In the time that my work and social life have continued, very little has happened in court.  Where we left it, the appeals court had overturned (former) Judge Gertner’s reduction to $67,500, reinstating the original cartoonish fine of $675,000 and remanding the district court to go through the remittitur process.  Remittitur is a Common Law practice where the presiding judge may adjust the damages without doing so on constitutional grounds.  The irony is that (former) Judge Gertner’s decision to grant a reduction on constitutional grounds may have been done deliberately to avoid a remittitur, which gives the RIAA the option for a new trial.  In the Jamie Thomas-Rasset case, following a remittitur, the RIAA opted for a new trial, which Gertner may have been intentionally trying to stay away from.

In either event, following Gertner’s retirement a new judge has been put on the case who knows only what he’s read, we’ve withdrawn our motion for remittitur, which the RIAA objected to the first place, and so we have the absurd situation of no one wanting to push the case through remittitur except for the legal system itself!  We’ve made arguments that because the original damages award violates due process, the award should be put aside by the court in favor of one that is just, but without the option from the RIAA of selecting a new trial (our briefs can be read here).

We have also petitioned the Supreme Court to hear our case.

So it’s not over.  The justice system still has the opportunity to restore sanity. And I think it will do that.  There’s too much history in this country of the legal system eventually fixing its mistakes, according an even justice in the face of contorted laws, of reconciling the balance between harm and damages.

So where is the case now?  As always, waiting.  Where am I now? Interviewing for jobs.

As you may recall, a jury in 2009 decided that I should pay $675,000, or $22,500 per song, for making songs available on KaZaA in the early 2000s.

Post-trial, we filed a motion asking Judge Gertner to reduce the damages amount to something less excessive — and something not as outrageously unconstitutional as nearly a quarter of a million dollars.  Just as a point of reference, Joseph Hazelwood, the captain of the Exxon Valdez during its 1989 oil spill, drunk at the time of the accident, was fined $50,000. George Harrison, sued for plagiarism of his hit single ‘My Sweet Lord,’ was fined just $587,000.00.

Judge Gertner, agreeing that nearly three quarters of a million dollars was absurd, reduced the damages to $67,500.

The recent decision by the appeals court has reinstated the jury’s verdict, effectively dismissing Judge Gertner’s opinion as a seasoned and experienced judge.

As a graduate student, neither $67,500 nor $675,000 is affordable to me. But the fight is far from over. This case is as much about what happens in the courtroom as it is about bringing the issue to the forefront.

I’m glad and grateful for all the support I’ve gotten from my family, friends, Professor Nesson, Fern, Debbie, Jason, all the students who’ve worked on the case, and you, for your thoughtful comments.

–Joel

Click the link to read more.

p.s. query as to whether joel could be sued for downloading the songs from the google.cn site using VPN ??

After a first day that was full of panels focused mostly on the business aspects of the music crisis, today the lawyers gave their views on the problems facing the music industry. With cleverly named sessions like “The Current State of Copyright Law,” and “The Future of Copyright Law,” and with preeminent copyright thinkers like Terry Fisher, Larry Lessig, Google’s Fred von Lohmann, and many more taking to the stage, it was a pretty great day to be thinking about copyright law in the digital age.

There were many themes that were repeated by people of all different perspectives, but it became clear to me that the one change in the law that will solve the most problems in the simplest way is reform of statutory damages. As I mentioned in my preview post, I have a strong personal interest in this particular issue, but even I was surprised at how the specter of statutory damages lurked menacingly in the background of almost every discussion. The remedy has to be changed, and it is the one change that is simple enough that it seems genuinely within reach. The best way to see why is for to me to briefly explain the current statutory damages regime, quickly articulate the three most pressing Big Problems that I saw, and then show why statutory damages reform would go a long way to solving many of them.

