Nearly two years ago, the Bush administration sided with the major record labels in their civil lawsuit against an alleged and briefly famous Kazaa user named Jammie Thomas. Now the Obama administration is doing so as well.
In a legal brief filed Friday, the U.S. Department of Justice said the whopping $1.92 million fine that the Recording Industry Association of America slapped on Thomas was perfectly constitutional.
Federal prosecutors argue the relevant law is "carefully crafted" and consistent with "due process" and part of a necessary "regime to protect intellectual property. Under current law, copyright holders can sue for up to $150,000 per work (such as an MP3 file, DVD, or book).
Their brief adds: "Congress took into account the need to deter the millions of users of new media from infringing copyrights in an environment where many violators believe that they will go unnoticed." It does not take a position on issues other than the constitutional ones.
In the case of Jammie Thomas--now Jammie Thomas-Rasset--a jury decided that she had willfully infringed copyrights on 24 songs and awarded the RIAA a total of $222,000. Her lawyers successfully argued for a new trial, in which the RIAA won $80,000 per song in damages, or a total of $1.92 million.
Now her lawyers are asking for a third trial on grounds that the total fine is unreasonably, and even unconstitutionally, high.
Jammie Thomas
(Credit: Jammie Thomas)Thomas' attorneys' brief filed last month says the up-to-$150,000-per-song statutory damages "bear no reasonable relation to the actual injury suffered by the plaintiffs. The damages awarded are grossly in excess of any reasonable estimate of that injury...An award of statutory damages of $1.92 (million) for 24 songs assessed as punishment, not compensation, shocks the conscience and must be set aside."
The Obama Justice Department's arguments echo the ones made by the Bush Justice Department in a December 2007 brief, which said: "Congress has crafted a statute that serves as a deterrent to those infringing parties who think they will go undetected in committing this great public wrong."
Friday's filing wasn't exactly unexpected; for one thing, the Justice Department is generally tasked with defending acts of Congress from legal challenges. It sided with the RIAA in a recent Massachusetts case, and in an unrelated peer-to-peer case in New York.
The RIAA has said it's willing to settle its Minnesota case against Thomas for far less than the seven-figure sum it's now owed. "It was a jury of regular folks who rendered this decision," Jonathan Lamy, a spokesperson for the RIAA, said in June. "We do not seek any specific damage awards. For the few existing cases, this verdict is a reminder of the clarity of the law. With any case, including that of Ms. Thomas-Rasset, we seek to settle these out of court. We stand ready and willing to talk settlement with Ms. Thomas-Rasset or anyone. We think that's most beneficial for everyone involved."
One of the RIAA attorneys in the Thomas case was Donald Verrilli of Jenner and Block in Washington, D.C. In February, Obama named Verrilli to a senior Justice Department post as associate deputy attorney general.
Vice President Joe Biden lauded Hollywood at a gala dinner in Washington, D.C. on Tuesday evening, assailed movie piracy, and promised film executives that the Obama administration would pick "the right person" as its copyright czar.
Just days after four Pirate Bay defendants were found guilty in Sweden, Biden warned of the harms of piracy at a private event organized by the Motion Picture Association of America in the sumptuous, newly renovated Great Hall of the National Portrait Gallery in Washington, D.C.
"It's pure theft, stolen from the artists and quite frankly from the American people as consequence of loss of jobs and as a consequence of loss of income," Biden said, according to a White House pool report.
Biden blasted China, saying its intellectual property laws remain "largely ineffective" and will end up "strangling their own creative juices," and compared it to what he described as India's more effective anti-piracy regime. He singled out Canada, a close U.S. ally, as needing stronger laws; it never signed the treaty that led to the Digital Millennium Copyright Act, and a proposal to adopt anti-circumvention restrictions was never adopted.
He also addressed President Obama's forthcoming decision about who will be named the intellectual-property enforcement coordinator, better known as the copyright czar. Copyright industry lobbyists sent a letter Monday to the president asking him to pick someone sympathetic to their concerns, while groups that would curb copyright law sent their own letter urging the opposite approach.
