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Tenenbaum's Final Brief — $675K Award Too High
NewYorkCountryLawyer writes "The final brief (PDF) filed by the defendant Joel Tenenbaum in SONY BMG Music Entertainment v. Tenenbaum seems to put the final nail in the coffin on the RIAA's argument that 'statutory damages' up to $150,000 can be awarded where the record company's lost profit is in the neighborhood of 35 cents. Not only do Tenenbaum's lawyers accurately describe the applicable caselaw and scholarship, something neither the RIAA nor the Department of Justice did in their briefs, but they point out to the Court that the US Court of Appeals for the First Circuit — the appeals court controlling this matter — has itself ruled that statutory damages awards are reviewable for due process considerations under the guidelines of State Farm v. Campbell and BMW v. Gore. The brief is consistent with the amicus curiae brief filed in the case last year by the Free Software Foundation."
The argument that the unknown, indeterminable, unquantifiable amount of music that Tenenbaum actually "distributed" impacted RIAA sales in any significant way (much less than to the tune of $675K) is total lunacy, case law be damned.
Not necessarily... Say the RIAA has a new single, and they want to license it to retailers such as H&M or the iTunes Music Store. They go to them and say "we'll grant you a license to distribute this song in your store for 20% of your proceeds, with a minimum of $50k per year, for the next five years," and the other side says, "why the fark should I do that, it's available free on the Gnutella network. Sure, we'd have some sales, but if people can get it free, they'll just do that. We won't make that $50k back, so no. Make it $1k per year, and you've got a deal."
That's $49k per year in lost profits for the RIAA for that song, due to the loss of value of the distribution right caused by the infringer.