Perspective: Recording industry shows how to lose by winning

For the past four years the Recording Industry Association of America has led the charge against illegal file sharing on the Internet.

The collective focus of the organization has been to hold people who upload music to peer-to-peer networks responsible for stealing from its members' organizations. The primary method for enforcing their rights against illegal file sharers has been the threat of litigation.

Now, an important milestone has occurred to add muscle to its campaign against illegal file sharing. A jury found Jammie Thomas, the first defendant to go to trial in an RIAA case, liable for illegally making available 24 songs on the Kazaa network, and awarded the plaintiffs $220,000 in damages.

While victories in the court of law are necessary to preserve the RIAA members' interests in the music they promote and distribute, it is not clear that such victories translate to the court of public opinion. Though she does not make an ideal martyr, anticopyright organizations and activists have held Thomas up as a victim of the tyrannical RIAA, and the greedy music labels.

The RIAA may have lost in the most important court of all, the court of public opinion.

According to Cary Sherman, president of the RIAA, the outcome of the Thomas case will further deter people from illegally sharing music on the Internet. Yet, there are many people who do not know why file sharing is illegal, or even if it should be.

Many attorneys and copy-left activists are looking at the Thomas case as an opportunity for higher courts to consider whether seeding peer-to-peer networks with songs is copyright infringement. In the United States, owners of copyrights have the exclusive right to distribute their works. Entities from BitTorrent to Harvard Business School define peer-to-peer networks as distribution platforms. Therefore, it is not a huge reach that making music available on a peer-to-peer network violates the right of copyright owners to distribution.

The campaign against downloading really should be a campaign against uploading. Technically, the infringing act occurs when a person uploads content without permission from the copyright owner. Thomas' decision to make the songs available on Kazaa was not hers to make.

The jury agreed that Thomas did not have the right to upload the songs, and awarded the plaintiffs $220,000 in damages. The troops have rallied around Thomas claiming that the damages award was excessive.

However, the jurors were aware of the range in which they could issue damages. They chose a value that they thought would not only compensate the plaintiffs, but also perhaps to discourage the defendant from participating in illegal activities.

Regardless of the outcome of this particular case, statutory damages are an important tool for copyright owners as it may be impossible to establish actual damages for copyright infringement. That is, in a decentralized distribution model like peer-to-peer file sharing--Napster 1.0 and Grokster--determining how many people obtained copies of a particular work may be impossible.

Fundamentally, the outcome in the Thomas case will likely cause future defendants in file-sharing cases great pause before they decide to fight the RIAA in court. However, the RIAA may have lost in the most important court of all, the court of public opinion. It may have missed the opportunity to use the case as a means to educate the public about the importance of copyright. Instead, Thomas, and her supporters, will continue to argue that she has been the victim of the abusive tactics of a greedy industry.

Biography
Nancy Prager, an intellectual property and corporate attorney, represents technology and entertainment clients on matters from privacy to music licensing. She maintains a blog at NancyPrager.wordpress.com and can be reached at [e-mail].

More Perspectives

[jachamp]

Maybe we need a new nanny state

Legally, what Ms. Prager says is on the money.

Some of the problems happen when a person wants to see what all the fuss is about but they know little about their computer or how software works. So they download a copy of a P2P client and install it using the default settings.

The P2P software will, by design, besides loading a ton of malware on the user's pc, will also peruse the consumer's drive and find files that it will make available on its network.

The software assumes that the user wants to share and not be selfish, and thus acts accordingly by locating available media and making that media available as an upload.

This process may be totally unknown to the user who has walked away from their PC during the software install to watch television, go to the kitchen for a snack, or engage their pet.

But the end solution is going to be obvious; a nanny state. We will need to find a way to block software from making items available, and at the same time, educate users to what the software that they are installing are capable of.

Most PC users are clueless as evident by the number of chain emails, false theories, and other things that the average consumer falls for.