Here’s the current scheme in a nutshell. The Copyright Act has two ways that plaintiffs can recover damages in a case of infringement. The first way is the way plaintiffs recover in almost every other civil case: a copyright holder can recover his actual damages and lost profits. But there is also a unique second measure of damages that plaintiffs can recover instead: something called “statutory damages” that can range from $750 to $150,000 per work infringed, constrained only by what a judge or jury “considers just.” There are currently several major fights about just how far such damages can go, like whether you can recover over $600,000 against a regular filesharer who earned no profits and caused no measurable harm, or whether you can recover damages that run into the trillions against the operator of LimeWire. But even if there are some limits in the most extreme cases, the threat of astronomical damages, even when a copyright holder has not shown that infringement has caused him any harm at all, is a very scary prospect. With that in mind, let me turn to the Big Problems.

Big Problem 1 has to do with the difficulty of collective licensing for entrepreneurs. Multiple panelists noted that, even if an innovator could obtain licenses from many copyright holders, there will inevitably be holdouts who don’t want to license even on what many would think to be reasonable terms; one entrepreneur compared the process of negotiating licenses in this space with herding cats. The holdout problem is critical, because, as I wrote after Day 1, the new generation of music services can only really be successful if they offer an incredible abundance of music. Not many people want to pay for a service that only features music from one or two record labels.

There are lots of hard, complicated ways to fix this specific problem, but notice that getting rid of onerous statutory damages also solves it. That’s because, if a plaintiff were instead entitled to something that reasonably tracks the harm he suffered (i.e. a reasonable royalty) in cases of good faith infringement by entrepreneurs trying to develop new business models — instead of an arbitrary amount of up to $150,000 per work — then negotiating licenses would all of a sudden be much easier: an owner either licenses his content, or leaves it to a judge to figure out the harm after-the-fact. This scheme makes the prospect of innovation much more appealing. All of a sudden, there’s a real incentive for copyright holders to license widely, and, conversely, companies don’t go bankrupt if they make good-faith efforts to comply with copyright in the service of business models that try to grow the pie for everyone (companies that look more like “pirates” could be subjected to much more severe damages). Big Problem 1 looks like not as big of a problem.

Big Problem 2 is what to do about so-called “orphan works.” Orphan works are songs that are in-copyright but whose owners are hard to track down (this problem also rears its head powerfully in the case of Google Books). In the current regime, it’s an enormous risk to use that song without permission, because someone could come out of the woodwork at any point and sue you for massive damages. Even people who make documentaries for public broadcasting aren’t immune from this threat: we heard over and over that basically every producer of documentaries, whether for-profit or not, either gets a song affirmatively cleared or doesn’t use it. If you can’t track down the owner, you just can’t use it, even if the chances of actually being sued are remote and the harm caused would be exceedingly minimal. This problem will only get harder beginning in 2013, when a very complex scheme kicks in that allows original creators to regain their copyrights even if the creators signed them away many years ago. This will further muddy the already swamp-like waters of copyright ownership.

Again, reforming damages solves this problem. No longer would it be an enormous risk to use an orphan work; if the copyright holder steps up at some later date, he can just be paid a reasonable rate — which is what the entrepreneur or documentary producer would have wanted to pay anyway, if only the owner were easier to find. This also gives an owner more incentive to make sure that there are accurate, public records of her copyrights, rather than hanging back and suing. Again, problem solved with damage reform.

Finally, Big Problem 3 is the meta-problem of reforming copyright to reflect new technologies and uses of music. As one panelist described this morning, the Copyright Act wen through a major, comprehensive revision in 1976, and for a few years people thought they had finally “solved” copyright. And then the personal computer and the CD and the Internet were invented; the Act now looks about as out-of-date as a traffic law that governs horse and buggies. This has lead people to propose all kinds of specific reforms, from the creation of alternative compensation schemes to reintroducing copyright formalities to adding a public performance right for sound recordings broadcast on terrestrial radio (though I don’t know still listens to FM radio these days). The list goes on.

Many of these are great ideas, but, again, reforming damages is a way to change the Copyright Act that is genuinely technology-neutral. No matter what technologies emerge over the next 10, 20, or 30 years, the general principle that good-faith innovators and average consumers should not be subjected to damages that are wildly out of proportion to any conceivable amount of financial damage their infringement causes is sound. It is tried and tested: it is the principle we use in essentially every other area of civil law. It will allow innovators to innovate and consumers to consume. It will lower the number of billion-dollar, high-stakes lawsuits and increase the number of people who sit down to the negotiating table to deliver consumers music in a way that makes sense for everyone. That sounds good to me, no matter what we might want to do to the rest of Title 17 of the United States Code in the coming decades.

