Statutory Damages Under The Copyright Act - Lessons From LimeWire

Arista Records - Throwing a Funeral Party Over Lime Wire?



Arista Records LLC et a. v. Lime Group LLC (Lime Wire) (06 CV 5936) has recently spawned a series of decisions of interest for those who follow the Copyright Act's provisions on statutory damages.   More posts on statutory damages here.

Right now the First Circuit is deciding the Tenenbaum case which includes a challenge to an award of statutory damages against a student downloader.  More on Tenenbaum here and here.

But in the Lime Wire case (background here), Judge Kimba Wood granted summary judgment on May 11, 2010 finding Lime Wire liable as a secondary infringer for running a service that facilitates peer-to-peer file sharing, full decision here.   An interesting aspect of the case is that Lime Wire's founder was held to be personally liable.

But following Judge Wood's grant of summary judgment, a recent flurry of decisions relating to the Copyright Act's statutory damages provisions, 17 USC 504(c) have emerged.

In Chapter 17 of Copyright Litigation Handbook (West 2010), I cover issues relating to damages under the Copyright Act.   Chapter 18 covers the related issues of costs and attorneys fees.

On March 10, 2011, Judge Wood considered the issue of whether Lime Wire, a secondary infringer, was liable for multiple awards of statutory damages for each copyrighted work it permitted to be infringed, or only one.   Analyzing the provisions of 17 USC 504(c) and its legislative history, Judge Wood found that the record companies could only recover from Lime Wire one statutory damages award for each copyrighted work infringed.   The decision is worth the read, find it here.

But how does one prove ownership and infringement of 11,000 plus works?  And how do you prove that each owner owned it at the time the work was infringed?   Judge Wood's decision of March 29, 2011 is here.   Review each category, and you have a neat primer on how to prove copyright ownership in a variety of contexts.   A unique angle is that Plaintiffs hired private investigators in 2010 to illegally download one of each of the works.   Defendants challenged the "timing" of ownership.   Judge Wood granted summary judgment on ownership, since that was essentially unchallenged by the evidence.

Practice Tip:   Judge Wood points to the Second Circuit's case law showing that if a litigant challenges evidence submitted on a summary judgment motion, the proper remedy is a motion to strike the evidence.

On April 4, 2011, Judge Wood looked at the question of whether a statutory damages award was available for each song, or for each sound recording (an album is one sound recording and ordinarily supports only one statutory damages award).   Judge Wood's decision here.    Judge Wood ruled that if infringements of individual songs could be shown prior to release of the album, statutory damages awards would be available for infringements of those individual songs.

On April 6, 2011, Judge Wood considered the question of whether Lime Wire was "off the hook" as a secondary infringer where the record companies had already obtained judgments against primary infringers.  Judge Wood's answer: "no".   The damages trial is scheduled for May 2, 2011.

The April 6, 2011 decision below:

Lime Wire Partial Summary Judgment April 6, 2011



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Fair Use Fridays: What do you do with a drunken sailor?

What do you do with a drunken sailor? Johnny Depp stars...



Trance version...



A gamer's Salute to Piracy

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Music Copyright PSA

Copyright PSA: interviews with music industry execs about music filesharing, illegal downloads, how musicians make money, watch a guy get fired because of Limewire.

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RIP Ben Sheffner's Copyrights and Campaigns Blog

Copyright blogger Ben Sheffner has left the blogosphere to work for the MPAA, his thoughtful pro-copyright stance I am sure will be missed by many.   His blog was marked by roll-up-your sleeves digging to get at original documents and really follow a case.

See Ben's parting message here.

See Ben's endorsement of the views of CopyHype here.

Good luck in the new job, Ben!

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Fair Use Fridays: RJD2 Confesses To Ripping KFC Beats From Television

Remix RJD2 confesses to ripping KFC lyrics, HT to Mashable.

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Filmon.com Solicits Plaintiffs For Limewire Piracy Class Action Against CBS and CNET

More information here
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Fair Use Fridays: Mashup of Billboard Top 25 on YouTube

DJ Earworm is back, this 2010 mashup had over nine million viewers on YouTube.


This DJ Earworm 2009 mashup had over 34 million viewers on YouTube.

