Judge Tosses Out RIAA's First File-Sharing Conviction, Thomas Granted New Trial!

US District Judge Michael Davis formally agrees that "making available" theory is flawed, also implores Congress to prevent excessive damage awards like the $222,000 She was ordered to pay for a measly 24 songs.

There's the smell of blood in the water over at RIAA headquarters this morning with word that their legal team suffered a dramatic setback today, one that dramatically raises the standards for proving copyright infringement.

In the case of Jammie Thomas, the first person ever to be convicted of illegal file-sharing, US District Judge Michael Davis said he erred in instructing the jury that simply making music available in KaZaA's "shared folder" was the same as copyright infringement, and that his error "substantially prejudiced" her rights. He also implored Congress to reform copyright law to prevent similarly "oppressive" awards in music file-sharing cases.

"The Court does not condone Thomas' actions, but it would be a farce to say that a single mother's acts of using Kazaa are the equivalent, for example, to the acts of global financial firms illegally infringing on copyrights in order to profit in the securities market," Judge Davis wrote in his opinion.

Based on the judge's instructions, jurors later found her guilty of having some 24 songs in KaZaA's shared folder and set damages of $9,250 for each.

But in May, after a series of federal court rulings, Davis notified attorneys in the case that he may have made a "manifest error of law" when he instructed the jury that simply making the songs available for sharing could be considered illegal distribution, even without proof that anyone actually downloaded them.

"Merely because the defendant has 'completed all the steps necessary for distribution' does not necessarily mean that a distribution has actually occurred," wrote Judge Nancy Gertner in London-Sire v. Doe. "It is a 'distribution" that the statute plainly requires."

Attorneys for the industry argued in a hearing last month that they showed proof that the songs were downloaded - by recording industry investigators. Thomas' attorney countered that downloads by investigators authorized by the industry to receive them do not constitute copyright infringement.

Copyright-law guru Bill Patry pointed out that "...authorized conduct cannot be unauthorized conduct, and since the only evidence of actual distribution (if that is what the downloading is) was authorized, there could be no infringement."

Simply put, you can't authorize somebody to download copyrighted material and then charge the person who gave it to them with unauthorized distribution since the copyright holder in fact authorized it (Logic 101).

Ray Beckerman of Recording Industry vs the People, a recent RIAA target himself, has posted the Judge Davis's call for Congressional action to address excessive copyright damages. If you recall, it was Beckerman who also pointed out a few months ago that compensatory damages greater than 9 to 1 violates the Due Process Clause of the 14th amendment. The Supreme Court has previously ruled that "compensatory damages are intended to redress a plaintiff’s concrete loss" which in this case is a mere 35 cents - 70 cents minus 35 saved for not having to distribute it - per each illegally downloaded song. At most 10:1 makes its a grand total of $3.50 for each song and not $9250. 

From Judge Davis's opinion:

Need for Congressional Action

The Court would be remiss if it did not take this opportunity to implore Congress to amend the Copyright Act to address liability and damages in peer to peer network cases such as the one currently before this Court. The Court begins its analysis by recognizing the unique nature of this case. The defendant is an individual, a consumer. She is not a business. She sought no profit from her acts. The myriad of copyright cases cited by Plaintiffs and the Government, in which courts upheld large statutory damages awards far above the minimum, have limited relevance in this case. All of the cited cases involve corporate or business defendants and seek to deter future illegal commercial conduct. The parties point to no case in which large statutory damages were applied to a party who did not infringe in search of commercial gain.

The statutory damages awarded against Thomas are not a deterrent against those who pirate music in order to profit. Thomas’s conduct was motivated by her desire to obtain the copyrighted music for her own use. The Court does not condone Thomas’s actions, but it would be a farce to say that a single mother’s acts of using Kazaa are the equivalent, for example, to the acts of global financial firms illegally infringing on copyrights in order to profit in the securities market. Cf. Lowry’s Reports, Inc. v. Legg Mason, Inc., 271 F. Supp. 2d 42 737, 741, 42 (D. Md. 2003) (describing defendants as a “global financial services firm” and a corporation that brokers securities).

While the Court does not discount Plaintiffs’ claim that, cumulatively, illegal downloading has far‐reaching effects on their businesses, the damages awarded in this case are wholly disproportionate to the damages suffered by Plaintiffs. Thomas allegedly infringed on the copyrights of 24 songs the equivalent of approximately three CDs, costing less than $54, and yet the total damages awarded is $222,000 – more than five hundred times the cost of buying 24 separate CDs and more than four thousand times the cost of three CDs. While the Copyright Act was intended to permit statutory damages that are larger than the simple cost of the infringed works in order to make infringing a far less attractive alternative than legitimately purchasing the songs, surely damages that are more than one hundred times the cost of the works would serve as a sufficient
deterrent.

Thomas not only gained no profits from her alleged illegal activities, she sought no profits. Part of the justification for large statutory damages awards in copyright cases is to deter actors by ensuring that the possible penalty for infringing substantially outweighs the potential gain from infringing. In the case of commercial actors, the potential gain in revenues is enormous and enticing to potential infringers. In the case of individuals who
infringe by using peer-to-peer networks, the potential gain from infringement is access to free music, not the possibility of hundreds of thousands – or even millions – of dollars in profits. This fact means that statutory damages awards of hundreds of thousands of dollars is certainly far greater than necessary to accomplish Congress’s goal of deterrence.

Unfortunately, by using Kazaa, Thomas acted like countless other Internet users. Her alleged acts were illegal, but common. Her status as a consumer who was not seeking to harm her competitors or make a profit does not excuse her behavior. But it does make the award of hundreds of thousands of dollars in damages unprecedented and oppressive.

Finally we have a judge who clearly expresses what many of us have had argued all along, that file-sharers aren't out to profit from their activities as copyright statutes were initially intended to address.

"Part of the justification for large statutory damages awards in copyright cases is to deter actors by ensuring that the possible penalty for infringing substantially outweighs the potential gain from infringing," Judge Davis writes.

But, when it comes to illegal file-sharing the gain is free music in the tens or perhaps hundreds of dollars. Damages of $10,000 or more for each individual song is not a simple deterrence, it is instead "unprecedented and oppressive."

Bravo Judge Davis. This a win against the RIAA us file-sharers will be able to savor for quite some time.

Stay tuned.