ArtsWatch: LimeWire And Publishers' "Good Result"

Music publishers entered lawsuit late and left early, but labels' LimeWire case goes on

GRAMMY.com
Philip Merrill

The Recording Academy actively represents the music community on such issues as intellectual property rights, music piracy, archiving and preservation, and censorship concerns. In pursuing its commitment to addressing these and other issues, The Recording Academy undertakes a variety of national initiatives. ArtsWatch is a key part of an agenda aimed at raising public awareness of and support for the rights of artists. To become more involved, visit Advocacy Action @ GRAMMY.com and sign up for Advocacy Action E-lerts.

Former file-sharing service LimeWire reached a settlement with music publisher plaintiffs on March 4. A statement from the National Music Publishers' Association said, "We are pleased that this litigation is over. The parties worked hard to achieve a settlement that is a good result for all involved." Last May, record labels won a summary judgment against LimeWire for infringement in U.S. District Court. The publishers joined the case in June. Meanwhile, with a May court date approaching in its ongoing dispute with the record labels over damages, LimeWire hopes to demonstrate its P2P platform increased sales. To this end, LimeWire's evidence discovery has been massive. The Hollywood Reporter said e-mails produced by the labels come to 250,000 pages while subpoenas — for internal documents from Internet companies that are not parties to the lawsuit — have targeted Amazon, Apple, Google, Myspace, Yahoo, and many others. More recently, LimeWire won a favorable ruling on damages from District Judge Kimba Wood, limiting statutory infringement awards to only one for each creative work instead of multiplying the amount by every infringing copy LimeWire transmitted over the Internet. The service could still be stuck with more than $1 billion in damages but Judge Wood considered the alternative calculation — potentially trillions of dollars — to be an "absurd result." Wood said, "Plaintiffs are suggesting an award that is more money than the entire music recording industry has made since Edison's invention of the phonograph in 1877."

On March 8 the hackers of Anonymous took credit for driving BMI.com off the Internet temporarily. A March 9 BMI "Service Interrupt Update" stated the company was "making every effort" to restore the site. Although service was indeed restored at the time, the next day the site was inaccessible. An Anonymous press release said, "We have seen BMI consistently legislate copyright and consequently have decided to take action to show the people will not stand for its crimes against the public.... We do not forgive, we do not forget, you should have expected us." BMI's statement described taking its site offline as a protective measure, while denial-of-service attacks continued, to prevent the organization's content security from being breached.

The operator of one of the sites seized by federal authorities shortly before Super Bowl XLV was arrested on March 3 by U.S. Immigration and Customs Enforcement agents and charged with a single count of criminal copyright infringement. Bryan McCarthy, a 32-year-old Texan, registered Channelsurfing.net in 2005 and operated the site from his home, gaining more than $90,000 from online advertisers. His extremely popular site linked to video streams of numerous copyright-protected sports telecasts, and since its Feb. 1 seizure by ICE the site has received more than 1.3 million hits from Internet users.

On March 9 Republican efforts to block the Federal Communications Commission's Net neutrality rules took one step forward and one step back. The backward step? When the Senate failed to pass either of two competing continuing resolutions on the budget, legislative language defunding FCC Net neutrality regulatory authority died along with its Republican-sponsored appropriations bill. The forward step? The House Energy & Commerce Committee's Subcommittee on Communications and Technology held a hearing on H.J. Res. 37 — disapproving and nullifying the FCC's rules — and then approved the joint resolution, passing it to the full committee. With unified Republican support, it is expected to pass both the Commerce Committee and the full House, however it is expected to die in the Senate due to lack of Democratic support. Republicans believe they are protecting the Internet from burdensome and unnecessary regulation, but Net neutrality advocates believe services and applications such as Netflix could be discriminated against by network operators unless their right to be online is clearly protected.

President Barack Obama announced his nomination of Department of Commerce Secretary Gary F. Locke as the next U.S. Ambassador to China on March 9 — a selection that was swiftly and widely praised. MPAA President/COO Bob Pisano said, "[Secretary Locke] has…an outstanding record of championing intellectual property rights. As ambassador to China, he will be an important advocate in a nation where the theft and illegal distribution of American movies, television shows, music, software, and other forms of intellectual property is a major threat to American competitiveness." Calling attention to the fun coincidence of Locke's Chinese ancestry, President Obama said, "More than 100 years ago, Gary's grandfather left China on a steamship bound for America, where he worked as a domestic servant in Washington state. A century later, his grandson will return to China as America's top diplomat." The nomination must be confirmed by the Senate.

On March 4 members of the Congressional International Antipiracy Caucus wrote to Vice President Joe Biden encouraging him to pressure Russia to crack down on IP rights violators during his visit to Moscow. In separate and somewhat unsettling news, on March 7 Billboard.biz reported that accusations of irregularities in the selection process caused Russian regulators to withdraw accreditation from royalty collection societies and to disband the agency that previously granted such accreditations. Universal Music Russia General Director Dmitry Konnov said, "I know that some radio stations have stopped paying royalties, taking advantage of this uncertain situation."