ArtsWatch: Ruling: Reinstated

Labels' jury award of $675,000 against consumer file-sharer restored, but for how long?

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.

On Sept. 16 the First Circuit Court of Appeals vacated last year's U.S. District Court reduction of copyright infringement damages against Joel Tenenbaum from $675,000 to $67,500, criticizing the lower court's application of constitutional law as unnecessary. The case is now remanded back to the lower court judge with encouragement to practice constitutional avoidance and apply a common law remittitur process to propose a smaller award — a proposal that is likely to be rejected and lead to a new trial. The Electronic Frontier Foundation took note of the ruling's observation that "this case raises concerns about application of the Copyright Act that Congress may wish to examine" and that this is the second time a consumer file-sharing judge has encouraged legislators to re-examine statutory damages for consumer infringement. In reaction to the Court of Appeals' decision, defendant Tenenbaum said, "This is obviously more absurd than it was before." The jury that originally awarded the $675,000 to the labels did not consider it absurd, but multiple trials are bound to be frustrating. For example, the RIAA's recent appeal of the other major consumer file-sharing case against Jammie Thomas-Rasset could result in a third trial on the same set of facts.

A defendant sued for infringement by Righthaven and subsequently awarded court costs moved to seize the law firm's intellectual property assets over the weekend of Sept. 17. The firm was ordered to pay $34,045 last month but has not complied. The defendant has since incurred additional fees and is asking for the plaintiff that originally sued him to be held in contempt of court. Unsurprisingly, the firm's opponent in several cases, Electronic Frontier Foundation, viewed this as a copyright bully receiving a justified comeuppance. Separately, EFF called attention to another copyright infringement attorney who inspired an angry judge to describe his actions as "staggering chutzpah." Copyright law's statutory damages were intended to be large enough to deter infringement, so the image of clumsy counsel wielding its threat badly — to pressure quick settlements out of consumers — harms antipiracy efforts.

As published in the Federal Register on Sept. 22, the U.S. Trade Representative requested public comments to provide potential examples for the Special 301 Out-of-Cycle Review of Notorious Markets. Comments are due by Oct. 26. Last year's review was released on Feb. 28 and included physical markets along with a variety of online offenders, including Baidu, the Pirate Bay and Allofmp3.com clones. As explained in the request, "Notorious markets are those where counterfeit or pirated products are prevalent to such a degree that the market exemplifies the problem of marketplaces that deal in infringing goods and help sustain global piracy and counterfeiting." Although the list can be considered to provide targets for possible antipiracy enforcement, inclusion on the list does not represent an actual finding of illegality nor a formal federal analysis that enforcement is inadequate in a market's nation of origin.

Google Executive Chairman Eric Schmidt defended the company's competitive practices before the Senate Judiciary Committee's Subcommittee on Antitrust, Competition Policy and Consumer Rights on Sept. 21. While he got into a few verbal tangles with senators, the general consensus of news coverage was that Schmidt's testimony was free of flubs. Google has secured dominance in the search engine market and is continuously exploring other avenues of Internet business, with major investment capital at its disposal for acquisitions. Questions of fairness are bound to continue, whether in public or behind the regulatory scenes. Having led Google until recently as its CEO, Schmidt could find himself just as busy in his current position — protecting the company's flanks from unwanted regulation and ensuring Google makes timely adjustments to impress politicians and consumers that it is a "good" corporate giant.

Wireless microphone operators are among those encouraged to participate in a trial of Spectrum Bridge's TV White Spaces Database System. The trial began on Sept. 19 and will continue through Nov. 2. The Federal Communications Commission's announcement read, "During this trial, participants are encouraged to test the channel availability calculator; the cable headend and broadcast auxiliary temporary receive site registration utilities; and the wireless microphone registration utility to ensure that each of these elements of the database system is working properly and providing the interference protection required under our rules."

MP3.com founder Michael Robertson has launched a digital audio recorder for radio at DAR.fm. Similar to a DVR for radio, recorded programming can be downloaded and stored at his MP3tunes music locker service. "It's hard to imagine that the record labels are going to be excited about this," he said.

On Sept. 14 at the UK annual meeting of the Entertainment Retailers Association, the organization's Chairman Paul Quirk bemoaned the slow pace at which Britain's Digital Economy Act is moving toward actual enforcement. Quirk said, "The best information we have is that the first letters to suspected file-sharers will not be sent out until the second half of 2012 and disconnections of persistent pirates will not happen before 2013...This is unacceptable. We need action on Internet piracy and we need it now."