Judge Cuts $675,000 Fine in Downloading Case

RIAA

A federal judge has slashed damages in a closely watched music downloading case by nine-tenths of the original amount.

Last July, a jury awarded $675,000 to four record labels for the 30 songs downloaded and shared by Joel Tenenbaum, a graduate student at Boston University.

On Friday, however, Federal District Judge Nancy Gertner ruled that the penalty was “unconstitutionally excessive” — so high, in fact, that the amount “bears no meaningful relationship” to the government’s “legitimate interests in compensating copyright owners and deterring infringement.” She lowered the amount to $67,500.

Mr. Tenenbaum and his attorney, Harvard Law School professor Charles Nesson, had challenged the damages award on constitutional grounds.

Judge Gertner, in reducing the damages, noted that “for many years, businesses complained that punitive damages imposed by juries were out of control, were unpredictable, and imposed crippling financial costs on companies.”

Some of those businesses have gotten relief from the courts, she noted, and added that this sends an important message: “the Constitution protects not only criminal defendants from the imposition of ‘cruel and unusual punishments,’ U.S. Const. amend. VIII, but also civil defendants facing arbitrarily high punitive awards.”

The Recording Industry Association of America issued a statement about the ruling, stating “we disagree with court’s reasoning and analysis, and we will contest this ruling.”
The group stated that “the court has substituted its judgment for that of 10 jurors as well as Congress.”

But Professor Nesson applauded Judge Gertner’s ruling, saying in an interview, “I consider it the first step in the right direction of recognizing the abusiveness of the copyright industry’s campaign against individual consumers — but it’s just a first step,” he said.

Mr. Tenenbaum’s Web site about the case states that “A $67,500 price tag for 30 songs is still a bill Joel cannot afford,” adding, “Songs on iTunes are about $.99-$1.29 a piece. ”

Professor Nesson noted that even though the judge “dropped it by an order of magnitude, she’d have to drop it by another order of magnitude to get into his range.”

By JOHN SCHWARTZ NY Times

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Google Prepares Music Search Service

Google plans to launch a music service, Wired.com has confirmed with sources familiar with the situation. Next to nothing is known about the service at this point, rumored to be called “Google Music,” “Google Audio,” or “One Box,” although we have confirmed that it will be announced next Wednesday, and that it will link out to two music services: Lala and iLike.

Google will not become a music retailer itself, but will offer enhanced music search with a streaming function — first of possibly several vertical search offerings. Searching for an artist or song will apparently bring up a box (thus Google’s working title: “One Box”) with a streaming link randomly assigned to stream songs from either Lala or iLike, the latter of which was acquired by MySpace in August.

Lala, iLike, “and others” will announce the service next Wednesday at Capital Records Music in Hollywood, California, with musical guests OneRepublic plus members of Linkin Park and Dead by Sunrise.

ConcertTickets_html_v5 MSThe RSVP on the invitation (right) links to an e-mail address at secure online event registration company Paragon New Media, which lists Google as a client. After spotting that, we confirmed with a source close to the situation that Google’s upcoming music service will be announced at the event.

Google’s music search service, whatever it ends up being called, will include music from all four major labels and, most likely, all of the indie content on iLike and Lala (as one insider put it, it would be harder to remove a subset of songs from those services than to let Google simply index all of it).

iLike currently streams some songs as 30-second samples and others as full-length songs, and sells MP3s for the usual prices. Lala allows registered users to stream complete songs and albums once, for free, after which point they can buy streaming songs 10 cents that can be credited to the purchase of the full download. At this point, it’s not clear how these services will behave when presented through Google’s search interface.

Google has yet to respond to our requests for comment. The company is also building the back-end for the majors’ upcoming Vevo music video service, and operates a free download service in China that TechCrunch says will not resemble whatever Google launches here in the U.S. and possibly elsewhere as well.

After this music search product launches next Wednesday, we understand that Google plans to release other search verticals, possibly including a travel booking service.

