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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."
Mostly the court said the defense sucked and they WOULD have been receptive to such fair use tactics but the defense didn't help them out there.
http://arstechnica.com/tech-policy/news/2009/12/how-team-tenenbaum-missed-a-chance-to-shape-p2p-fair-use-law.ars
This isn't something that applies to all future cases.
I was under the impression that space shifting from CD to "mp3" was already settled as fair use. What goes?
Courts can bloviate all they wish. You're confusing two legal concepts: The case and controversy requirement, and dicta.
A court requires an actual case with actually adverse parties.* This is the case and controversy requirement.
That said, courts can bloviate all they wish. The fancy legal term is dicta. It is not binding on any court, not even the same Court. Sometimes distinguishing between the real opinon and dicta can be tricky.
However, if the Court's reasoning is strong, other parties will incorporate it into their arguments and it will be adopted by other courts making their own decisions.
You are correct in your statement that Article III Section 2 prevents courts from rendering advisory opinions, i.e. judgements on controversies not before the court. However, courts are free to offer opinions in dicta which can guide, but are not binding, to future cases. This is all that this was.
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".
Ray Beckerman +5 Insightful
It may wind up being the RIAA that's going to "need an appeal".
That would be good news indeed, can you expound on that a little?
Liability is a foregone conclusion, since Mr. Tenenbaum formally "admitted liability" at the trial. But damages are not.
If the Court follows traditional copyright law principles, it will hold that there was no evidence in the record from which any statutory damages award beyond $750 per infringed work is permissible, thus limiting the award to a maximum of $18,000 under copyright law.
And if the Court then follows traditional constitutional principles, it will hold that any recovery beyond $1.40 per infringed work (or total of $33.60) is unconstitutional.
If the RIAA obtains a monetary damages award of $33.60 I would expect Mr. Tenenbaum to refrain from appealing, and I would expect the RIAA to be the one to file an appeal.
Ray Beckerman +5 Insightful
It may wind up being the RIAA that's going to "need an appeal".
That would be good news indeed, can you expound on that a little?
Liability is a foregone conclusion, since Mr. Tenenbaum formally "admitted liability" at the trial. But damages are not. If the Court follows traditional copyright law principles, it will hold that there was no evidence in the record from which any statutory damages award beyond $750 per infringed work is permissible, thus limiting the award to a maximum of $18,000 under copyright law. And if the Court then follows traditional constitutional principles, it will hold that any recovery beyond $1.40 per infringed work (or total of $33.60) is unconstitutional. If the RIAA obtains a monetary damages award of $33.60 I would expect Mr. Tenenbaum to refrain from appealing, and I would expect the RIAA to be the one to file an appeal.
I think the RIAA's argument that statutory damages need not be constitutionally limited to the price of the songs is a good one, and the argument that statutory damages in excess of proven damages are unconstitutional is a bad one. Congress expressly allowed statutory damages as an alternative to actual damages to cover situations where proof of actual damages was too vague or speculative. That applies here, and certainly includes a claim that the only damages were $1.40 per song due to Tenenbaum not purchasing them. He was uploading them too - his violation of copyright wasn't just making a single copy for his own use, but rather distributing them to others. Thus, the damages would include $1.40 for every he uploaded each song to, and everyone they then uploaded the song to. That's going to be much higher than a total of $33.60. How much higher? We don't know - it's too speculative to say, which is why Congress put in the statutory damage provisions.
Additionally, your argument that the court should limit them to $750 per work is unsupported. The statutory range of $750-30k per work is a question of fact for the jury. The judge can't overrule that within the range without evidence of clear error - he could limit the decision if it was at the $150k/work willful level, for example, or he could limit it to $200/work for innocent infringement (he can't, actually, in this case, on these facts), but he can't say "the range is right, but I'm using the lower limit". There's simply no basis for it.
No, the best argument is one that they apparently failed to raise - the jury was presented with an instruction, number 110, that willful infringement requires only knowledge or reckless disregard of the copyright, and thus damages up to $150k per work are available, thus leading the jury to pick the $18,000 figure. The RIAA briefed in support of this instruction, and I can't find a copy of the opposition brief or the ruling, but the final jury instruction was exactly what the RIAA wanted. I believe it's incorrect as a matter of law, because their interpretation expressly removes the $750-30k range of damages from ever being able to be applied. Instead, it would be $200, or $150k, but that's not what Congress said. They're misreading and misapplying both the case law and the statute.
Incidentally, I was the one who sent you an email a month ago, discussing a paper I'm writing and asking if anyone had argued this point. I haven't found anything yet. Paper's about half done and will be done before January 4th. Any interest in reviewing it and potentially filing an Amicus Brief?
Of course, there are always exceptions. For example, Jane Roe had already given birth by the time of the ruling in Roe v. Wade, so her case was moot. The Supreme Court made a decision anyway, because it would be difficult to complete a court case during the period of a woman's pregnancy.
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.
Your comment has a lot of fallacies in it. You are ignoring the large body of case law on proportionality of statutory damages; you are ignoring the fact that the Constitution takes precedence over any statute; you are ignoring the Supreme Court's caselaw on "punitive awards"; you are implying there is some prohibition against "uploading", while there is none.... what there is is a prohibition against 'distributing copies to the public by sale or other transfer of ownership, or by rental, lease or lending', none of which have been proven; you are suggesting that damages can be based on speculation, which is not the case; you are assuming that an unauthorized download = a lost sale, which is not the case.
Ray Beckerman +5 Insightful