More posts on mashups here
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United States Pirate Party Platform - Abolish the DMCA!

Logo of the United States Pirate Party
(courtesy Wikipedia)

To learn about joining the United States Pirate Party, go here.

Platform (courtesy Wikipedia)

The Pirate Party's platform centers around issues of intellectual property. "Like its international counterparts, the USPP’s main practical concerns are digital intellectual property and privacy laws—specifically, the abolition of a 1998 digital U.S. copyright law, the reduction of copyrights to 14 years (from 95 years after publication, or 70 years after the author’s death), and the expiration of patents that don’t result in significant progress within four years (as opposed to 20 years)."[3]

Reform of TrademarkTrademarks are abused around the world, in that they contain elements which are protected by either copyright or patent. A single protection for trademarks should exist, and fair use provisions made as with copyright. Trademarks should also not appear as the central issue on any dispute not arising from fraud.

Abolition of Digital Rights ManagementAll DRM and similar schemes do are to encourage people to find ways to prevent loss by circumvention. DRM is the key issue in the DMCA, and the chief reason that our population is now breaking the law en masse. DRM itself also inhibits the rights of artists to have their works experienced in as close to a live act as possible.

Right to PrivacyRegulatory bodies are, by their very nature, governing. They should therefore be prohibited from interfering in a person's private affairs. However, people should remember that their private affairs should remain private. Passwords, encryption, and other forms of electronic privacy should be afforded the same privileges as sealed envelopes.

Right to Government TransparencyThe population should at all times understand what a governing body is doing, with or to whom it is doing these things, and for what reasons. Though there is a need for national security for so long as there are enemies outside of our borders, there should never be any issue with ordinary citizens who need information. Likewise, the responsibility of citizens is to ensure that information which is of a sensitive nature is handled in a sensitive manner, so that it does not fall into the hands of those who would misuse such information to harm human life.

Reform of CopyrightCopyright is flagrantly abused around the world, has an unreasonable term length, and is used to prevent, rather than promote, innovation. This is directly counter to its stated intent in the beginning, of protecting authors' works. Additionally, the right of use should never be in question; merely the right to be credited. The term should be reverted to the 14 year term of the Copyright Act of 1790, with a right to renew for 14 additional years, at most.

Right to AssemblePeaceful assembly is guaranteed by our Constitutional First Amendment, just as free speech and free press is. Permits to protest should only be necessary if protests are planning to be disruptive (marching down streets, etc.). Police should not have a right to—though they are currently not prohibited from—disrupting the exercise of the expression of unpopular free speech.

This also covers community organization, where the political and other needs of a community sometimes requires localized political activism. People need to be able to know that what they believe can be supported; and they need to know that what they believe can be correct—or corrected.

Reform of PatentPatent is abused extensively around the world, has become the chief legal means to suppress innovation, and is largely to blame for stymieing technological progress. The practice of shelving a patent (failing to develop a patented idea which competes with one's own ideas instead of developing both and allowing innovation to spring from them) is abhorrent, and needs to be curtailed within the law. Patents which fail to be developed or have significant progress in any four-year term should be unenforceable.

Right to Free PressSpeech is protected under our Constitution, even unpopular speech, though action carries with it consequences. However, recent erosion of the First Amendment by inattentive lawmakers has led to a suppressive ideology that endangers journalistic freedoms (a necessary freedom in order to keep governments, political parties, and every other organization honest).

Underscored by recent events in St. Paul, reporters who are arrested by mistake for being in an area to report the news should have all charges summarily dismissed unless they were in fact doing damage or harm. This should be a standing policy in all city governments. Reporters form a necessary part of our government process, in bringing truth to the public.

News agencies which seek to misreport the news cannot be trusted to serve the best interests of the people, but there is a difference between news and entertainment. News agencies should have the freedom to decide which is which. However, news agencies should also be restricted from becoming the mouthpieces of special interest. One of the major issues is the limitation of small media outlets. Big media should not control 80% of the market; there should be a limit to the amount of the market that large networks control in any area.