By Eliot Van Buskirk wired.com

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RIAA Wins $675k in Damages From File Swapper

A Boston student has been ordered to pay US$675,000 to the recording industry for illegal file-sharing, according to reports Friday.

Joel Tenenbaum had admitted to downloading and sharing digital music. Judge Nancy Gertner of the U.S. District Court for Massachusetts found him guilty of infringement and left the jury to decide damages.

They were instructed to charge him between $750 and $30,000 for each song he downloaded and distributed. On Friday, the jury decided he should pay $22,500 per song, according to Ars Technica.

The verdict had not been posted online late Friday and Tenenbaum's lawyer did not immediately return a call for comment.

The ruling comes a month-and-a-half after another file sharer, Jammie Thomas-Rasset, was also ordered to pay up for infringement. She was initially asked to pay $220,000 but won a retrial, after which a Minnesota jury ordered her to pay $1.92 million, or $80,000 per song. She plans to appeal the decision.

The Recording Industry Association of America has filed around 20,000 lawsuits against people in a bid to stop online music trading and copyright infringement. Thomas-Rasset was one of the first people to receive a guilty verdict in a case backed by the RIAA. Others have settled their suits.

Late last year the RIAA said it would stop filing new lawsuits against individuals for file-trading, but it continues to litigate cases it had already filed.

In a statement Friday the RIAA said it was grateful for the jury's recognition of the impact illegal downloading has on the music industry.

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Jammie Thomas will appeal, lawyer says

It's official: Jammie Thomas-Rasset intends to appeal her case, one of her lawyers told CNET News on Wednesday.

"She's not interested in settling," attorney Joe Sibley said in a brief phone interview. "She wants to take the issue up on appeal on the constitutionality of the damages. That's one of the main arguments--that the damages are disproportionate to any actual harm."

Thomas-Rasset has a brief period to file a notice of appeal, legal experts said. The actual appeal can come later.

What this means is that the Thomas-Rasset drama will have a third act. In October 2007, a jury rendered a $222,000 verdict against her but that decision was later tossed out.

Then, two weeks ago, a federal jury in Minnesota found Thomas-Rasset liable for willful copyright infringement and ordered her to pay $1.9 million. Since then, the blogosphere has churned with speculation about how she will proceed. The 32-year-old Minnesota resident said after her latest trial that she would refuse to pay. Still, with $1.9 million in damages strapped around her neck, many have wondered whether Thomas-Rasset would fight on--or cut her losses and settle.

The Recording Industry Association of America said on Monday that it had made a phone call to Sibley and law partner Kiwi Camara last week to ask whether Thomas-Rasset wanted to discuss a settlement. An RIAA representative said that its lawyers were told by Sibley that Thomas-Rasset wasn't interested in discussing any deal that required her to admit guilt or pay any money.

In settlement talks, there's often maneuvering, so the RIAA was unsure which way Thomas-Rasset would go--at least until Sibley made it clear.

"The defendant can, of course, exercise her legal rights," said Jonathan Lamy, an RIAA spokesman. "But what's increasingly clear, now more than ever, is that she is the one responsible for needlessly prolonging this case and refusing to accept any responsibility for the illegal activity that two juries decisively found her liable for. From day one, we've been fair and reasonable in exercising our rights and attempting to resolve this case."

Sibley told CNET News that when RIAA lawyers called a couple of days after the second trial to gauge Thomas-Rasset's interest in settling, they didn't throw out any dollar figures. He did say that following Thomas-Rasset's first trial, the trade group offered to settle for $25,000.

Thomas-Rasset's case has already helped set a series of important legal precedents, including establishing that it is sufficient to show that defendants placed files in their P2P shared folder to prove they intended to make the music available across the network. With the case going to the appeals process, there's a good chance it will continue establishing legal parameters.

"They have an uphill battle," said Ben Sheffner, a former attorney at 20th Century Fox and a rising star on the pro-copyright side. Sibley and Camara "are asking the court to do something no federal court has ever done before. However, this is a good test case. You have a non-wealthy defendant and you have a huge damages award."

by Greg Sandoval CNET News

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Jury in RIAA Trial Slaps $2 Million Fine on Jammie Thomas

A federal jury on Thursday found Jammie Thomas-Rasset liable in the nation’s only Recording Industry Association of America file-sharing case to go to trial, dinging her $1.92 million for infringing 24 songs.

