RIAA P2P Trial Win Scrapped by Judge Who Asks Congress for Reform

Jurors didn’t indicate in their verdict whether they thought Jammie Thomas actually distributed files, rather than simply making them available, so Thomas’s loss must be overturned, Davis said in the 44-page decision. But he didn’t let Thomas off the hook for MediaSentry’s downloading. Her work in copying music to a shared folder with “easy” network access would count as “more substantial participation” in infringement than retail-store employees who “merely assisted” an undercover investigator in duplicating cassette tapes, the subject of an 8th Circuit case on direct infringement, RCA/Ariola v. Thomas & Grayston, Davis said.

What Congress chose not to say in the Copyright Act is revealing, and it supports Thomas’s contention that making songs available isn’t itself infringing, Davis said. Congress elsewhere has defined the offer to distribute as inherently infringing, Davis said, citing Copyright Act section 506 on protection for semiconductor chips. Section 115 defines distribution as a copyright owner “permanently parting” with his possession of a phonorecord, implying a physical transfer, Davis said. The absence of “offer” from section 106, relevant to P2P, is telling, he said. Davis rejected the RIAA’s argument that the definition of “distribute” for federal criminal law on child porn, which includes availability on a P2P network, applies to copyright. For one thing, there’s explicit liability for attempted distribution of child porn, he said. The Patent Act similarly is clear on infringement through “offers to sell” - - a change made by Congress only after courts required actual sale for patent infringement, Davis said.

The equivalence between “publication” and “distribution” that some see in the Copyright Act is illusory, Davis said. Publication includes “the offer to distribute,” but the Supreme Court has referred to the terms as separate rights in Harper & Row v. Nation, and the Copyright Act’s legislative history doesn’t conflate them, he said. The “authorization” right in section 106 simply provides a “statutory foundation for secondary liability,” Davis said, noting that the Grokster decision only held device makers liable for users’ “resulting acts of infringement.” The Supreme Court’s Tasini decision that placing electronic versions of print articles in a database without authorization is infringement -- considered one of the stronger precedents for the content industry (WID June 24 p2) -- is irrelevant, because the court in that case faulted only the actual “copying” of articles, Davis said.

Davis stuck to his guns that the 8th Circuit ruling in National Car Rental, a software-license case that originally caused his about-face in the Thomas trial, requires “actual dissemination” for a copyright violation to have occurred. The 4th Circuit’s Hotaling decision, which supported making- available in the context of a library card catalog, isn’t binding on the Duluth court or even persuasive, he said. The 4th Circuit was preoccupied with the impossibility of proving infringement if a library didn’t keep “records of public use,” but to prevail on such claims, copyright owners don’t have to provide “direct proof” of actual distribution, Davis said.

In a holding that may create trade problems for the U.S., Davis said section 106’s “clear congressional intent” trumps U.S. obligations in the World Intellectual Property Organization’s so-called Internet treaties. Those treaties explicitly recognize making-available, but the Copyright Act simply doesn’t implement the relevant provisions in those treaties, he said.

Davis didn’t take up Thomas’ appeal on grounds of excessive damages. But the judge made a plea to Congress to prevent such damage awards from recurring. The RIAA and those filing in support, including the Justice Department, could point only to infringement precedents involving corporate or business defendants. “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,” he said. The jury awarded the RIAA “more than four thousand times the cost of the three CDs” that Thomas allegedly infringed, far beyond any appropriate level of deterrence against downloading music. “Her acts were illegal, but common,” he said.

An RIAA spokesman said the “narrow issue” of making- available had no bearing on the jury’s decision that Thomas caused “significant harm to the music community.” After the trial some jurors were quoted in the media as saying they thought Thomas was lying about downloading from Kazaa. The RIAA has evidence of “actual distribution” as required by Davis, the spokesman said. “We are determining whether to directly appeal this decision or move forward with a re-trial and will make an appropriate decision soon.”

The Thomas case could leave the RIAA juggling two P2P trials. The group declined a federal judge’s suggestion in San Antonio that it settle with a defendant claiming “innocent infringement” for a reduced sum of $200 per work, instead going for a November trial in Maverick v. Harper to get $750 minimums (WID Sept 22 p5), though the parties could settle before then. The Thomas retrial hasn’t been scheduled.

A copyright lawyer predicted that the Davis reversal may actually help some owners’ enforcement efforts near term. Thomas Kirby of Wiley Rein, who represents Washington Internet Daily publisher Warren Communications News, gave us a note he shared with clients: “Even a highly motivated court [Davis] is unwilling to reduce massive statutory damages set by a jury within statutory limits. And it says that the potential for profit by business infringers is enough to justify very large awards.” Kirby noted that Davis favorably cited two of Kirby’s court wins, one for steep penalties against business infringers, the other for the propriety of investigators instigating infringement to create court evidence. Davis’s decision, though, “someday may prompt adverse legislation,” Kirby said.