So perhaps we need to either change our laws, which is the best solution, to address the concept of fair use and copying or we need to change the law of software installation and dumb it down so that all users understand.

These things will never change the hardcore fileswapper who has copies of everything already and gets the latest releases before they are available. They already know what is being shared and they know how to manipulate the software. That is maybe 30% of filesharers.

But this will affect the recreational user and those right now are the primary targets of the RIAA who for some unknown reason, maybe ease, would prefer to target consumers rather than real pirates who sell tens of thousands of CD's and DVD's daily.

[disco-legend-zeke]

Then the users need to sue the Crimeware Distributers.

If an individual installs software that invisibly locates and shares all media files, then, if the user were found liable for damages due to this activity, there would be cause of action against the malware provider.

Perhaps the class could engage Ms. Prager. As jachamp points out, most file sharing users are guilty only of ingorance.

A business model based on theft should not be allowed.

[chash360]

Proper Copyrights

Legally speaking, is the fact that copyright information is not presented within the material that is copyrighted, a proper copyright? Electronic audio files typically do not contain such copyright info. Without having embedded this info in the original copyrighted work, can they claim it was properly copyrighted? If it was embedded, then it would be possible for the P2P networks to prevent or honor such copyrights (and therefore obligated to). If the work is altered to not contain the copyright then the person altering such content is guilty. It is the P2P software/network provider that is actually performing the distribution, and therefore it should be their responsibility to manage and honor copyrights. Without a proper embedded copyright though they can not do this, so to me the RIAA has created the problem, by not properly embedding a copyright disclaimer within the actual copyrighted work, encoded in the audio data, like all other formats of copyrighted works (printed materials have printed copyright disclaimer, video works have disclaimers displayed in the video, etc.) they have not provided the neccessary means to manage and account for their copyrighted work, nor provided proper copyright disclaimers. Every time the idea of DRM comes up, it is always argued, debated and shot down because, entities like the RIAA want to use it to prevent copying and distribution, and they try to include such rules in a standard, to which OEM's and end users do not want to adopt. Instead they need to just agree and establish a standard for the including the disclaimer without any rules on how anything should handle or process the disclaimer first. There by creating a mechanism for which such electronic distribution can be fairly managed. Until they do that, I would say that they have not made due effort to properly copyright, the artist's work, and are in breach of contract, and may be exposed to significant compensatory and punitive damages from their contracted artists....(I have not actually seen a recording artist contract, but I would assume there is some verbage of the recording labels obligation to establish, maintain and defend copyrights, on behalf of the artist.)

[Xenu7-214951314497503184010868]

Time to short-sell Recording Industry Stock

Those who can't adapt to a changing marketplace, call their lawyers.

[skeptik]

did she really?

I'm not going to debate the right or wrong of P2P, but I am going to protest the ongoing debate as pitched and deliberated by many who do not even understand the technology they're deciding upon. It's been rumored that some of the jurors do not even own a computer, which to me makes their verdict a bit flimsy.

Technically speaking, Thomas did not upload anything. She "made available", i.e. she selected a particular folder for sharing. (Whether this was intentional, or inadvertent by mistake or ignorance is another debate I'm not engaging in for this point, but should be an aspect of assigning guilt.)

The P2P program allowed others to access files on her PC and transfer them, which involved an upload on the part of her PC, but not her. She may have been completely unaware the upload was even taking place.

Yes, it's a small distinction, but when you're debating nuances in this issue, it ought to be stated properly. It's important to both the case and the public understanding/opinion.

[ittesi259]

Yeah, I think she did

When you've got over 1000 downloaded songs, and only 24 of them are available for sharing....tells me she had some idea what she was doing. I'm no fan of the RIAA, but this person even took the step of physically replacing her hard drive to try to cover it up once she started getting in the legal mess. I think she knew full well what she was doing. I've used Kazaa before...it tells you up front what your shared folder is and how to disable sharing.