Thomas-Rasset (then just Jammie Thomas) went to trial two years ago, and was ordered to pay $222,000 by a different jury for the same songs. The judge in the first case declared a mistrial. Thomas-Rasset opted for a new trial instead of settling like the 30,000-plus others the RIAA has sued or threatened to sue for copyright infringement.

Thomas-Rasset, fined $80,000 a track, told our sister publication, Ars Technica, she wouldn’t pay.

Clearly, the Minneapolis jury didn’t buy her latest version of events. This time, she testified that her children might have used her computer to file share on Kazaa. The previous trial, she testified a file-sharing hack or crack hijacked her WiFi connection, even though she didn’t have a WiFi router.

Under the Copyright Act, juries can award damages of up to $150,000 per pilfered track. About $3,500 was the average payment in the thousands of RIAA cases that settled out of court.

In December, the record labels announced they were winding down their 5-year-old litigation campaign and instead began lobbying ISPs to disconnect music file sharers. But the RIAA, the labels’ litigation arm, said it was continuing with the hundreds of cases already in the legal pipeline.

Source: wired.com

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Euge Groove Responds To Notable Quote

We don't got to show you no stinking iceman's tongs
By Carol Archer radioandrecords.com

Narada artist saxophonist Euge Groove responds to the following Notable Quote from ArtistShare president Brian Camelio: "Just like ice men lost their jobs with the advent of the first electric refrigerator, businesses that depend on selling recorded music, sadly, no longer have a product to sell, because music is easily obtained for free via illegal downloading.

Groove writes: "It implies that the record companies are being rendered obsolete like the 'ice man's' job due to a new invention and labels, artists, writers and publishers just need to move on. While the new invention, Internet distribution, has changed the way labels distribute, the ice men didn't have their ice stolen. That's a huge difference. Brian's quote implies that it's the record companies' fault for not moving on.

"I don't think it all falls there. When the labels, publishers, music rights groups, etc., all tried to shut down the stealing with both DRM and shutting sites down in the courts, the courts shut down the labels. Demanding everything from refunds and restitution to consumers whose discs had protective software, to letting companies like Napster continue to exist while the cases were being tried. At the real heart of it was a President who chose not to do his job by protecting copy- written intellectual property. It is indeed the President's job to enforce our laws. Congress makes them and Judicial declares them constitutional. In a time of industry bailouts, which perpetuates the notion that 'Americans don't make anything anymore,' this situation is even more sad. Music and art, in general, is one thing that we make quite well. Hopefully, the new administration will realize this and do [its] job of enforcing the laws already on the books. Then the music industry can get back to making what it makes best -- great music."

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Music Industry to Abandon Mass Suits

After years of suing thousands of people for allegedly stealing music via the Internet, the recording industry is set to drop its legal assault as it searches for more effective ways to combat online music piracy.

The decision represents an abrupt shift of strategy for the industry, which has opened legal proceedings against about 35,000 people since 2003. Critics say the legal offensive ultimately did little to stem the tide of illegally downloaded music. And it created a public-relations disaster for the industry, whose lawsuits targeted, among others, several single mothers, a dead person and a 13-year-old girl.

Instead, the Recording Industry Association of America said it plans to try an approach that relies on the cooperation of Internet-service providers. The trade group said it has hashed out preliminary agreements with major ISPs under which it will send an email to the provider when it finds a provider's customers making music available online for others to take.

Depending on the agreement, the ISP will either forward the note to customers, or alert customers that they appear to be uploading music illegally, and ask them to stop. If the customers continue the file-sharing, they will get one or two more emails, perhaps accompanied by slower service from the provider. Finally, the ISP may cut off their access altogether.

