The RIAA has settled a case against a grandmother in Texas who was accused of sharing music over the KaZaA network. Both the RIAA and Rhonda Crain, the defendant, agreed to a stipulation of judgment against Crain, but the record labels involved in the suit will not get any damages for any infringement that occurred.

Crain, a grandmother who was displaced by 2005's Hurricane Rita, was sued for copyright infringement in September 2006 after the RIAA's investigators flagged user "kcrain@KaZaA" for sharing 572 tracks on the P2P network, including tracks by 50 Cent and Usher. After Crain denied engaging in file-sharing and rejected the RIAA's $4,500 prelitigation settlement offer, the RIAA filed suit.

Represented by Lone Star Legal Aid, Crain denied engaging in file-sharing and, in a counterclaim, said that the labels had no evidence that she had infringed on their copyrights other than her ISP's linking of the IP address flagged by SafeNet on KaZaA to her account. She also accused the labels of extortion, and in a filing this past July, accused the RIAA of using investigators not licensed by the state of Texas in violation of state law.

Crain's counterclaims were dismissed in September, but late last month, the parties agreed to settle the case. Under the terms of the settlement, a final judgment has been entered in favor of the RIAA, although Crain does not admit to infringement herself. She is permanently barred from copyright infringement and is required to delete all of the recordings that "Defendant and/or any third party that has used the Internet connection and/or computer equipment owned or controlled by Defendant."

That last stipulation may be the reason behind the RIAA's decision to settle the case without any damage award. The KaZaA user seen by the RIAA's investigators was signed on using the screen name kcrain@KaZaA, which may indicate that one of Rhonda Crain's children or grandchildren was logged into KaZaA at the time and that the defendant's only "crime" was paying for the Internet account used for file-sharing.

That was what happened in two cases that the record labels came out on the wrong end of. Debbie Foster and Patricia Santangelo triumphed over the RIAA after the judges in both cases dismissed the lawsuits with prejudice, meaning that they were both the prevailing parties.

In each case, there was evidence that someone in Foster's and Santangelo's homes may have been logged into KaZaA, but the RIAA was unable to show that the defendants themselves engaged in file-sharing. The labels had argued that, even if Foster and Santangelo had not been on KaZaA themselves, they were both liable for "secondary infringement."

Had the Crain case moved towards a trial, the RIAA would likely have found itself forced to make the same secondary infringement argument. Judge Lee R. West, who ruled in favor of Debbie Foster, found that the Copyright Act failed to support the RIAA's secondary infringement allegations. "The Copyright Act does not expressly render anyone liable for infringement committed by another," wrote Judge Lee. "Under... common law principles, one infringes a copyright contributorily by intentionally inducing or encouraging a direct infringement." Paying for an Internet account used by someone else didn't rise to that standard.

By settling with the RIAA, Crain moves out from under the legal cloud without admitting infringement and, more importantly, without having to pay any damages to the RIAA. For its part, the labels avoid the risk of having the case against Crain dismissed and being forced to pay attorneys' fees, as they had to do in the Foster case (Santangelo was given the right to seek attorneys' fees by the judge in that case, but I could find no record of an award one way or another).

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