We "will find the right person for intellectual property czar," Biden said.
Under a law approved by the U.S. Congress last October, Obama is required to appoint someone to coordinate the administration's IP enforcement efforts and prepare annual reports.
Senators attending the MPAA gala included Richard Durban (D-Illinois); Sheldon Whitehouse (D-R.I.); Frank Lautenberg (D-N.J.), Judd Gregg (R-N.H.); Amy Klobuchar (D-Minnesota); Patrick Leahy (D-Vermont); Roger Wicker (R-Mississipi); and Ben Nelson (D-Nebraska).
An unspoken reason for the MPAA event--which included a symposium earlier in the day with remarks from top House Democrats and Commerce Secretary Gary Locke--was the loss of $246 million in tax breaks when the Senate revised the economic stimulus bill earlier this year. An MPAA report released Tuesday appears designed to avoid a repeat of that setback, listing the number of movies being filmed in each state.
Earlier in the day, Locke also talked up more government action against peer-to-peer piracy. "The recent revelation that an illegal copy of the upcoming movie "Wolverine" had been posted on the Internet prior to its theatrical release underscores the problem the industry faces...As a former prosecutor, I believe in the full and impartial enforcement of the law," he said.
On copyright, President Obama has signaled a more pro-industry approach than his predecessor, which has alarmed advocates of less restrictive laws.
The president chose as top Justice Department officials the music industry attorney who pulled the plug on Grokster and another longtime Recording Industry Association of America ligitator. The Obama administration recently sided with the RIAA in a file-sharing suit, and Biden was a staunch RIAA and MPAA ally as a U.S. senator.
"I think sometimes you underestimate the impact you have, and not just entertaining but uplifting," Biden told the audience at the MPAA event. "I wish I could inspire the way you do."
The Obama administration has sided with the recording industry in a copyright lawsuit against an alleged peer-to-peer pirate, a move that echoes arguments previously made by the Bush administration.
A legal brief filed Sunday in a case that the Recording Industry Association of America is pursuing in Massachusetts argues that federal copyright law is not so overly broad and its penalties not so unduly severe that they count as "punitive." Current law allows a copyright holder to receive up to $150,000 in damages per violation.
The brief says "the harms caused by copyright infringement" on the Internet include limiting "a copyright owner's ability to distribute legal copies of copyrighted works. The public in turn suffers from lost jobs and wages, lost tax revenue, and higher prices for honest purchasers of copyrighted works."
The Obama administration's choice to intervene in the Massachusetts lawsuit comes after the Bush administration joined the RIAA's lawsuit against Jammie Thomas. It, too, defended the constitutionality of the statute--one of the Justice Department's duties--that a jury decided Thomas had violated. (Thomas has been awarded a new trial.)
The Massachusetts case could prove to be an important one. A group of Harvard law school students, with the help of Harvard law Professor Charles Nesson, is providing defendant Joel Tenenbaum with an aggressive legal defense. They aim to convince the courts that the law the RIAA relies on is so Draconian it amounts to "essentially a criminal statute" and is therefore unconstitutional; that it grants too much authority to copyright holders; and that it violates due process rights guaranteed by the U.S. Constitution.
Those are the arguments that the Justice Department is attempting to refute. Its brief says that while the administration "does not address" the nonconstitutional arguments, "if the court finds it necessary to reach the constitutional questions at this time, then it should reject each of defendant's constitutional claims."
It adds: "The remedy of statutory damages for copyright infringement has been a cornerstone of our federal copyright law since 1790, and Congress acted reasonably in crafting the current incarnation of the statutory damages provision. Congress sought to account for both the difficulty of quantifying damages in the context of copyright infringement and the need to deter millions of users of new technology from infringing copyrighted works in an environment where many violators believe that their activities will go unnoticed."
