Note: See Usenet.com's reaction at "Usenet.com says RIAA 'whittling down' Betamax case."
The Recording Industry Association of America has prevailed in its copyright fight against Usenet.com, according to court documents.
In a decision that hands the RIAA an overwhelming victory, U.S. District Judge Harold Baer of the Southern District of New York ruled in favor of the music industry on all its main theories: that Usenet.com is guilty of direct, contributory, and vicarious infringement. In addition, and perhaps most important for future cases, Baer said that Usenet.com can't claim protection under the Sony Betamax decision. That ruling says companies can't be held liable for contributory infringement if the device they create is "capable of significant non-infringing uses."
Baer noted that in citing the Betamax case, Usenet.com failed to see one important difference between it and Sony. Once Sony sold a Betamax, an early videotape recorder, the company's relationship with the buyer ended. Sony held no sway over what the buyer did with the device after that. Usenet.com, however, maintains an ongoing relationship with the customer and does has some say in how the customer uses the service.
Usenet.com's lawyers could not be reached Tuesday evening.
The two-decade-old Usenet network was one of the early ways to distribute conversations and binary files, long before the Web or peer-to-peer networks existed. Usenet.com is a company that enabled users to access the Usenet network.The RIAA filed suit against Usenet.com in October 2007, accusing the company of encouraging customers to pay up to $19 a month by enticing them with copyrighted music.
The case is highly unusual because of Baer's many findings of discovery misconduct by the Usenet.com side. The rules of discovery in a civil case requires both sides to exchange information. The RIAA produced evidence, however, that Usenet.com destroyed evidence or failed to produce witnesses on multiple occasions.
The RIAA accused Usenet.com of intentionally destroying the contents on seven hard drives that contained employee-generated data; providing false information; and attempting to prevent employees from giving depositions by sending them to Europe.
The judge found the evidence credible but denied the RIAA's motion to hand it a victory based solely on the misconduct. Instead, the judge sanctioned Usenet.com "from asserting (the company's) affirmative defense of protection under the DMCA's safe harbor provision."
The Digital Millennium Copyright Act's safe harbor provides refuge to Internet service providers from being held responsible for criminal acts committed by users. Without that and without the Betamax decision, Usenet.com was a sitting duck.
In a brief note posted Tuesday to RIAA.com, the trade group for the music industry said: "We're pleased that the court recognized not just that Usenet.com directly infringed the record companies' copyrights but also took action against the defendants for their egregious litigation misconduct."