[wylbur]

doesn't matter if juror never used internet

This is a ridiculous argument-- a juror who never used the
internet makes the verdict flimsy. If somebody is found guilty of
rape by a jury which contains a virginal pacifist, is the verdict
invalid because a juror knew nothing of violence and sex? Are
jurors in murder cases in need of direct knowledge of killing?
Must jurors in theft cases have some direct knowledge of how to
rob? If a juror in a murder case never owned a gun, maybe he
should assume the gun was accidentally fired. Oh that's right,
she took a trip to Vegas, her friend took the bag when she got
back and we have not seen it since. Anyway, the glove didn't fit.

[likes2comment]

Just don't buy cd's

I stopped buying cd's years ago when the RIAA shutdown Napster. There's a Chinese dollar store near us, so I occasionally buy a cd there. Yep, the title is in English, but other writing is Chinese and manufactured in Canada. All for a $1.

[dahnb]

A Tightwad Thief Is Still A Thief!

What does shutting down Napster (free downloads)have to do with buying cds. Buying Chinese ripoffs is no better than any other type of theft. How does ripping off record companies not ripoff the musicians?

[SneezingPanda]

Lost in translations.

To the author:
There should be simple rules about sharing music, regardless whether it is uploading or downloading.
If someone wants to apply IP law in the way it was done to Jammie Thomas, it is not gonna work as a fair legal tool. People are accustomed to buying physical goods. If RIAA is insisting that it is selling rights for the music, it has to manage people's expectations about what they can do with the records they bought. Well, in case you didn't noticed, they had to do it long time ago, before artists started to figure out that they don't really need someone like RIAA between them and their auditorium.

[Tuxcat]

Huh?

It's touching how concerned people are about how the labels are viewed in the "court of public opinion." Why do so many writers seem to believe the RIAA is unaware of the public-opinion factor? Its member labels have obviously decided it's worth the tradeoff, and it's getting really tiring hearing commentators act like the labels have no idea that some people find their approach objectionable.

Anyway, this story doesn't make sense. The writer first says they're suing "uploaders" -- or, rather, those who offer stolen music for download -- then says the RIAA should take its focus off downloading and go after "uploaders."

RIAA member labels (the RIAA doesn't sue anyone itself) have never sued anyone for downloading alone. Everyone who's been sued has been accused of "sharing" at least several hundred songs.

And if anyone doesn't know "sharing" copyrighted material is illegal by now, they're too stupid to be allowed to go online. As for not thinking it should be illegal that's neither here nor there: The fact is, it's illegal now.

And Jammie Thomas would make a better martyr if she weren't, you know, guilty.

[DesignKCK]

Huh

First, everyone that has been sued has been sued for uploading or distibuting files. They have not been sued for downloading. You should really read up on the facts before spouting off about things you are not informed on.

[rdupuy11]

Wow, sounds like a lawyer doesn't understand a jury

She said: However, the jurors were aware of the range in which they could issue damages.

Yes...if the range had been $15 to $1000, 2 would demand the full one thousand, one would have insisted on $15...and they would have reached a compromise of $300, because they needed to 'send a message'.

The fact is they were playing with outrageous sums and so they were settling on what they thought was a middle ground...not realizing these sums were meant for racketeers...not a individuals who messed up.

You don't get a $100,000 fine for speeding, the amount was absurd, and the jury...like most juries does mostly what they are instructed, they simply cannot think at the reasoned level, that you would hope a professional lawmaker could think at (unfortunately they don't always think either).

[247mark]

Statutory amount

While I am no defender of the RIAA, you ought to know what the law says before claiming absurdity on the part of the jury. The cost of a CD at retail and the punishment for violation of a copyright are not even close. The statutory amount for a copyright violation is $150,000 under Title 17, Ch.5, Section 504(c)(2). This has nothing to do with speeding. Don't hate the messenger, contact your Congressional rep.