The RIAA said it has agreements in principle with some ISPs, but declined to say which ones. But ISPs, which are increasingly cutting content deals of their own with entertainment companies, may have more incentive to work with the music labels now than in previous years..... > Article continues at The Wall Street Journal

By SARAH MCBRIDE and ETHAN SMITH

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Download Uproar: Record Industry Goes After Personal Use

Despite more than 20,000 lawsuits filed against music fans in the years since they started finding free tunes online rather than buying CDs from record companies, the recording industry has utterly failed to halt the decline of the record album or the rise of digital music sharing.

Still, hardly a month goes by without a news release from the industry's lobby, the Recording Industry Association of America, touting a new wave of letters to college students and others demanding a settlement payment and threatening a legal battle.

Now, in an unusual case in which an Arizona recipient of an RIAA letter has fought back in court rather than write a check to avoid hefty legal fees, the industry is taking its argument against music sharing one step further:

In legal documents in its federal case against Jeffrey Howell, a Scottsdale, Ariz., man who kept a collection of about 2,000 music recordings on his personal computer, the industry maintains that it is illegal for someone who has legally purchased a CD to transfer that music into his computer.

The industry's lawyer in the case, Ira Schwartz, argues in a brief filed earlier this month that the MP3 files Howell made on his computer from legally bought CDs are "unauthorized copies" of copyrighted recordings.

"I couldn't believe it when I read that," says Ray Beckerman, a New York lawyer who represents six clients who have been sued by the RIAA. "The basic principle in the law is that you have to distribute actual physical copies to be guilty of violating copyright. But recently, the industry has been going around saying that even a personal copy on your computer is a violation."

RIAA's hard-line position seems clear. Its Web site says: "If you make unauthorized copies of copyrighted music recordings, you're stealing. You're breaking the law and you could be held legally liable for thousands of dollars in damages."

They're not kidding. In October, after a trial in Minnesota -- the first time the industry has made its case before a federal jury -- Jammie Thomas was ordered to pay $220,000 to the big record companies. That's $9,250 for each of 24 songs she was accused of sharing online.

Whether customers may copy their CDs onto their computers -- an act at the very heart of the digital revolution -- has a murky legal foundation, the RIAA argues. The industry's own Web site says that making a personal copy of a CD that you bought legitimately may not be a legal right, but it "won't usually raise concerns," as long as you don't give away the music or lend it to anyone.

Of course, that's exactly what millions of people do every day. In a Los Angeles Times poll, 69 percent of teenagers surveyed said they thought it was legal to copy a CD they own and give it to a friend. The RIAA cites a study that found that more than half of current college students download music and movies illegally.

The Howell case was not the first time the industry has argued that making a personal copy from a legally purchased CD is illegal. At the Thomas trial in Minnesota, Sony BMG's chief of litigation, Jennifer Pariser, testified that "when an individual makes a copy of a song for himself, I suppose we can say he stole a song." Copying a song you bought is "a nice way of saying 'steals just one copy,' " she said.

But lawyers for consumers point to a series of court rulings over the last few decades that found no violation of copyright law in the use of VCRs and other devices to time-shift TV programs; that is, to make personal copies for the purpose of making portable a legally obtained recording.

As technologies evolve, old media companies tend not to be the source of the innovation that allows them to survive. Even so, new technologies don't usually kill off old media: That's the good news for the recording industry, as for the TV, movie, newspaper and magazine businesses. But for those old media to survive, they must adapt, finding new business models and new, compelling content to offer.

The RIAA's legal crusade against its customers is a classic example of an old media company clinging to a business model that has collapsed. Four years of a failed strategy has only "created a whole market of people who specifically look to buy independent goods so as not to deal with the big record companies," Beckerman says. "Every problem they're trying to solve is worse now than when they started."

The industry "will continue to bring lawsuits" against those who "ignore years of warnings," RIAA spokesman Jonathan Lamy said in a statement. "It's not our first choice, but it's a necessary part of the equation. There are consequences for breaking the law." And, perhaps, for firing up your computer.

