The Times They Are A-Changing? – US Student ordered to pay £400,000 to Record Labels for Illegal Downloading

In a sign that the Music Industry is becoming more and more willing to take action against individuals and “soft” targets in the fight to curtail illegal downloading, a US Student has been ordered to pay over £400,000 in damages to four different record companies for downloading and sharing just 30 songs in the second case between the Recording Industry and an individual to actually reach a trial.

In a significant move, the Federal Jury awarded Joel Tenenbaum, a student at Boston University, to pay $22,500 for each of the 30 songs on which the case was based, which included tracks by artists such as Green Day, Nirvana and the Smashing Pumpkins, rather than the maximum $150,000 per song in cases where “wilful” infringement can be shown or the $30,000 per song damages figure to which the labels are usually entitled.

This is an American case and as such it’s easy to dismiss it as another example of an overly litigious approach by the US Music Industry to sue its own audience, which has at times resulted in a public relations disaster that has led them to being working with Internet Service Providers to deal with the problem and not filing any new claims in this area since 2007. However, in the wake of the Digital Britain report and moves by the Entertainment Industry to take similar tougher action in the UK, this judgment may well be indicative of the shape of things to come.

Copyright Law in the US is significantly different than in the UK, with a defence of “fair use” (similar to our “fair dealing” provisions), which allows a copyright-protected work to be used for certain purposes such as non-profit educational use, use not of a commercial nature and a number of other exceptions dependent upon the “character” of how the work is used. Even so, when a US court considers fair use, it does have to consider the prupose and character of the use in question as well as the effect of that use upon the market for that work.

Tenenbaum’s lawyer was not permitted to argue fair use in this case and it’s arguable that if he was, he could have convinced the Jury that these 30 songs being shared by one person would not have had a major effect upon the music industry as a whole. He also asked for the Jury to award damages of 99 cents for each song, which would have been the price he would have paid for them had he downloaded them legally.

However, Tenenbaum admitted actually downloading over 800 songs over a 10 year period and was referred to by Lawyers for the four record labels who brought the case as a “hard-core, habitual infringer.”

This case follows the recent and equally high-profile trial of Jammie Thomas-Rassett in June which saw the mother of four ordered to pay $1.92 million in damages to six record labels after downloading 24 songs. You could argue that this wouldn’t happen here, but it should be borne in mind that the maximum fine for criminal copyright infringement in the UK has now been raised from £5,000 to £50,000 and Record Labels are continuing to suggest that action will now be taken against “softer” targets such as students and teenagers to drive their deterrent home.

Under UK law, we’d have to look at similar issues to the US cases. Here, it is an infringement of copyright to copy a song via a P2P file-sharing service onto your computer but it’s also an infringement to make a copy available to the public via uploading it for other users to copy from you. This is the major issue behind illegal downloading; people sharing their entire record collections with the world in such a way as to prevent record companies charging for them. Either way, copyright infringement is punishable by the Civil courts through claims being brought by Copyright Owners but it’s also a criminal offence punishable by an unlimited fine.

Previous cases in the UK have seen very large-scale downloaders punished, but so far the Music Industry has refrained from going after users who have copied a smaller amount of material. Without Government intervention (which hasn’t been forthcoming so far) the only way for the BPI or record labels to really make their point would be to sue downloaders individually, which would lead to huge legal costs and most likely see the Courts flooded with similar claims. It’s also not straightforward to prove exactly who downloaded illegally when a number of people use the same computer.

Perhaps the main issue, however, is that Tenenbaum has said that he’ll petition for Bankruptcy if the verdict stands as he simply can’t pay the damages. This is the major problem for the Music Industry. Copyright cases are usually expensive for a Record Label to litigate and there’s no guarantee that a “man in the street” would be able to pay the Claimant’s costs if a claim came before the Civil Courts, or even a fine in the Criminal Courts, potentially leading to a number of phyrric victories which will almost certainly generate a huge amount of bad publicity in exchange for creating a deterrent which will take some time to filter through into the public consciousness.

Even so, it’s probably only a matter of time before the first major deterrent case against an individual filesharer in the UK. It’s very doubtful that a UK Court would ever award such a huge amount in damages as has been the case in the US, mainly because our system would value the damages payable for each song at the sale price charged for it and then consider the number of times it has been copied to come up with a figure. It’s a fairly safe bet that the Royal Courts of Justice won’t award £50 to 60,000 for a song which could be purchased via iTunes for around 80p. Any criminal penalties, though, could be very severe if prosecutions are brought after the proposed raising of the maximum fine.

Until the public gets the message that copyright infringement is harming the entertainment industry and that illegal downloading is wrong, then this kind of case will start to become common in the UK. The public are understandably sceptical of the industry’s motives and it’s very fair to say that record labels must shoulder a lot of the blame by failing to make as much material available for legal downloading as they could and working to archaic business models which sees them sometimes charge over the odds for a CD, but the fact is that for the time being at least, the law is the law and ignorance is no excuse.

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