[jrodadlv2007]

Record industry defending dying paradigm

I find it funny that the record industry is defending artists when the artists rarely make much of their income from album sales. I have read or heard numerous interviews by music artists expressing much dissatisfaction with the model that is the record industry, which is why many of them are working on a feasible way to put out their own material, make money and distribute it to feed public demand.
I can imagine that people download because they're just displeased with the crap that most albums consist of. A&R is largely nonexistent. Artists careers aren't nurtured. Instead, artists are dropped if they don't post big numbers within the first few albums. Such a way of thinking results in stuff that while commercially successful isn't exactly the best. Why do you think that people aren't willing to invest $15 dollars for a CD? The record industry needs to look at music purchases as investment by consumers. What are they getting for their money?
I view downloading as an extension of the listening booths that used to exist. People could check out records before buying them. You don't always have that option. Also, what recourse do you have if you don't like the CD? 9 times out of 10 you get an in-store credit. There are no guarantees that music is good.
I feel that the record industry needs to come to table and discourse with consumers. While I'm sure that there are citizens that are on the record industry's side, I suspect that there are more that view the record industry as villains. They might have intended to punish Jammie Thomas but they've unknowingly made her into a martyr, whether through her own choice or by creation. Litigation isn't the answer but discourse.

[wylbur]

Public opinion, not what you think it is

While there is a very vocal online movement against copyright
(oddly promulgated by media outlets such as Cnet that thrive on
copyright), the reality is that public opinion is broadly on the side
of RIAA-- more than just those 12 jurors. It is clear that this young
woman knew exactly what she was doing when she put the files out
there. Perhaps I will creat Dnet which will be a website that copies
Cnet's content lock, stock, and barel, but with advertising that
profits me instead. Then I will go out and promote the site and
defend myself by saying it is fair use.

[chuck_whealton]

Re: Public opinion, not what you think it is

OK, you say that public opinion is not what the author thinks it is.

Maybe you're right, maybe you're not.

I agree it was WRONG for this lady to make copyrighted material available for anybody to download, but I disagree with the award the jury gave to the RIAA.

So let me ask you this - could you please give us references for your statement that "public opinion is broadly on the side of the RIAA'?

Overall, I disagree with the RIAA's tactics. I haven't purchased any new music in years, instead, relying on the music collection I built up in my younger years. And no, I don't illegally download it either.

If artists are mad that I refuse to purchase their new music - either online or in CD format - they can thank the RIAA. It's because of their tactics that I have COMPLETELY stopped purchasing music.

Charles R. Whealton
Charles Whealton @ pleasedontspam.com

[ggrs34]

Grand Theft Audio

Why is it ok to steal from musicians? copy left people always say that they're stealing from nasty big business. Because the truth is embarrasing...they are also stealing from the very artists they profess to admire. Rot in Hell *********.

[dahnb]

That about sums it up

These thieves are no better that the big bad RIAA (wuo definately are greed heads and could care less about the musicians). Two sides of the same coin.

[cocos2000]

what is "artist" really doing?

To make such amount of money? What do they do for people to get gratifications much higher than teachers or doctors? Most of them are no-brain repeating puppets. What is Britney Spears doing so special? They (mostly) dont even write songs or dont make music, just people behind them serve ready well selling produckts through their pappets. Solution is simply - this goes a little bit too far, CD prices divide by 10, "artists" payout divide by 10, sales will surely go up. I am sorry to see this going such terrible way.

[The_Decider]

Who is the thief?

People who download songs that they never would have paid for anyway, or a group of companies(the RIAA) that sells a CD for $15, and the artist is lucky to get 50 cents from that $15 sale. Once they pay back the companies for the marketing and recording costs, that is.


Who is the thief again?

[markdoiron]

Dance to Your Own Music

The whole RIAA music-sphere is dissatisfying and, in at least a few ways, corrupt. DJs trample all over good songs, or cut good songs short to fit in another ad. The music sold on CDs is sold at rip-off prices (recall the FTC price-fixing decision a few years back). And the people truly responsible for making the music get no or very little from the sales of the music.

