Court Says Fair Use May Hold In Some RIAA Cases

NewYorkCountryLawyer writes "In SONY BMG Music Entertainment v. Tenenbaum, the Boston RIAA case in which the defendant, represented by Charles Nesson of Harvard Law School, admitted liability at his trial, the Court has entered judgment in favor of the RIAA for the monetary award of $625,000 fixed by the jury. However, the Court left open the questions of whether the amount is excessive, and whether attorneys fees and/or sanctions should be awarded, and has scheduled further briefing of those issues. The Court granted the RIAA much, but not all, of the injunctive relief it requested. In an unusual step, the Court issued a 38-page decision (PDF) explaining in some detail the Court's views of the Fair Use defense in the context of cases like this, and indicating that there are some factual scenarios — not applicable in this particular case — in which it might have concluded that the claims were barred by Fair Use. E.g. it declined to rule out the possibility that creation of mp3 files exclusively for space-shifting purposes from audio CDs a defendant had previously purchased might constitute fair use."

Comments

Re:I didn't know they could do that

[NewYorkCountryLawyer]

Problem now is, how does Tenenbaum get an appeal?

Well he doesn't need an appeal. The real question -- the excessiveness of the verdict under (a) copyright law and (b) constitutional law -- hasn't been decided yet. The judge had earlier indicated she would be getting to that only after judgment had been entered, and a motion to set aside the judgment had been made. She has scheduled that for a January 4th deadline, with the RIAA getting 14 days from the making of such a motion to respond.

It may wind up being the RIAA that's going to "need an appeal".

Re:I didn't know they could do that

[Theaetetus]

IANAL, as I will doubtless demonstrate, but I'm curious about some of the legal principles here.

Statutory damages as an alternative to actual damages makes sense, but is there any legal expectation that the statutory damages will be roughly proportional to the actual damages?

Yes, and no. In the copyright acts of 1790 through 1976, Congress talked about statutory damages as non-punitive - i.e. roughly proportional to the actual damages. However, in the 1976 Act and the more recent amendments and acts including the DMCA, Congress talked about the deterrent effect, particularly where software, music, and movies can be copied with a click of a button.

Under the current law, the damages are supposed to be roughly proportional - a best estimate, if you will - but also have deterrent effect, meaning they can be higher.

Add to this a crucial point which Ray and Tenenbaum's attorneys disregard in discussing damage levels as being $1.40 per work: under copyright, damages include not just the cost to the infringer of a license, but the lost profits to the copyright owner. This is explicit, even going back to the original 1790 Act - damages include not just the infringer's profits (which may be zero, as here where Tenenbaum isn't charging for copies), but also the lost sales to the owner due to the work now being widely distributed royalty-free. In the 1790 Act, statutory damages were one dollar per page - that's way more than the cost, particularly back when the entire book may cost only a few dollars.

Assuming treble damages, the minimum damages of $750 imply that a reasonable low guess to the damages from downloading one song and uploading in the process would be $250, or $75 if we go to the ten-times limit the Supreme Court said they'd almost certainly not allow.

Treble damages aren't actually an issue. There's no explicit provision for them in the copyright act.
One important thing to note when considering the lower limit of $750 - that's "per work". So, if you make a single copy of a song, it's $750. If you upload that copy to 10 people, it's still only $750. If that copy ends up downloaded by tens of thousands of people... it's still $750. That's what the statutory damage levels are trying to do - the copyright owner doesn't have to run around and find every single person that downloaded a song or bought a copy of your illegally-reprinted book. Instead, we can just assume you made a number of copies causing about that much in damages. If you didn't, the plaintiff gets a small windfall - but if you did, the defendant is relieved of a much higher liability.

It seems to me that these damages are intended as straight punishment, since they're way out of line with any halfway reasonable estimate of damages multiplied by any acceptable multiplier. In that case, I'd be a lot more comfortable with them if they were treated as part of criminal law, with such protections as "no reasonable doubt" rather than "preponderance of the evidence".

See my discussion above - they're not actually that far out of line. As for criminal law, the copyright act does actually have a criminal provision... and this is what the RIAA is misreading:
17 USC 506 makes it a misdemeanor (meaning up to a year in jail) for willfully infringing a copyright for purposes of commercial or private financial gain; or by "making it available on a computer network". Sounds a bit familiar, huh?
Specifically, the statutory damage provisions include $200 for "innocent infringement", $750-30,000 normally, and "up to $150,000 per work for willful infringement". Now, the RIAA defined "willful" as essentially "anything not innocent", which makes that middle $750-30k range useless. And unbelievably, Tenenbaum never argued that one, or at least not well.

My argument (and the paper I'm drafting) is that the jury shouldn't have been asked to come up with a per-work damage amount of "up to $150k", but rather that they should have been presented with the $750-30k range... They likely wouldn't have picked 18k then, but something lower, which would have been more reasonable.