Rejection of the Concept of Copyright infringement or "Online Piracy"Pirate Party Members hold the idea that sharing anything online is piracy is absurd on its face. Some say that actual piracy requires forceful and aggressive acts, committed against those who would keep a cargo safe from harm. The cargo in this case of this viewpoint is the freedom to act. Members would take it from those who jealously guard it for themselves and divide it amongst everyone in the country.

The Pirate Party wants to "raid" the law and "carry away" (repeal) laws which do not serve those on their metaphorical boat. The trick of it is: we're all in the same boat. It is in service to those on our boat (the Earth) that we aim to help.

Members are not willing to accept that file sharing should be banned (and will take steps, once party members are in office, to ensure that any laws in this regard are adamantly opposed, since in their perspective technology isn't the problem, but rather education about what its proper use is). On the other hand, we do agree that there is a significant amount of wrong being done to our rights in the name of protecting those whose sole aim for over 50 years has been the control and manipulation of human minds. Brainwashing our population is against our national interest in maintaining a democracy.

Abolition of the Digital Millennium Copyright Act and related subsequent provisions within copyright lawThe Digital Millennium Copyright Act of 1998 provided for legal repercussions for circumvention of copy protection, as well as making backup copies of any media illegal. This act has resulted in the intimidation, prosecution, and/or conviction of tens of thousands of people in our country—people who are otherwise law-abiding and who are not interested in being labeled thieves or crooks for doing what the internet was intended to do: share ideas. This is therefore a First Amendment issue, being freedom of expression, and we call for a repeal of this highly illogical and vertically-oriented law on the grounds that it is simply a bad law.




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Kid Rock on Piracy and Copyright Infringement

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Piracy and Copyright Infringement: Department of Behavioral Investigation Report

A radical solution to the problem of piracy. More from the Department of Behavioral Investigation here.

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Copyright Law: Boston Judge Holds Jury Award Unconstitutional in Music Dowloading Statutory Damages Case

In Sony BMG Music Entertainment (07cv11446-NG)(D. Mass July 9, 2010), Judge Nancy Gertner has written a 61-page decision that is an intellectual tour-de-force - concluding that a $675,000 statutory damages award against a student named Joel Tenenbaum who illegally downloaded music and then shared the songs on peer-to-peer file sharing services.  Judge Gertner's decision is linked below via Scrib'd.

The judge reduced the statutory damages award to $2,250 for each of the thirty infringed works.  This was a reduction of 90% from the jury's award of $22,500 per song.

The Tenenbaum case was debated in an IP Colloquium moderated by Prof Doug Lichtman, free CLE and audio here.   On this blog I rarely try to handicap the outcome of ongoing copyright cases.  All too often the casual observer doesn't have all of the operative facts.   But after listening to the excellent debate on the IP Colloquium I disagreed with Doug Lichtman's apparent conclusion that statutory damages clearly wouldn't be held unconstitutional based on Prof. Charlie Nesson's arguments.  My post on the Tenenbaum case here.

Both Doug Lichtman and Charlie Nesson, counsel for Tenenbaum hopped on the blog and commented on my post.   Check out the debate here.   I think that it's the most interesting discussion held on this blog since I started it.

I think that Doug Lichtman ended up being right about the analysis that would be applied to the case, you can see his thinking in his comments to my March 28, 2009 post (I had expressed sympathy for Nesson's arguments that excessive statutory damages were penal in nature).

The RIAA originally wrote a cease and desist letter to Tenenbaum asking for $3500.  Tenenbaum mailed them $500.  They rejected it.  RIAA sued and demanded $12,500.  He refused and this litigation ensued.

A key fact that all should know and that escapes many media posts is that the court found that Joel Tenenbaum first lied about his responsibility for file sharing (he tried to blame family members), then he claimed he'd deleted files, which he hadn't.   This is a key fact when we look at statutory damages, because wilfullness/innocence is a factor that is taken into account.   Courts routinely whack people who lie and who cause property owners to incur hassles and increased damages due to their untruthfulness.

So the basic first lesson to be taken from this and any other case is that if you want to be a martyr for a great cause and to vindicate some great principle through our courts, don't compound any initial error by lying about your actions.  Tenenbaum is not a pop hero, he should count his lucky stars and work out a settlement.  If Harvard wants another test case, find a fourteen year-old.   Tenenbaum should consider quitting school, getting a job and paying off the debt.  The Boston Globe interview (video posted below) shows that Tenenbaum shows little inclination to accept any responsibility for his actions, and as attorneys fees mount, his downside keeps getting worse.