But does that mean that the answer is to download pirated copies of music? No, of course not. What's needed is a whole new sphere of music. And that can only be realized once people stop listening to the RIAA music and start dancing to their own beat.

With the advent of the Internet there's plenty of opportunity to do just that. Unfortunately, the RIAA successfully shut down the best avenue for non-RIAA music when mp3.com took a misstep in the copyright world (making music you own available to you without having to seek out the CD from the shelf--purely as a convenience to you, but only after mp3.com actually copied the music to their own servers).

But there are now plenty of non-RIAA music artists out there. Seek them out. Tell your friends about them. Put their music on your mp3 players (because they have real mp3 files!) and listen to them while you're on the go. And send a big, giant, monstrous message to the RIAA that we don't need them, their music, and their artists.

BOYCOTT THE RIAA (which means no piracy, too!)

--mark d.

[chash360]

Tell the artists

I like a lot of RIAA artist music. I think the solution is that the artists need to realize that they are the valuable commodity not the recording label. RIAA artists of the world unite and sue the RIAA for not providing proper copyright disclaimers within the recorded works, to allow for proper protection and management of copyrighted material to be distributed electronically, thereby preventing a distribution channel that would actually benefit the artists. Artists looking to be signed need to read their contracts, retain copyrights and/or specifically allow electronic distribution for their own benefit. If I really like a song, or artist even if I obtain a an electronic version for free, I will typically buy the CD if I really like it.

[rlpete2]

The problem is the the Recording INDUSTRY

As a musician, I want to see other musicians paid for their work. As a music lover, I want access to lots of music, more than I can afford to buy, only to find it isn't what I care to listen to.

Like the farmer who gets a few pennies for the wheat in a loaf of bread, the musicians get a very small share of the price of a CD. Most of it goes for the multimillion dollar studio full of hi-tech sound gear, the packaging and distribution, and the marketing campaign. What Joni Mitchell called "the starmaking machinery behind the popular song." "Free Man in Paris." There is too much "industry" in the music industry and not enough music.

The same pathological giantism afflicts live performance as well. Staging and promotion (including ridiculous Ticketmaster fees) constitute most of the concert ticket price.

The Grateful Dead outflanked the industry from the start. Their albums were just tools for promoting the live performance, and they encouraged, rather than prohibiting, the fans' recording of the shows. They made a lot of money without suppressing their creativity.

Where is this heading? Across the Atlantic, the UK equivalent of RIAA, the Performing Rights Society, is suing a chain of auto repair shops for copyright infringement because the employees listen to the radio at work. Really!

http://news.bbc.co.uk/1/hi/scotland/edinburgh_and_east/7029892.stm

So, if you want background music in your business, you would have to pay for a licenced service? The ASCAP/BMI fees were the direct cause of the explosion of talk radio. As a performing musician, I'm hoping this leads to a lot of opportunity for gigs.

[cliffhersh]

Don't Buy from Sony

Don't support Sony. They are the biggest plaintiff in the suit. Don't buy a Playstation. Write and tell them why.

[d8wave]

Ridiculous

This article is a massive pile of fluff!!
The $200k fine should be shared amongst all who have uploaded files, the liability should not rest on the shoulders of one person who was just one of many who has uploaded and downloaded the same content. The costs to defend the recording industries losses due to their own failures in developing, supporting and promoting talent at a rational price will never be recouped through litigation. The RIAA and its members are organizations with too much fat to support the existing market. They deny the supply/demand curve and expect double digit profits in a commodity industry. They are achieving this fee through abuse of their artists and now of their customers.

[chash360]

Upload or Dowload?

