As part of the ever-increasing attention being given to the RIAA filesharing case of Sony BMG Music v. Tenenbaum (see the witness list post from a few days ago), Harvard Law Professor Charles Nesson wrote a great, quick essay in the Mass High Tech journal, explaining his reasoning for having the case dismissed.
Joel Tenenbaum, who was a teenager at the time of the alleged copyright infringements, is being sued for downloading seven songs seven years ago from KaZaA, a file-sharing network composed of millions of his peers doing likewise. The RIAA will seek to prove that Joel downloaded those songs “willfully” and must therefore pay up to $1,050,000. Joel has already been interrogated by the RIAA for nine hours in a forced deposition; been made to endure the depositions of his mother, father, sister and friends; and may be compelled to submit his current computer, which is not even the machine on which the original copyright infringement was alleged to occur, to a RIAA-retained third party for complete imaging and forensic analysis. All this for the alleged download of seven songs.
We believe, and are asserting legally by counterclaim, that the RIAA litigation campaign against Joel and the millions of his generation like him is an unconstitutional abuse of law.
The center of their argument is quite plain and clear: the RIAA is abusing the statutory penalties in copyright law in order to call each and every download a “willful copyright infringement” worthy of the maximum fine: $150,000. That is what brings Nesson to the >$1M figure above.
The problem with this tactic is multifold; for one, this is nowhere near the actual damage suffered by an artist or the record labels. In fact, very few artists could claim a figure near that for the aggregate of losses suffered by the act filesharing. What’s more, as an oft-cited four-year-old NYT article puts it, you cannot draw a 1:1 ratio between downloaded files and lost sales. Not only are people downloading tracks they would never buy, thanks to the lowered burdens of downloading, many have suggested they will use peer-to-peer as a “try before you buy” method to dictate their musical purchases (though fewer actually practice this method). Given the fact that almost every lawsuit served by the RIAA is followed up with a settlement letter for less than one hundreth of the claimed damages (an offered settlement of $3000 for a claim of over $1,000,000 is frequently reported), it seems almost painfully obvious that the RIAA is using the legal system to terrify college students into having their parents pay up a few thousand dollars, probably a drop in the bucket compared to their kid’s tuition, to make this potential legal hassle go away. The RIAA is preying on the unique nature of college students – being in a new environment already very stress-inducing, having access to high speed Internet for the first time, having slightly more discretionary income than they will have again for years, and dealing with the transition from childhood to adulthood – to milk out money offsetting declining CD sales. They have done this thousands of times, and will likely do it again, and against that Nesson and his crew seem to be directing the brunt of their attack.
Underneath this argument is a much larger policy issue, however. If the purpose of copyright is to encourage creative contributions in the arts and sciences, and the penalties are purportedly in place to give creators protection from abuses of their works, how can one find economic incentive in filesharing lawsuits given the fact that, in the overwhelming majority of professional music contracts, musicians see few royalties from CD sales? Typically, when you sign into a major label deal, you give up all royalty interest in the sound recordings (even if you recorded it yourself without the label’s help), and sometimes the label even takes a sizable stake in the underlying composition, even though they did not write the song (this is done with a controlled composition clause). If the song is a cover, the artist would see none of this money either way. Shadowing above all of this is the terrible advance/recoup method of funding recordings, which makes it so even Gold Record artists are not seeing any money from CD sales.
Artists are okay with this, or at least they do not put up so much of a fight as to deny this Faustian bargain, because of the other perks one gets as a major artist. Far more lucrative than the remaing royalties from sales, there are synchronization licenses with films, TV, commercials, and other deals, not to mention the somehow-still-lucrative world of live performance. One area an artist normally controls most or all of his or her royalties around, interestingly enough, is merchandise, so while buying the CD of an artist helps him or her marginally, buying the T-shirt actually helps rather substantially. So, with that in mind, how can we say that giving statutory damages to filesharing activity helps the artist create, when an artist would see pennies of that revenue were the song purchased or downloaded legally? It’s also worth nothing that, while to date the RIAA has collected thousands upon thousands of dollars from these filesharing lawsuits, not one artist is reporting any money paid out from this pool.
I’ll try and give updates to this story as best as I can, but I have my own legal quagmire (exams) to deal with at the moment. For more head over to Ray Beckerman’s Recording Industry vs. The People.