A copyright ruling no one can like; CNetNews.com, 7/13/10

Greg Sandoval, CNetNews.com; A copyright ruling no one can like:

"Legal experts sympathetic to copyright owners as well as those known for supporting technology companies are criticizing a federal judge's decision to lower a jury award in a high-profile lawsuit about file sharing.

A year ago, a jury found college student Joel Tenenbaum liable for willful copyright infringement for sharing 30 songs, and later set a damages award of $675,000. On Friday, U.S. District Judge Nancy Gertner dramatically reduced the award to $67,500.

Gertner wrote in her decision that the original amount was too high and "unconstitutional." With regard to statutory damages in a copyright case, her decision is believed by some legal experts to be unprecedented. Not only are copyright owners attacking Gertner's reasoning, but so are some well-known lawyers from the pro-technology side.

Eric Goldman, a law professor at Santa Clara University who is often critical of entertainment companies in copyright litigation, predicted much of Gertner's ruling is vulnerable to appeal, which the RIAA will likely do, a high placed music industry source told CNET on Tuesday.

"This ruling is critically important," Goldman wrote on his blog on Monday. "It has the potential to [affect statutory damages for every copyright case that involves them]." Goldman said that despite feeling sympathy with the judge's aversion to the size of the award, brought on by what he called a "bad brew of an aggressive copyright lobby and pliable politicians," her arguments "did not completely convince me."

Statutory damages are a dollar range determined by Congress that sets limits on what juries can assess for copyright infringement. For willful infringement, a jury can assess damages as high as $150,000 per incident. Gertner's ruling is more proof that the damage amounts lawmakers have enabled the music industry to claim for copyright infringement are too high are the courts--as well as much of the public--to stomach. In major file-sharing cases, the Recording Industry Association of America, the trade group representing the four largest record companies, is 0-for-2 in seeing jury awards held up by the courts.

Last year, Jammie Thomas-Rasset, the accused music-pirating Minnesota woman, saw U.S. District Judge Michael Davis slash the jury-awarded damages from $1.9 million to $54,000.

"The damages range within the law are an important signal about the potential penalties for illegal conduct," the RIAA said in a statement. "A jury decides, after hearing all the facts, what is the appropriate penalty. If a judge can disregard those facts and simply impose his or her own personal views, that undermines an important deterrent message established by Congress."
Judge's authorityIn her ruling, Gertner gave consideration to the fact that there's no proof Tenenbaum shared music for commercial gain. But by reducing the award, Gertner overruled the jury as well as Congress.

"I don't think the law gives the judge the authority to lower the jury's award," said Ben Sheffner, an entertainment attorney and frequent blogger on copyright issues. "I don't think she should have altered it. I don't mean to say that I'm entirely comfortable with the amount as a matter of policy...but her decision seriously undermines the authority of Congress to set the range of statutory damages."

Not everybody sees it that way. Corynne McSherry, a staff attorney at the Electronic Frontier Foundation, an advocate group for tech and Internet users, on applauded Gertner decision.
"Gertner found there is quite a bit of evidence that Congress did not intend statutory provisions to be applied this way," McSherry said. "She concluded that the [original] damages award went far beyond what Congress intended or contemplated."

Gertner's decision will trigger all kinds of other problems, Goldman predicted.

"I expect more litigation battles over statutory damages," Goldman said. "Almost every copyright infringement defendant can advance a non-frivolous argument that statutory damages in their case would be unconstitutional. As a result, statutory damages cases will take more time and money."

Hurting 'Hurt Locker' For the music industry, this may not mean much. The top labels gave up on filing copyright complaints against individual file sharers in December 2008. Gertner's decision, however, could come into play for Voltage Pictures, producers of the Oscar-winning film "The Hurt Locker."

D.C.-area law firm Dunlap, Grubb, & Weaver has begun filing lawsuits against individual file sharers on behalf of independent production companies. Voltage is among about a dozen filmmakers that have signed up with Dunlap, which is reportedly intending to sue a total of 50,000 people for allegedly illegally sharing movie files.

In letters, Dunlap notifies the accused that they can settle the case quickly by paying $1,500 but that if they refuse, the company could eventually ask for $150,000 if they can prove the person is liable for willful infringement. That kind of claim coming after award reductions in both the Thomas-Rasset and Tenenbaum cases could ring hollow.

Gertner's decision will also make settling copyright much harder, Goldman said.

"Defendants will have increased confidence in their low case valuations (given the possibility that statutory damages will be Constitutionally capped at $2,250/work)," Goldman wrote, adding that "most copyright owners will not accept this discount. As a result, due to the doctrinal uncertainty, the litigants will have an even harder time reaching a compromise."

http://news.cnet.com/8301-31001_3-20010428-261.html

Judge Says Damages In Tenenbaum Case Were 'Unconstitutionally Excessive'; TechDirt.com, 7/9/10

Mike Masnick, TechDirt.com; Judge Says Damages In Tenenbaum Case Were 'Unconstitutionally Excessive':

"It seems like the Joel Tenenbaum case is simply an echo on the Jammie Thomas case. Both lawsuits involved very flawed defendants who probably shouldn't have gone through with their fights against the RIAA. In both cases, juries awarded huge statutory damages awards to the record labels. In Thomas' case it was $1.92 million or $80,000 per song. In the Tenenbaum case, it was $675,000 or $22,500 per song. Even though both cases were what I considered to be "bad" cases (too much evidence that both Thomas and Tenenbaum were actually heavily involved in file sharing), both have used the rulings to challenge the statutory damages awards as being unconstitutional.. and now the judges in both cases have agreed.

As you probably recall, the judge in the Thomas case reduced the $1.92 million award to $54,000 (or $2,250 per song) and today comes the news that Judge Gertner in the Tenenbaum case has declared the original damages award to be "unconstitutionally excessive" and slashed the total by 90% down to $67,500. In both cases, the judges actually set the per song damages award down to $2,250. There were lots of questions when Judge Davis did this in the Jammie Thomas case if a judge could actually do that, and that's still being fought to some extent. It seems likely that, as with the Thomas case, the RIAA will appeal this particular ruling because it most certainly does not want a precedent on the books that can lower the statutory damages rate for copyright.

This could start to get very interesting. Both judges are clearly taking a stand that the actual statutory rates set by Congress are ridiculously high and totally out of proportion with the actions done by the defendants. There is definitely some precedent for ridiculously high damages awards being thrown out as unconstitutionally excessive... but not when it comes to statutory rates, where the courts have generally said Congress has great leeway to determine what is and what is not excessive. However, with two judges pointing out that a number within the range provided by Congress is excessive, it's setting up a potentially very important legal battle about the statutory damages associated with copyright.

The industry has always pushed for higher and higher damages, somehow believing that will act as a disincentive for infringing. Yet, there doesn't appear to be any evidence at all that it's working. Instead, such high damages have actually done the opposite. They've convinced many, many people of just how ridiculously unfair and out of touch copyright laws are. The general public can recognize that sharing a single file shouldn't lead to a fine of tens of thousands of dollars. It's so out of proportion with reality that they begin to question the overall setup of copyright law itself. The industry's focus on higher and higher copyright damages has been a major strategic mistake that has backfired. These rulings -- which the industry will fight tooth and nail -- might actually be a blessing in disguise for the industry. If the actual damages weren't so ridiculous, people probably wouldn't be so up in arms over copyright issues."

http://www.techdirt.com/articles/20100709/11305410154.shtml