Until recently, a top Justice Department official was representing the RIAA in the Massachusetts case. In early January, Barack Obama picked Tom Perrelli for associate attorney general; he was listed as a "lead attorney" for the RIAA in the case and had filed a formal notice of withdrawal less than two weeks earlier.
On February 4, Obama picked as associate deputy attorney general Donald Verrilli, who represented the RIAA in the Jammie Thomas case. Verrilli didn't file a motion to withdraw from the case until last week.
A federal judge in Rhode Island has postponed a hearing in a case that may test the legal underpinnings of the Recording Industry Association of America's suits against file swapping.
U.S. Magistrate Judge Lincoln Almond on Monday rescheduled the hearing until January 6. Its purpose is to determine whether the parents of the defendant, Joel Tenenbaum, will be forced to turn over their computer to the RIAA's lawyers.
This case is unusual because a group of Harvard law school students, with the help of Harvard law professor Charles Nesson, is providing Tenenbaum with an aggressive legal defense. Their goal: to argue that the law the RIAA relies on is unconstitutional.
Few judges are eager to strike down laws duly enacted by Congress, and there's no evidence that the judges in this case are an exception to that rule. Still, the Harvard team is arguing that a 1999 copyright law is so Draconian it amounts to "essentially a criminal statute;" that it grants too much authority to copyright holders; and that it violates due process rights guaranteed by the U.S. Constitution.
In August, Tenenbaum's lawyers filed a countersuit in Massachusetts district court, accusing the RIAA of abuse of process and saying the law was not intended to award such "grossly, excessive punitive damages."
The RIAA has not exactly been idle. It responded with a motion (PDF) saying that "while it is clear that Defendant would rather not be a defendant in a copyright infringement suit, this is not the basis of a claim for abuse of process." More broadly, the recording industry argues that billions of songs are illegally swapped every month on peer-to-peer networks, and that as a result it has suffered "devastating" financial losses.
U.S. District Judge Nancy Gertner's courtroom in Boston is where most of the action has been taking place; the Rhode Island proceedings are a sideshow to the main event.
So far, Gertner has seemed frustrated by the large number of RIAA-named defendants who have shown up in her courtroom, typically lacking lawyers and without much knowledge of what their rights and obligations are under the law.
One hint at her possible receptivity to the Harvard students' argument can be found in her remarks at a hearing earlier this year: "There is a huge imbalance in these cases. The record companies are represented by large law firms with substantial resources. The law is also overwhelmingly on their side. They bring cases against individuals, individuals who don't have lawyers and who don't understand their legal rights...the formalities of this are basically bankrupting people...At a certain point after 133 cases in my court and countless around the country, the plaintiffs are going to realize this is making no sense and making them look bad."
The Recording Industry Association of America is appealing a judge's decision last month to declare a mistrial in the case of Jammie Thomas, who was ordered to pay the recording industry $222,000 for allegedly sharing music online.
Jammie Thomas
Thomas was charged in October with violating copyright law by making 24 songs available for others to download on the Kazaa network. In late September, though, U.S. District Judge Michael Davis threw out the verdict on the grounds that he originally misguided the jury by indicating that simply the act of making a copyrighted song available for sharing amounts to infringement.
The RIAA is requesting that Davis let its appeal go through before scheduling a retrial for Thomas.
"Although this court is not the only court to have questioned the making-available right, numerous others have concluded that making a copyrighted work available does constitute a distribution," the RIAA wrote in its request to stay the retrial.
Thomas is the only individual charged with copyright infringement by the RIAA who has taken her case to trial.
Business leaders discuss promoting IP protection at the U.S. Chamber of Commerce on Wednesday.
(Credit: Stephanie Condon/CNET)WASHINGTON--With only five days left for President Bush to decide whether to sign into law a controversial copyright bill, business lobbyists and even the AFL-CIO are pushing for it to become law.