Turning to Judge Gartner's decision -  it is a landmark work of scholarship in the area of punitive damages and the rules that should apply to copyright.  If you care about this area, read it. It also explains the relationship between remittitur and a judge's ability or obligation to address the constitutionality of a statutory damages award.  Her decision is groundbreaking, thoughtful, and accords with the thinking of the federal judge in Minnesota who vacated the jury's award in the Jammie Thomas case.  My post on that case here.

The case is at a point that the RIAA and Tenenbaum can each claim victory.  Charlie Nesson's arguments made during the IP Colloquium were vindicated, although not in the way he envisioned, and he has created law that is sensible, humane and realistic in the field of statutory damages and punitive damages in copyright cases.  Doug Lichtman's analytical approach was adopted by the court, although not quite the way he envisioned.

Settle it.

Related post:  2d Cir Rejects "Independent Economic Value" Test.





Boston Judge Holds Music Filesharing Damages Unconstitutional in Tenenbaum Case



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Jurisdiction and Venue Become Issue In DC BitTorrent Litigation

Due process claims are being asserted in the mass litigations filed against John Doe BitTorrent users in the District of Columbia.

Rights groups enter illegal downloading fight

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Canadian Students Mobilize to Demand "Fair Copyright"

Thanks to Michael Geist's blog, new video on Canadian students mobilizing against copyright legislation pending in Ottawa.

SDNY Judge Whacks Limewire, Holds Founder Personally Liable

Opinion here courtesy WSJ Law blog, article here.

Judge Tosses $2 Million Jury Verdict for Downloading 24 Songs as "Simply Shocking"

From Capitol Records Inc. v. Thomas-Rasset, 680 F.Supp.2d 1045, 1054 (D.Minn. 2010)

The Court has considered the strong need for deterrence in this particular case, the difficulty in quantifying the damages caused by the chain effect of Thomas-Rasset's distribution of copyrighted sound recordings over the Internet, the large scale damages caused by online piracy in aggregate, and the substantial impediments to identifying and pursuing infringers. However, despite the combination of these justifications and the Court's deference to the jury's verdict, $2 million for stealing 24 songs for personal use is simply shocking. No matter how unremorseful Thomas-Rasset may be, assessing a $2 million award against an individual consumer for use of Kazaa is unjust. Even Plaintiffs admit that Thomas-Rasset is unlikely to ever be able to pay such an award. Having determined that the current verdict is so shocking that it must be remitted, the Court next faces the task of assessing the proper amount of remittitur

Pro-IP Act of 2008 - GAO Report on Counterfeits and Counterfeit Statistics

Loren Yager, Director of International Affairs and Trade of the Government Accountability Office (GAO) recently issued a report to Congress that was mandated by the Pro-IP Act of 2008 titled:  Intellectual Property:  Observations on Efforts to Quantify the Economic Effects of Counterfeit and Pirated Goods.  The 41-page report is found here.

The report makes no recommendations and is a follow up of another GAO report issued in March 2008 pursuant to a directive in the Pro-IP Act of 2008 titled Intellectual Property: Federal Enforcement Has Generally Increased, but Assessing Performance Could Strengthen Law Enforcement Efforts found here.

That report made a lot of sensible recommendations to law enforcement.

But the new GAO Report debunks all of the statistics thrown around by industry relating to the amount of IP infringement and its effects on the economy.   It basically concludes that both industry and government are simply making up numbers that have no basis in fact.  It contains a good simple discussion of the government agencies involved in the issue of infringement and their relative functions.  For example, it looks at the OECD "Rule of Thumb" that 5-7% of all commerce is in counterfeits and finds no factual basis for this.  The GAO looks at other statistics attributed to governmental agencies and finds all of them to have no basis in fact.

Fake pharmaceuticals pose a particular problem that I have not studied and that have truly life-threatening consequences.  You will recall the American antihero played by Orson Welles in The Third Man and his role in fake pharmaceuticals - a crime of tremendous horror in one of the greatest films ever made.

