Tenenbaum Appeal Heard: Is It Okay To Make Someone Pay $675,000 For Downloading 30 Songs?

from the we-will-soon-find-out dept

Was file sharing in existence at the time the statute was passed?

Is "making available" the same as distribution?

"It's more than that, your honor. It's really the complete undermining of the copyright. What I mean by that is you can't just isolate what's going on here as if it's an individual's, by copying it, has not gone and bought the work on iTunes or not bought the work in a record store when we used to have record stores. What happens is, by distributing it to others, there are... the viral nature of this technology, really has a substantial impact on the value of the work. And the way I'd ask you to think about it is this: one, I think, relevant question in a statutory damages case is, what would it cost to get a license for what the defendant has done. And, if all the defendant had done was making a copy and that was it, then maybe an analogy to just getting a copy off of iTunes would be appropriate. But here, by distributing it... if someone wanted to go to one of the record companies and say 'we'd like to do what the defendant did in this case,' the value of that license would be essentially the value of the entire copyrighted work. Because the effect of putting this work up on peer-to-peer technology is essentially you take a copyrighted work, and put it in the public domain."

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The latest in the ongoing trial of Joel Tenenbaum, the student who was found guilty of sharing 30 songs online, and told to pay $675,000 for it, until the judge unilaterraly reduced the amount to $67,500. As we noted at the time, it really seemed like Tenenbaum had horrifically bad legal counsel , in the form of Harvard law professor Charlie Nesson, who still seems more focused on making the case a circus, rather than focusing in on the key issues. That does not, however, mean there aren't key issues here, with the big one being the appropriate standards for determining how much one should have to pay if found guilty of file sharing.The appeal was just heard on Monday, and you can listen to the oral arguments (mp3) from the court's website. It's definitely an interesting hearing and worth listening to. As with most appeals court situations, the bulk of the work is done in the briefs that were filed prior to the hearing, and which everyone is familiar with. The oral hearings get right to the point and drill down on where the panel of judges has questions.The hearing opens with a representative of the US Department of Justice, which stepped in on the case, because it was concerned that the court might rule that the statutory rates for copyright infringement (which, of course, can go up to $150,000 per infringement in cases of willful infringement) were not meant for cases like a person sharing copyrighted music for their own pleasure, rather than any commercial purpose. The Justice Department sides with the RIAA (of course), in saying that it's just fine to apply copyright law -- which really was designed for commercial cases of infringement -- to kids sharing files. At least one of the judges appears skeptical of this, asking directly:The Justice Department tries to get around this by pointing to the legislative record from the last time the statutory damage rates were changed, but the judge is not buying it. He immediately points out that if this is what Congress intended, it's quite odd that(or perhaps one other case -- by which they're referring to the Jammie Thomas case) have been tried, involving file sharing for non-commercial means. The judge clearly seems skeptical that copyright law was intended for such cases. While the lawyer tries to explain all of this away, with some claim about how everyone makes choices in who they sue, another judge chimes in and points out that for all the claims that Congress meant for these damages to cover non-commercial file sharing, wouldn't Congressknow that the lawThe lawyer again goes on to insist that since file sharing "greatly multiplies the harm" to the copyright holder (um... citation needed on that one...), Congress must have meant for such ridiculous statutory rates to cover file sharing as well. Again, the judges seem skeptical, pointing out that in this particular case, thewas that Joel Tenenbaum30 songs, and the RIAA presentedthat anyone else copied from him. In other words, they immediately push back on the claims of "harm." The lawyer, again says that there's lots of other evidence, even though the labels chose not to bring it.Once again, the court is skeptical. They ask the DoJ lawyer: if Tenenbaum had sat down in a single setting and downloaded 1,000 songs, would it be appropriate under the law to claim he owed $75,000 fordownload. And the lawyer says, effectively, yes, after going through the specific statutory rates ($750 to $30,000 for non-willful, and up to $150,000 for willful). Realizing howthis sounds, the lawyer tries to focus on the fact that the judge can tell the