New Zealand's Copyright Tribunal has handed down its first penalty to an Internet subscriber accused of downloading and sharing music without permission. While the case is a victory for the Recording Industry Association of New Zealand, the details make it a rather hollow one. All attempts by the music industry group to extract large punitive damages failed due to an almost complete lack of evidence.

The so-called ‘Skynet’ anti-piracy law in New Zealand has been operational for some time, but it took until yesterday for the legislation to claim its first victim.

The case involves a female customer of local ISP Telecom and perhaps dates back well over a year.

Background

The unnamed individual was sent a so-called ‘detection notice’ by Telecom’s copyright infringement team on November 24 2011. The claim, originating from Island Def Jam Music Group (Universal), stated that the subscriber had shared the Rihanna song ‘Man Down’.

Then, on June 19 2012, a second ‘warning notice’ was sent to the same subscriber after the woman was discovered to have uploaded the same track again.

A third ‘Enforcement Notice’ was sent to the individual on July 30 2012, claiming that this time she had been monitored by RCA Records (Sony Music) sharing the Hot Chelle Rae track ‘Tonight Tonight’.

Following this final ‘strike’ the subscriber’s case was filed with New Zealand’s Copyright Tribunal in August 2012. The following month the woman wrote to the Tribunal outlining her explanation for the alleged infringements, accepting the claims on one track but denying another, and stating that she had experienced difficulties shutting her torrent client down.

Confession

“The first song downloaded was a song called Man Down by Rihanna. I accept responsibility for this. I downloaded this song unaware that in doing so from this site was illegal,” she wrote in her submission.

“When this song was downloaded to my computer, a whole uTorrent program downloaded onto my computer..[W]hen I turned my computer on it said that the song was still downloading and maybe that caused the song to register twice as it being downloaded?”

As for the Hot Chelle Rae track, that remains a mystery.

“I can’t claim responsibility for this as it wasn’t done by myself or anyone in this household but if I find the person responsible for downloading this through my internet then I will definitely enforce the consequences behind do so,” she concludes.

Guilty upon accusation (but the confession didn’t help)

Interestingly, the Tribunal noted that there was insufficient evidence in the case for it to make any detailed findings but since there is a “statutory presumption” that each incidence of file-sharing alleged in an infringement notice constitutes an actual infringement of copyright, the Tribunal accepted that illicit file-sharing had taken place.

Calculating the punishment

So, with guilt under current law established, the Tribunal set about the task of a financial punishment. According to regulations, in a downloading case the cost of the infringed products must be considered. Man Down is available of iTunes for $2.39 (US$2.00) and Tonight Tonight at $1.79 (US$1.50).

However, since this case also involves uploading (distribution) there is an additional cost to be considered there. RIANZ wanted to hold the individual responsible for many alleged uploads to other BitTorrent users but the Tribunal wasn’t happy with that suggestion.

“As the [RIANZ] rightly acknowledges, a difficulty in this case is that it is not known how many downloads, if any, were made from the sound recordings uploaded by the account holder. Using current internet detection services the rightsholders were not able to obtain details of the number of persons who downloaded the tracks in issue,” the Tribunal wrote.

With this in mind the Tribunal said it would order the subscriber to pay RIANZ double the iTunes price of Man Down (2 x $2.39) and the same for Tonight Tonight (2 x $1.79) – a total of $6.57 (US$5.49). This aspect of the Tribunal’s decision will be a huge disappointment for RIANZ.

But despite the low penalty to pay to rightsholders, a few more loose ends still had to be tied up. The Tribunal said that the subscriber should pay the costs of sending the warning notices – a total of $50 (US$42.00) – and the Tribunal application fee of $200 (US$167).

The ‘deterrent sum’ – and lack of evidence.

Finally there was the issue of the “deterrent sum”. Three elements are to be considered – the “flagrancy” of the infringement, the effect of the infringing activity on the market for the work and whether the other sums awarded by the Tribunal already constitute a sufficient deterrent.

In this respect RIANZ argued that the fact the subscriber had uTorrent on her computer, had been monitored three times over an eight month period, and that it “defied common sense” that more infringements hadn’t been carried out in that time other than the ones detected. The music group also argued that the first two warnings not to infringe had been ignored by the subscriber.

In response the Tribunal said that the factors listed by RIANZ could be common to most of the cases coming before the Tribunal in future so therefore could not be regarded as “particularly flagrant”. It did accept, however, that the infringements took place over a lengthy period, but noted that the subscriber had a clean record, took responsibility, apologized and engaged with the Tribunal.

In respect of the potentially damaging effect on the market caused by the infringements but with no evidence to back up their claims, RIANZ put forward a report commissioned in 2008 by the IFPI in the UK. It didn’t help their case.

“The Tribunal has felt unable to accord much weight to this UK report,” the Tribunal noted adding that it related to a different BitTorrent client (Azureus as apposed to uTorrent), related to different works, related to entire albums rather than to individual tracks, and is nearly five years out of date.

Decision

With these issues in mind the Tribunal ordered the subscriber to pay a deterrent sum of $120 per infringement to a total of $360 (US$301.00).

Overall the subscriber will have to pay a grand total of $616.57 ($515.64), hardly the amount RIANZ had in mind when they started this whole “3 strikes” machine rolling several years ago.