Most bills to expand copyright law are bipartisan--one aimed at file-swappers and prerelease movies in 2005 comes to mind--and the so-called Prioritizing Resources and Organization for Intellectual Property Act is no exception. Sens. Patrick Leahy, a Democrat, and Arlen Specter, a Republican, are the sponsors, and it enjoys the support of the Recording Industry Association of America.
But the Pro-IP Act is unusual because the Bush administration threatened a veto last month. It's been subsequently amended, and the changes are likely to assuage the administration's concerns, but the U.S. Commerce Department told CNET News that it is still reviewing the revised language.
While industries have been defensively adapting to a globalized economy and game-changing technologies, intellectual property holders are on the offense. The messages from companies like Procter & Gamble and NBC Universal are being carefully tailored to reveal the benefits of bolstering IP protections--whether it's a promise to U.S. politicians of more jobs, better products for consumers, or faster development for leaders abroad.
Industry representatives discussed how to craft those messages, and what obstacles stand in their way, on Wednesday at the U.S. Chamber of Commerce's fifth annual intellectual property summit.
So far, its message to the U.S. government appears to be working. The Pro-IP Act passed unanimously in the Senate and saw bipartisan support in the House.
In the case of the entertainment industry, it is imperative to educate people about "the ramification of (IP) theft to the people who work on the sets, in makeup, even selling concessions"--not just the highly paid actors and producers, said Rick Lane, senior vice president for government affairs at News Corp.
Industries have coordinated their message with union leaders to emphasize that IP protection is, at its core, a jobs issue.
"America's workers are also being victimized by a tidal wave of counterfeiting...and digital theft...(that) threatens the well-being of the U.S. economy, endangers our citizens, and steals our jobs," John Sweeney, president of the AFL-CIO wrote in The Hill, a newspaper ubiquitous around the Capitol.
The message seems to be sinking in not only with congressmen but also with the presidential candidates. Wednesday's panelists see the presidential election's emphasis on green technology as a positive sign.
"That's a recognition of the role of innovation and its tie to the U.S. economy," said Rick Cotton, executive vice president and general counsel of NBC Universal. "This is not a low-cost manufacturing economy--what we have to offer is our innovation."
The need to protect and stimulate innovation is also emphasized with foreign governments, especially those like Brazil that have implemented compulsory licenses, which forces IP holders to grant a state rights to use the intellectual property in question at a set rate.
"We're actually trying to spread that gospel in lots of different countries," said Jon Soderstrom, president of the Association of University Technology Managers. "What we see is people making assertions about the flaws (of IP protection), like hindering the flow of research--none of which is true. The evidence shows it's actually promoting innovation."
Lane said the U.S. should be "using the pulpit of the presidency to explain the importance of IP to other economies."
Creating a favorable environment for IP holders involves convincing consumers as well as lawmakers that IP enforcement is worthwhile.
Encouraging consumers to veer away from bootlegged content simply requires "sending them cues," said Cotton.
NBC has had a great deal of success routing viewers of the Olympics and popular videos like SNL sketches to its own sites.
"That combination of ease of access and the desire of consumers to access content when, and how they want it," Cotton said, "have to go hand and hand, and then we see the possibility of continuing investment."
CNET's Declan McCullagh contributed to this report
Updated at 12:10 p.m. PDT with quote from the RIAA.
A federal judge on Wednesday threw out the verdict against Jammie Thomas, the peer-to-peer network user ordered to pay the recording industry $222,000 for allegedly sharing music online.
Jammie Thomas
U.S. District Judge Michael Davis of Duluth, Minn., declared a mistrial in the case against Thomas, who was charged in October with violating copyright law by making 24 songs available for others to download on the Kazaa network.
Davis set aside the verdict on the grounds that he misguided the jury, telling jurors that simply the act of making a copyrighted song available for sharing amounts to infringement. The judge first indicated in May that he was considering granting a new trial.
In June, the Electronic Frontier Foundation and other consumer and industry groups weighed in, also claiming the jury instructions were erroneous.
The Recording Industry Association of America argued that the jury instructions were valid.