jury about mitigating factors and be specific in the jury instructions.From there, the lawyer for the record labels, Paul Clement, steps in, and claims that the ridiculously high damages are fine because Congress wanted to send a message about the harm of "willful" infringement. He then goes on to rail about how Tenenbaum's downloading destroyed "the value of the copyright," and complains about how the district court judge likened downloading to public performance rights. At that point, another judge interrupts, and says that he basically doesn't understand "the mechanics" of infringement, and would like more specific info.After explaining (somewhat misleadingly, but carefully) how file sharing works, Clement goes on to rail against file sharing as being incredibly damaging, because it pushes people who download to also upload... and immediately a judge cuts to the heart of one of the key legal questions:Clement sidesteps this, by noting that while the RIAA obviously thinks it is, that's "not an issue in this case." The judge doesn't want to give up, though, and asks him if the record labels "have the technological capacity to determine if distribution was actually effectuated?" Again, Clement tries to get around this, by saying it doesn't matter in this case.Another judge asks a pertinent question about damages, wondering if the actual damage to the record labels was just "the lost sales" from people not buying the music, and Clement, quite ridiculously, then tries to pin the entire demise of copyright law on Tenenbaum:He goes on to blame the poor financial state of the record labels on file sharing, and seems to indicate that we should blame Tenenbaum for this.After a brief, and somewhat inconsequential, discussion by Julie Ahrens, representing the EFF (which the judges clearly didn't have much interest in, pointing out that any of the issues raised should have been raised to the jury, not to them -- even though that would have raised questions by the RIAA folks of an attempt at jury nullification...), we move on to Tenenbaum's own defense, which was handled (with permission) by a Harvard Law student, Jason Harrow. He kicks off his talk by pointing out that the Justice Department's claim that companies didn't bring such lawsuits for non-commercial infringement in the past because it wasn't cost effective, is on its face ridiculous. After all, if you can get $150,000 per infringement for someone infringing on a $1 work, how is itcost effective to bring that lawsuit over and over again (just ask the various mass file sharing lawsuit filers...). Instead, he notes that the better explanation is that "no one thought that the statute would apply to such consumer usage."One of the judges immediately jumps in and says that Congress could have made an exception, but didn't. Harrow points out that perhaps it didn't because the result would naturally be absurd: the idea that someone sitting at home, listening to music, would suddenly be liable for billions of dollars, doesn't make any sense. The judges' questioning of Harrow seems focused on the specific standards and jury instructions, rather than on the larger issue.Finally, Charlie Nesson presents, and goes through the history of copyright law, and how statutory damages were clearly, originally intended for commercial infringement, not non-commercial. One of the judges points out that the RIAA began these lawsuits in 2003, and if Congress was upset about them, it's had eight years to amend the statute to specify that statutory damages don't apply to non-commercial use. Of course, that ignores the reality, which is that it's effectively impossible for Congress to change copyright law in a manner that benefits consumers, since the entertainment industry would go ballistic. The court also chides Nesson a bit for "pushing the bubble" very far in some of his arguments.Clement then comes back for a brief rebuttal, trying to claim that the very first Congress put in place statutory damages for copyright... which isshot down by one of the judges, who notes that the Congress felt that statutory damages, which Clement tries to sidestep around (not very successfully, in my opinion).And that's about it. If you had asked meto the oral hearing, I would have said that the court would almost certainly uphold the statutory damage rates as being perfectly reasonable. It just seems like the sort of question that the courts don't want to touch -- especially (as mentioned by one of the judges in the case) noting that Congress has said nothing on the issue in the last decade. However, I have to admit that I was surprised at how (I believe) two of the judges really seemed to dig in against both the Justice Department lawyer and the RIAA/labels lawyer, on the big key questions, and suggested, repeatedly, that they're not buying the overall claim. I'm still guessing that the court won't say that the award was unconstitutionally excessive, but I'm not nearly as certain after listening to the hearing as I was before it...

Filed Under: appeal, copyright, damages, joel tenenbaum