Controversy Over RAM Copies, 2001 U. of Ill. L. Rev. 83, 122-138 (2001).
There seems to be a split in the federal circuit court of appeals over this issue. The Second Circuit, for instance, held in Agee v. Paramount, 59 F.3d 317 (2d. Cir. 1995), that "distribution is generally thought to require transmission of a 'material object' in which the sound recording is fixed: a work that is of 'more than transitory duration'" Id. at 325. The Second Circuit stated that It would leave of another day the question of whether "disseminations must always be in physical form to constitute distributions. Id., citing Playboy Enterprises v. Frena, 839 F. Supp. 1552 (M.D. Fla. 1993). The Ninth Circuit, in contrast, stated in A∓M Records v. Napster, 239 F.3d 1004, 1014 (9th Cir. 2001) that "Napster users who upload file names to the search index for others to copy violate plaintiffs' distribution rights." This statement, however, may simply be unfortunately worded dicta, as the issue of the scope of section 106(3) was not an issue briefed on appeal. (Amicus Brief of the Electronic Frontier Foundation in Support of Motion to Dismiss, Electra v. Barker, 05 C 7340 (S.D.N.Y. 2007), p. 7.
A widening split in authority is also developing at the district court level. Compare, for instance, Arista Records, Inc. v. MP3Board, Inc., 00 Civ. 4660, 2002 WL 1997918 at *4 (S.D.N.Y. Aug. 29, 2002)(posting on MP3Board website of links leading to infringing audio files does not establish unlawful dissemination of copies of such files to the public, holding "[i]nfringement of the distribution right requires an actual dissemination of ... copies") (emphasis added); (citing 2 Nimmer on Copyright § 8.11[A], at 8-124); In re Napster, Inc., 377 F.Supp.2d 796, 802 (N.D.Cal. May 31, 2005) (copyright owner must prove that the defendant "actually disseminated" copies of the copyrighted work to members of the public); Perfect 10 v. Google, 04-9484, p. 23, n.11 (C.D. Cal. 2006); With, for instance: Marobie-Fl, Inc. v. National Assoc. of Fire Equip. Distribs, 983 F. Supp. 1167, 1173 (N.D. Ill. 1997); Playboy Enterprises v. Hardenburgh, 982 F. Supp. 503, 513 (N.D. Ohio 1997); Playboy Enterprises v. Frena, 839 F. Supp. 1552 (M.D. Fla. 1993). Due to this split, it seems this issue too (like the damages issue) may be headed to the United States Supreme Court.
Before P2P file sharing the courts seemed to have no problem ruling that distribution required actual dissemination. See e.g., Obolensky v. G.P. Putnam's Sons, 628 F.Supp. 1552, 1555-56 (S.D.N.Y.) (publisher did not infringe on copyright owner's right of distribution of copyrighted book by listing the book in a trade publication as belonging to publisher where publisher neither copied the book nor sold any copies of the book; "there is no violation of the right to vend copyrighted works ... where the defendant offers to sell copyrighted materials but does not consummate a sale"), aff'd, 795 F.2d 1005 (2d Cir. 1986); 2 Paul Goldstein, Copyright § 5.5.1, at 5:102 to 5-102-1 (2d ed. 2000 & Supp. 2005) ("an actual transfer must take place; a mere offer for sale will not violate the right"); SBK Catalogue Partnership v. Orion Pictures Corp., 723 F.Supp. 1053, 1064 (D.N.J. 1989) (merely "authorizing" a third party to distribute copyrighted works without proof that the third party actually did so does not constitute copyright infringement); CACI Intern., Inc. v. Pentagen Technologies Intern., 93 Civ. 1631, 1994 WL 1752376 at *4 (E.D.Va. Jun. 16, 1994) (marketing of software package without actually distributing it does not constitute copyright infringement). Thus, it is surprising courts are becoming confused on the issue now.
Notably, in the Thomas case the court overruled defendant's objections and allowed the case to proceed to the jury on a version of instructions that freed plaintiffs from the burden of proving dissemination as an element. Indeed, defendants would be urged to fight vigorously for an instruction setting forth the following four elements:
- "Distribution" – i.e., an actual dissemination of physical copies. See above cited cases
- "Of copies or phonorecords" – as Goldstein explains, "Section 106(3) is unequivocal that, for the distribution right to be infringed, copies or phonorecords must be distributed. The technologies of the Internet present a challenge…[but] [h]owever deeply Internet technologies many have undermined the economies of the public distribution right, it should be self-evident that it is the Role of Congress, not the courts, to repair the omission…" 2 Goldstein on Copyright, 7.5.1 at 7:127
- "To the public" – Nimmer: "it is not any distribution of copies or phonorecords that falls within this right, but only such distributions are 'made to the public'…[A] limited publication…to a limited group…for a limited purpose and not made to the public at large, should not infringe this right." 2 Nimmer on Copyright 8.11{a}, at pp. 81-148 (for elaborate discussion of this point)
- "by sale, other transfer of ownership, rental, lease or lending" – 2 Goldstein on Copyright 7.5.1 at 7:125-126 ("an actual transfer must take place, a mere offer of sale will not infringe the right."
Evidentiary Burden
There is every reason to attempt to put the RIAA to their proofs in these matters. For instance, as United States District Judge David Larimer has held, "although the complaint establishes that someone using the 'KaZaA' on-line peer-to-peer filing sharing service uploaded the Copyrighted Recordings, or otherwise offered them for distribution, the complaint does not identify details such as the time period during which the violations allegedly took place, or explain how that user, identified only by the username heavyjeefmc@KaZaA, was determined to be the defendant." (Atlantic Recording Corp. v. Jeff Dangler, 07 C 6139 (W.D.N.Y.), order dated 10/23/07, p. 4).
An appellate bankruptcy panel in the Ninth Circuit has recently dealt with the issue of the evidentiary foundation required for the admission of computer records. See, In Re: Vinhee, 336 B.R. 437 (9th Cir. 2005). The court adopted the 11-step foundation articulated by famed evidence scholar, Professor Edward J. Imwinkelried. See, Evidentiary Foundations, sec. 4.03[2] (5th Ed. 2002): (1) the business uses a computer; (2) the computer is reliable; (3) the business has developed a procedure for inserting data into the computer; (4) the procedure has built-in safequards to ensure accuracy and identify errors; (5) the business keeps the computer in a good state of repair; (6) the witness had the computer readout certain data; (7) the witness used the proper procedures to obtain the readout; (8) the computer was in working order at the time the witness obtained the readout; (9) the witness recognizes the exhibit as the readout; (10) the witness explains how she recognizes the readout; and (11) if the readout contains strange symbols or terms, the witness explains the meaning of the symbols or the terms for the trier of fact. Id. The court in Vinhee held that the tendered computer records were not admissible in evidence, reasoning: "[t]here is no information regarding American Express' computer policy and system control procedures, including control of access to pertinent databases, control of access to pertinent programs, recording and logging of changes to the data, backup practices, and audit procedures utilized to assure the continuing integrity of the records." Vinhee, 336 B.R. at 448-49.