"Requiring proof of actual transfers would cripple efforts to enforce copyright owners' rights online--and would solely benefit those who seek to freeload off plaintiff's investment," RIAA attorney Timothy Reynolds wrote in a court filing.
Thomas is the only individual charged with copyright infringement by the RIAA who has taken her case to trial.
RIAA spokesman Jonathan Lamy said Davis' decision was not surprising, but the RIAA still had confidence in its case.
"As with all our illegal downloading cases, we have evidence of actual distribution--an assertion this court and others nationwide have made clear constitutes infringement," he said. "We have confidence in the facts assembled against the defendant."
It only took a few days after politicians returned from their summer holidays for Hollywood and the major record labels to resume their legislative push to rewrite and expand digital copyright law.
The Recording Industry Association of America and the Motion Picture Association of America are lobbying for a pair of bills that enjoy bipartisan support. Both are designed to give the federal government more power to police copyright violations, and both are likely to run into opposition from political foes of the RIAA and MPAA.
On Thursday, the Senate Judiciary Committee is scheduled to vote on the so-called Enforcement of Intellectual Property Rights Act, a 46-page bill that was introduced in July by Vermont's Patrick Leahy and Pennsylvania's Arlen Specter, the committee's top Democrat and Republican.
The measure represents a fusion of previous bills, including ones that have enjoyed support in both the Senate and House of Representatives, and one that Leahy introduced in November 2007. One of the more controversial sections of the latest version would permit the Justice Department to file a civil lawsuit against "any person" committing a copyright violation--which would include thousands, or perhaps millions, of piratical peer-to-peer users.
A group of librarians and nonprofit groups, including the American Library Association, Public Knowledge, and the Electronic Frontier Foundation, sent a letter to senators on Wednesday that says copyright holders--and not government lawyers funded by tax dollars--should be the ones filing the lawsuits.
"Movie and television producers, software publishers, music publishers, and print publishers all have their own enforcement programs," the letter says. "There is absolutely no reason for the federal government to assume this private enforcement role." (The letter also criticizes the bill's criminal and civil forfeiture sections, and impounding of business records pre-trial if someone is accused of copyright infringement.)
The second RIAA- and MPAA-backed bill was introduced by senators Max Baucus, a Montana Democrat, and Orrin Hatch, a Utah Republican, on Wednesday. It's called the International Intellectual Property Protection and Enforcement Act, and it aims to ratchet up copyright pressure against countries that the U.S. Trade Representative deems to be taking too few steps against piracy.
"We can't let other countries repeatedly rip off the movies Americans make, the products Americans design and the other fruits of American ingenuity without taking some action," Baucus said in a statement.
The Baucus-Hatch bill says that the executive branch "shall develop an action plan" against such nations, with benchmarks including "adequate and effective protection of intellectual property rights." Failure to meet those benchmarks may result in the Feds suspending government procurement contracts involving that nation, and halting loans and development aid, including credit from the Overseas Private Investment Corporation and the Export-Import Bank of the United States.
Another section says the president "shall ensure that an intellectual property attache with the title of Minister-Counselor is placed in the United States embassy of each foreign country with which the President determines the United States has a commercially significant relationship."
The RIAA applauded the bill in a statement, saying it will "protect this national resource with new, meaningful tools." The MPAA's Dan Glickman said: "We appreciate the leadership of Chairman Baucus and Senator Hatch. Their efforts to strengthen the enforcement of U.S. intellectual property rights around the world are critical to protecting the many American business sectors and American workers that depend on intellectual property."
Jammie Thomas, the Minnesota woman who was slapped with a $222,000 penalty for allegedly sharing music on the Kazaa network, asked for a new trial way back in October 2007.
The surprising thing is that she may get one.
U.S. District Judge Michael Davis wrote Thursday that he was "contemplating granting a new trial." That's because, Davis said, he may have wrongly instructed the jury that merely making a copyrighted song available in a shared folder amounts to infringement. Oral arguments on this question are set for July 1.
