Labels Win $220,000 in Download Damages

On October 4, a federal jury in Duluth, MN found Jammie Thomas liable for copyright infringement, imposing a damages assessment of $220,000 ($9250 for each of 24 songs). It was the first jury trial resulting from the series of lawsuits the recording industry began in September 2003. Since most of those suits were settled out of court (average settlement: $4000) or defaulted, Capitol Records v. Thomas was the rare case to actually go to court and in front of a jury. It was interesting in ways other than its seemingly high damages.

Crucial to the outcome was judge Michael J. Davis' ruling that the record labels did not have to show that any songs Ms. Thomas made available to KaZaa were actually downloaded, all they had to do was show the "making available." This they were able to do by matching Thomas' username and IP address to a specific computer. This was probably made far easier by Thomas' naivete—she used the same nickname as her email address and also made that her KaZaa user name. Thomas' lawyer attempted a defense that her address was "spoofed," but the jury apparently didn't buy it.

That's not to say Thomas was guilty—spoofing does happen and there were some serious questions raised about her ability to have loaded all the music she was said to have made available. Even the RIAA's expert witness was unable to definitively state that the timestamps on her hard drive proved whether or not discs were loaded by hand or came from a direct transfer from a hard drive. In addition, Sony's chief counsel admitted that IP addresses and user names did not positively identify real people.

What disturbed this "good music customer" is that Geek Squad member Ryan Maki testified that Thomas' Best Buy's sales history showed that she was an avid music fan who bought a lot of music from the store, both before and after the dates covered by the suit. Note to pirates—and everybody who doesn't wish to be mistaken for one: Pay cash.

What ultimately caused the severe damage assessment was the record industry's decision to go after "statutory damages" rather than actual damages and lost profits. Thus, the jury was instructed to "consider the willfulness" of Ms. Thomas' acts. Under the Copyright Act the plaintiffs were entitled to sums of $750–$30,000 per recording; however, if the act was "willful," the top end goes up to $150,000 per infringement. The jury probably felt it was not throwing the book at Ms. Thomas, since it didn't max out the damages.

Some of the most fascinating things to come out of Capital Records v. Thomas were unguarded moments in the industry's testimony. Sony's head litigator, Jennifer Pariser, admitted that the RIAA's campaign of lawsuits was actually costing the labels money, not recouping damages. In fact, Pariser said, "We haven't stopped to calculate the amount of damages we've suffered due to downloading, but that's not what's at issue here."

Pariser also disputed consumers' rights to copy music they have legally purchased. "When an individual makes a copy of a song for himself, I suppose we can say he stole a song. [Making] a copy of a purchased song is just a nice way of saying 'steals just one copy.'"

At least one congressman was disturbed by the amount of damages awarded in Capitol records v. Thomas, Representative Rick Boucher (D, VA), a long-time advocate of fair use and reformed copyright law. Boucher told Cnetnews.com reporter Anne Broache that, while he in no way sympathized with illegal P2P copying, "These damages are obviously excessive and are way out of line compared to the kinds of settlements that have been entered in similar cases." His solution? "What I think we ought to do is reform the Section 115 license [of the US Copyright Act]. That would help a lot in making available more music for lawful downloads."

"The industry needs to consider whether or not it's in its interest," he told Broache. "If the industry comes to Congress with suggestions for ways to implement [change], we'll do that."

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