But on the copyright end, it is really too bad that the GAO didn't count Prof. William Patry and his excellent Moral Panics and the Copyright Wars among its experts and sources consulted.  In the field of copyright Prof. Patry has gathered more empirical specifics on the economic arguments involved in copyright issues and on the effects of infringement on the U.S. economy.

In Moral Panics Chapter on How the Copyright Wars Are Being Fought and Why, Patry's section titled "Chicken Little and False Figures" - Patry performs a debunking of trade industry statistics similar to that of the GAO. He also debunks the term "pirated" goods when used as a metaphor for copyright infringement and decries industry attempts to convince Congress that downloading a song is somehow connected to terrorism.

I would like to see studies broken down by industry and arguments broken down by product.

Criminal Copyright Infringement: Rabidly Neurotic Music "Pirate" Acquitted

I recently posted about the use of the term "music piracy" in a criminal copyright infringement proceeding here.

The Tech Dirt Blog reports that the defendant Adil Cassim was acquitted by the jury and joins in the debate about the term "music piracy".

Cassim was allegedly part of "Rabid Neurosis" - group that allegedly ripped sound recordings prerelease.  More from Billboard.biz here.

Why Did Congress Write the Copyright Act's Criminal Provisions Without Using the Words "Music Piracy"?

Daniel Defoe, Author of Robinson Crusoe - Attacked By Pirates Since 1703

Image thanks to Wikipedia

I don't practice criminal law.  It is truly astonishing to see the poetic license that judges let prosecutors use to impose criminal penalties on defendants for crimes that don't exist.   Here's a case of a kid being prosecuted for "music piracy" - a crime not found in the Copyright Act, and specifically not in 17 U.S.C. Section 506 "Criminal Infringement".  U.S. v. Cassim, 2010 WL 933943, 4 (S.D.Tex. March 12, 2010).  Here is the judge's denial of defendant's motion in limine to exclude use of the term "music piracy".

IV. MOTION IN LIMINE REGARDING THE TERM “MUSIC PIRACY”


Defendants seeks to exclude any use of the terms “music piracy” from the jury. They argue that this term is not evidentiary, has no probative value, and is highly inflammatory such that it will create undue prejudice. The Government, in response, argues that this term would be highly probative of the Defendants' knowledge of the unlawful object of the conspiracy. The Court finds that, because this term was and is commonly used to refer to the conduct in question, it will be difficult for witnesses and lawyers to generate an adequate substitute during questioning. It need not, therefore, be entirely excluded. However, the Court invites counsel for Defendants to suggest any possible limiting instructions which, if offered to the jury, might mitigate any possible prejudice that the term might create.

I have litigated many copyright infringement cases without the need to refer to the word "piracy" though as a civil plaintiff it is a nice synonym referring to a person who makes multiple exact duplicates, rather than someone who borrowed portions of a copyrighted work.  But it certainly is not necessary in a civil proceeding and would appear to me to be highly improper to use in a criminal proceeding.


From Wikipedia's definition of "Copyright Infringement"

Copyright infringement (or copyright violation) is the unauthorized or prohibited use of works covered by copyright law, in a way that violates one of the copyright owner's exclusive rights, such as the right to reproduce or perform the copyrighted work, or to make derivative works.


For electronic and audio-visual media, unauthorized reproduction and distribution is also commonly referred to as piracy (an early reference was made by Daniel Defoe in 1703 when he said of his novel True-born Englishman : "Its being Printed again and again, by Pyrates"). The practice of labeling the act of infringement as "piracy" actually predates copyright itself. Even prior to the 1709 enactment of the Statute of Anne, generally recognized as the first copyright law, the Stationers' Company of London in 1557 received a Royal Charter giving the company a monopoly on publication and tasking it with enforcing the charter. Those who violated the charter were labeled pirates as early as 1603.

The legal basis for this usage dates from the same era, and has been consistently applied until the present time. Critics of the use of the term "piracy" to describe such practices contend that it is pejorative and unfairly equates copyright infringement with more sinister activity, though courts often hold that under law the two terms are interchangeable.

Let's get the prosecutor a thesaurus, call the crime by the name Congress selected in drafting 17 U.S.C. Section 506 and let's leave the pirate stuff to Johnny Depp.