Asking for a new trial is pretty standard, but the request isn't granted that frequently. The reason Davis is willing to consider it is that one case that the Recording Industry Association of America relied on is being reconsidered and a second, which neither side cited, suggests that an actual transfer has to take place. (The 1993 8th Circuit case, which is binding precedent, says that infringement "requires an actual dissemination.")
A good portion of the RIAA's case, at least in this aspect of the lawsuit, centers on the "making available" argument. Here's what I wrote last October:
What's important to remember here is that the RIAA's victory rests in large part on...the judge's decision that the record labels need only prove that Thomas made copyrighted music "available" on the Kazaa network. That means leaving the songs in a publicly accessible directory where they might possibly have been downloaded. Thomas confirmed earlier Monday that her appeal to the 8th Circuit will center on that point...It's true that ditching the "making available" idea and making the RIAA prove the songs were actually downloaded means its lawyers would have to work harder. And it wouldn't solve all of these problems above. But it would be a small step toward repairing some of the imbalances in copyright law today.
Since then, a federal judge in New York was skeptical of the "making available" claim--though acknowledging that an "offer to distribute" arguably amount to a distribution. In an even more important case, Atlantic v. Howell, a second federal judge took a dim view of the RIAA's "making available" theory, saying:
The court agrees with the great weight of authority that Sec. 106(3) is not violated unless the defendant has actually distributed an unauthorized copy of the work to a member of the public. The statute provides copyright holders with the exclusive right to distribute "copies" of their works to the public "by sale or other transfer of ownership, or by rental, lease, or lending." Unless a copy of the work changes hands in one of the designated ways, a "distribution" under Sec. 106(3) has not taken place. Merely making an unauthorized copy of a copyrighted work available to the public does not violate a copyright holder's exclusive right of distribution.
Meanwhile, Thomas' appeal to the 8th Circuit is still under way.
So what will happen if Thomas receives a new trial? From the RIAA's perspective, it may not matter that much. When I was talking to the RIAA last month about one of its other cases, they said: "But in any event, we download complete copies of songs from the individual defendants in all our user lawsuit cases, thereby rendering the entire 'making available' issue irrelevant."
The Recording Industry Association of America says a New York judge's ruling earlier this week really wasn't much of a setback for them. In fact, they say they don't mind it much at all.
This is my article from Tuesday to which the RIAA is responding. And here's e-mail from Wednesday that I was asked to attribute to the RIAA's lawyers, which I've reproduced in full:
The statement in the very first sentence of the posting that the court requires the record companies 'to demonstrate that unlawful copying took place' is entirely inaccurate and is precisely the opposite of what the court held. The court specifically held that proof of actual copying or actual dissemination is not required, and that simply making the work available for copying can be a distribution as long as the work was offered 'for purposes of further distribution.' Contrary to the thrust of the article, the court did in fact agree with the record companies that "making available" a copyrighted work under those circumstances is an infringement. But in any event, we download complete copies of songs from the individual defendants in all our user lawsuit cases, thereby rendering the entire "making available" issue irrelevant.
It's true that U.S. District Judge Kenneth Karas said that an "offer to distribute" can amount to a distribution (which helps the RIAA). But Karas rejected the RIAA's argument that a Kazaa user who "made available" copyrighted music necessarily violated the law.
The RIAA has served up its "making available" argument in other cases too, including the Jammie Thomas lawsuit that resulted in a $222,000 jury verdict last October. Here's some more detail on why they've been enthusiastic about it.
Whether the RIAA now stands a worse chance of winning in the New York case depends on the distance between their "made available" and "offer to distribute" arguments. For that we'll need to wait to see the group's revised complaint--they have 30 days to submit it--and the court's next ruling.
Update: Fred von Lohmann at the Electronic Frontier Foundation points me toward his writeup of a separate ruling from a judge in Boston, who said that the RIAA must show actual distribution, and "making available" or "offer to distribute" won't do. But it was just a preliminary ruling, so stay tuned for more.