I have heard so many misuse these terms, upload means to transmit, download means to recieve. Now here come the confusing part... If she made available for transfer, these copyrighted files, but did not actually intentionally upload the files directly, I think she should have been aquitted, end of story. If the files were uploaded from her system at the request of a remote user wishing to download the material, it would seem the remote user is at fault, but the remote user may not always be aware that the material may be copyrighted. The solution to this may be in the manner that copyrights are communicated. In most other forms of copyrighted material, the copyright information in presented in the format and within the media of the material itself, printed works have a copyright printed on some of the pages, video works have copyright notices displayed in the video. Purely audio works do not contain an encoded audio version of the copyright info, thus there is no mechanism for proper handling of such material. If there was, it would be simple for there to be a machanism for such networks to either refuse to transfer such copyrighted materials, or to track and manage such materials so that proper compensation goes to the copyright owner. If the RIAA would have put as much effort into helping establish a fair and beneficial DRM solution, as they put into sueing people, they might realize that they could have a HUGE private distribution channel using peer-to-peer networks instead of seeing them as the enemy. But of course greed for money and power outweighs such thinking...

What needs to happen is a standard way of embedding copyright info, such that it can be electronically detected and managed, for proper copyright owner and artist compensation, but not as a means to prevent or control distribution. Artists want their music out there, and the recording labels should not be allowed to deny this method of distribution, with a larger percent of compensation going to the artist for electronic distribution, because in that method they are providing a greater percentage of the obtained product, the actual content that is desired, without all of the packaging, media, promotion and distribution costs of retail sales.

To alter a copyrighted work to not contain the copyright information is already covered in law. With a proper DRM solution in place, the RIAA or individual Labels should be required to offer such P2P networks a reasonable mechanism for proper tracking and compensation of materials before they are allowed to file suit for illegal distribution, because after all these P2P networks are performing a function basically for free, that they pay lots of money to physical media distributors for. For the RIAA or individual labels to deny this distribution channel would seem in conflict of interest, or even breach of contract with the artist.

Again this is a strong argument to for copyrights and patent rights to always be assigned to the original individual creators and contributors, and not business or corperate entities to hoard over.

[wallinger1]

Copy rights

I see this judgement as a crime against that mother and her children. I believe that when a artist sells to a record label they agree to terms some artist want rights to the songs this is a form of ownership now when a consumer buys the music it becomes ownership of the purchase agent the consumer to do what ever they want or at least thats the terms I believe should be afforded to a consumer rights to ownership should be a basic right simple enough. I hate the fact that I cannot find old songs because they have been locked up in a vault somewhere just think if the pledge song of the u.s. was locked away by the RIAA .

[WAArnold]

RIAA

I've said it before and will say it again. I do not download nor upload any of their music. I don't even buy the garbage anymore.

With that said, If I were to buy from them, the problem they pose I cannot accept. If I purchase a song from them, I pay them my hard earned money for it so that I may own it. It's mine, not theirs after they sell it.

If I buy an apple and decide to devide, or give, it to someone, the apple grower wont try telling me I can't do that.

If I purchase a cluster of grapes, the grower can't tell me I can't share it with others.

If I purchase an automobile and dismantle it and give the parts to someone else, the manufacturer can't tell me I can't do that.

I can go on but I think you get the idea. If the RIAA folks wanna keep selling music, write another song.

RIAA, what makes you think you are any different that other manufacturers? Pull you heads out and start writing music that is clean, wholesome, makes sense and you'll sell more.

The crap you call music now days is nothing but noise, makes me shutter to even hear the few words most of you utter and call it a song. I don't think most of you can write more than 6-8 words, and bay all means, you can't play music.

[Jim Harmon]

Here's the important difference

If you buy an apple and then give it to someone, YOU NO LONGER HAVE IT! Yes, you can buy as many albums as you want and give them away - as long as you don't make any copies of them. Only the entity that owns the copyright has the right to make copies (which is why it's called "copyright" and not "copywrite").

[The_Decider]

Copyright

There is a need for copyright, although companies have perverted the intent of copyright.

Too bad the RIAA is only interested in making money for itself, not helping the artists.

That is why no one cares about this dying organization.