Thanks to all who participated in the conference for a stimulating two days, thanks to the readers who have commented on these posts, and thanks to the organizers and specifically Professor Fisher for allowing this lowly law student to attend.

I took in a pretty full day of panels at Day 1 of the Rethink Music conference (my preview post from last night is here). While tomorrow’s lineup promises lots of great stuff on copyright law and policy, today’s schedule was pretty business-oriented. As such, I’ll hold off my explicitly legal analysis until tomorrow night. For now, I want to answer a question that was asked at pretty much every panel: what’s the value of a song in today’s online environment?

The short answer: zero. A single song is worthless — but that’s not a bad thing. Let me explain.

There was much consternation among the audience and many of the panelists — specifically, the ones who work for the large institutional players in the music industry — that there is an entire generation that doesn’t understand the “value” of pieces of recorded music. They lamented that music has been chopped up into $.99 individual songs, $9.99 digital albums, or, even worse, subscription services like MOG that offer on-demand access to large libraries of music — though with many unfortunate limitations, as explained below — for $10 a month. Referring to these service, one audience member asked in dismay: “does that mean that a song is now worth 1/100th of a cent?”

Well, no: actually, it’s worth less than that. I’m happy to report that in 2011, individual songs have become worthless to me and many in my generation. That’s because pretty much every song is available anywhere, any time, for free, either streaming on YouTube or Grooveshark, or for unauthorized download on a filesharing site — indeed, most songs are available in all three places.

But it doesn’t follow from this that no one will pay for recorded music online; far from it. I can’t know for sure, but I believe that the true value of recorded music lies in abundance, and I believe that people will pay for abundance. Indeed, abundance is why I pay for unlimited high-speed Internet access. I don’t place any value on individual tweets, or individual photos I upload to Facebook, or searches for hotels for a possible trip to Toronto. Instead, because those things are free, I swim in a sea of tweets and photos and travel searches, and I leave it to those sites to monetize my abundant usage. To use another example that is admittedly somewhat different from the case of music, I don’t really know what value I place on a rerun of Seinfeld on TBS, or a new Colbert Report on Comedy Central, or an episode of Mad Men on AMC. I suppose in theory there is a value, but no one thinks of things that way. What we really value about cable is abundant access to oceans of content — most of it bad, some of it great — and that’s why we pay for cable and DVRs that let us watch as much of it as we want, whenever we’re in the mood.

Back to music in 2011. I place a very high value on abundant access to downloadable, freely transferable music, that I can play however I want, whenever I want, in whatever software I want, on whatever device I want. That is because I value abundance, and, unlike video, I value the freedom to consume music in ways that I want, not in many of the overly restrictive ways that record companies want. I would pay a lot of money for that, but no one yet offers it. Services like MOG, which require users to stream from proprietary software either online or on portable devices, and don’t allow direct downloads of any MP3s, are so close yet so far. MOG is interesting, and the founder clearly knows what he’s doing and has good ideas, but this service does not yet offer what people like me value (I don’t just mean this figuratively; I did the free trial, and decided not to become a subscriber). I value being able to play my music library in iTunes, or to set a song to a slideshow of my pictures, or to play it in my iPhone’s terrific native music player, and, though I’m not a professional musician, I also value being able to occasionally edit the songs for personal, fair uses. MOG lets me do none of these. It’s objectively true that, nearly 12 years after Napster’s introduction, illegal filesharing sites still offer the best online product there is: they combine the unrestricted uses of mp3s sold on iTunes or Amazon with the attitude of abundant access that MOG has. Make that combination legal, show me where to send my monthly fee, and I’ll be the first to sign-up — and I don’t think I’d be the only one.