By Marc Fisher
Washington Post Staff Writer
Sunday, December 30, 2007; M05

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RIAA shifts legal battle to a new front, sues Usenet access provider

In the wake of its victory in the first file-sharing case to go to trial, the RIAA has moved on to its next target: the nefarious home of millions of illicit files, Usenet. Yesterday, a consortium of record labels filed a copyright infringement lawsuit against Usenet access provider Usenet.com.

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In its complaint, the RIAA accuses Usenet.com of offering subscribers "essentially the same functionality" as do commonly-used P2P networks. The record labels cite Usenet.com's high-speed servers, the access it provides to the alt.binaries hierarchy, and the service's advertising that it provides the "'hottest way of sharing MP3 files over the Internet' without getting caught."

The RIAA is seeking a permanent injunction barring Usenet.com from inducing copyright infringement by its users along with damages, attorneys' fees, and any other relief the Court deems "proper and just."

Read the entire article By Eric Bangeman at Ars Technica

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Apple Is Cutting Price of Some Online Songs

Apple is lowering the prices of songs it sells online without copy protection to 99 cents from $1.29, a company spokeswoman said Tuesday.

The reduction, which started appearing on songs Tuesday, puts the company’s iTunes store closer in line with its rivals. Amazon, which opened its online music store in September, sells tracks without anticopying software locks for 89 cents to 99 cents.

Separately, Apple announced that its next-generation operating system, the Mac OS X Leopard, would be available Oct. 26 for $129, and Apple’s online store was taking orders.

An Apple spokeswoman, Natalie Kerris, said the price cut at iTunes was not in response to competition. “It’s been very popular with our customers, and we’re now making it available at an even more affordable price,” Ms. Kerris said.

Apple began selling some songs in May without copy protection. The primary benefit of such music is that it can be played on any music player, not just Apple iPods. Apple also charges 99 cents for copy-protected tracks.

Leopard, the new operating system, was originally due in June, but Apple said in April that it needed to divert resources so it could introduce the iPhone on time.

AP-

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Record Labels Planning Subscription Music Service?

All of Universal's jockeying with iTunes may make sense now: the label may be planning a subscription music service of its own with other big record companies. But will the labels' own service be used simply to retain a stranglehold on the market rather than giving consumers more choice?

Universal has its own catalog, and is apparently taking to Warner Music Group about putting that label's music on the service. It has reportedly already signed up Sony BMG. Business Week reported Friday that the move is aimed at taking more control over the distribution of digital music, which Apple has a near stranglehold on.

Together, the three labels would control about 3 out of every 4 music tracks sold in the US. Universal Music's chief Doug Morris also has hope that the service, dubbed "Total Music," would lift up competitors to the iPod, such as Microsoft's Zune.

If the rumors are correct, users would shell out money only for the Total Music player itself. The roughly $5 per month fee to download music would be absorbed by hardware makers and cellular carriers. However, it is not clear how that would affect the price of the player itself.

Such a setup would be drastically different from what is currently available, which has some industry watchers questioning the speculation. iTunes users not only shell out anywhere from $79 to $249 -- or even more -- for the player, but 99 cents for each track that they download over that.

Insiders figure that the cost per player would run around $90 for the subscription service, figuring that most digital music player owners keep their devices for about 18 months. It is quite possible that the Total Music players could be quite a bit more expensive initially to recoup some of that cost. Such a strategy might hinder sales, especially since customers would essentially lose their music collections if they lose their player, or if it breaks.

By Ed Oswald, BetaNews


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File-Sharing Students Fight Copyright Constraints

When Zachary McCune, a student at Brown, received an e-mail message from the university telling him he might have broken the law by downloading copyrighted songs, his eyes glazed over the warning and he quickly forgot about it. “I already knew what they’d say about file-sharing,” he said. “It’s become a campus cliché.”

But the next day, he realized the message had an attachment from the Recording Industry Association of America, a trade group that is coordinating legal efforts by record companies to crack down on Internet piracy. The attachment told Mr. McCune he faced a lawsuit with potential fines of $750 to $150,000 for every illegally downloaded song.

Read the entire article by By RACHEL AVIV at The New York Times


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