There was some discussion at one of the afternoon panels about why the current generation of all-you-can-eat, on-demand services like MOG have not really taken off yet. It seems to me that the reason this has not happened is not a failure of marketing nor of “consumer education,” one of the day’s favorite phrases. It is because they do not yet fit perfectly with what consumers value. When that finally happens, I have a feeling the services that provide what I describe above will be quite popular with not just consumers but also with artists — because artists will finally reap the benefits of the public happily paying to be a part of the remarkable abundance of recorded music that so many have worked so hard and long to produce.

For the next two days, this Humble Contributor will be attending a conference called “Rethink Music.” It promises two days of fascinating dialogue about the future of the music industry among artists, entrepreneurs, record company executives, lawyers, policymakers, academics, and students. Harvard’s Berkman Center has posted a great briefing book and a nice series of podcasts leading up to the event, and I figured I’d add my two cents about what I’d like to see over the next few days. I’ll be writing entries after the day’s events both Tuesday and Wednesday with my reactions.

I have a dog in this fight. For the last two years, I have had the privilege of being on the team of students that represents Joel Tenenbaum, a Ph.D. student who was sued for copyright infringement for sharing songs on KaZaA, which is a now-defunct but once extremely popular filesharing network. The industry settled with the overwhelming majority of defendants it sued, but Joel refused and became one of only two people to go trial. He lost, but the damages set by the jury were reduced by the trial judge, and his case is now awaiting a decision in the First Circuit. So, legally, I am directly adverse to the interests of America’s largest record companies and their trade group, the Recording Industry Association of America (RIAA).

But, from a long-term perspective, I’d like to think that I am not adverse to their interests at all. I love music. I want lots of people to make a lot of money in the music business — including the record labels. I want as many people as possible to have legal access, from everywhere, to the earth-shattering abundance of recorded music that exists online, and I want artists and engineers and record companies to be reasonably compensated. I really do.

To me, then, the most important panel of tomorrow’s schedule, and probably of the entire conference, is one called “Models — Access and ‘in the cloud.’” The panel features participants from technology companies and from the recording industry. What I am desperately hoping for is for someone who represents the interests of the copyright holders to say the following: When it comes to uploading music into the cloud for remote playback (see Amazon’s new cloud player for the prime example of this new and critically important product), our view is that X is clearly legal, and Y is clearly not; in other words, you do not need a license from us to do X, and you do for Y. At this point, I don’t even much care what the content of their legal theory is: I just want them to articulate one in a straightforward way. To this point, as far as I can tell, the industry has provided no public guidance to innovators as to what their view of important and difficult questions of copyright are. This is crucial, because the massive statutory damages provided by the Copyright Act can bankrupt a company if an innovator falls even just slightly on the wrong side of the line.

Unfortunately, there are already ominous signs that no meaningful assistance from the industry is in the offing this week. In a short and somewhat perplexing white paper written for the Conference, RIAA President Cary Sherman and co-author Jonathan Potter provided what amounts to the polar opposite of guidance: a four-page paper that does little more than put people on notice about just how many legal hurdles there may be in implementing a cloud-based service. The heart of the document is a list of fifty (I counted!) difficult legal questions raised by the emergence of cloud-based services. After that lengthy list, the paper concludes abruptly with the near-surreal statement that the “challenge” in developing such services will be to negotiate licenses quickly so that “legal uncertainties do not delay introduction or impede success of exciting new offerings.” Given that the paper goes a long way toward highlighting just how many legal uncertainties there are in this area and gives no hint as to the RIAA’s view on any of these fifty legal questions — and, accordingly, whether they will immediately sue you for engaging in what they view as infringing conduct — that will prove to be a mighty challenge indeed for anyone looking to innovate.

Yet I am optimistic that we will begin to bring certainty to this area and come to consensus around some of these fifty hard questions, for the benefit of everyone. The conference claims that it is “solutions-focused,” so perhaps tomorrow we will move from the realm of raising hard questions to at least the beginnings of a few answers. After all, what’s the point of coming all the way to Boston just to tell everyone how interesting and complicated these issues are?

Listen to the audio file of the hearing here.

Also:

• First person narrative of the hearing by “Joel Sage,” a Massachusetts attorney, copyright law aficionado, and sometimes photographer at Legally Sociable.
• Coverage by the Boston Globe, Boston Herald, Computer World, and Torrent Freak.