Constitutionality Of The Copyright Royalty Board To Finally Get Tested In Court

from the will-it-matter? dept

Last year, we noted that, it seemed clear that the Copyright Royalty Board was unconstitutional. This was due to a technical legal process change a few years ago (which also impacted the patent appeals board). Still, I noted that this probably wasn't a huge deal, because even if the CRB were found to be directed by improperly chosen judges, it would likely be "corrected" quickly by having the President (or a dept head) "reappoint" those same judges. Still, it's been odd that courts have been wary of addressing this issue. Earlier this summer two separate court rulings punted on the issue and refused to address it, instead focusing on other issues.

However, Live365 has now filed a lawsuit where this is the key issue, so hopefully a court will finally address it. Live365, of course, is at the mercy of the Copyright Royalty Board, and its ridiculous royalty rates, which make it nearly impossible to build a webstreaming business. Still, I'm not sure how much of an impact such a lawsuit can really have in the long run. As mentioned, even if it is found that the board is unconstitutional (which, a pretty plain reading of the Constitution suggests it is), it's not clear if anything really changes. The board will just get reappointed. At best this could throw out old CRB rulings. So it could be helpful to buy some time, but it's not clear if it addresses the underlying problem of why three old judges get to decide the business model of a bunch of companies.

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File Sharing, Damages And The Constitution...

from the getting-into-the-legal-weeds dept

Doug Lichtman is a well known intellectual property law professor who is a fairly big supporter of the copyright system. He's reached out to us, because of a podcast he recently recorded discussing the Joel Tenenbaum lawsuit. To be honest, I'd pretty much stopped covering anything to do with that lawsuit, because over the last couple of months, it's turned into something of a circus side-show, with both sides running around and making decisions as if they've never actually been in a court of law before. Even the judge has been making mistakes.

However, Lichtman specifically was hoping for the perspective of folks around here on the podcast, because (as he noted in his email), most of his listeners tend to be strongly pro-copyright, and he was hoping to at least find out what those of us less sure of the benefits of copyright think. To be honest, after listening to the podcast twice, it may be a bit too down in the legal weeds for many readers here -- though, if you really are interested in the legal specifics, have a listen. The first part involves Lichtman talking to Charles Nesson himself about the case, followed by three "legal experts" and then a guy from the RIAA who seems to honestly believe that the RIAA's lawsuit strategy was a success because it taught more people that file sharing was illegal. This is wrong on many different levels, since it clearly didn't impact user behavior, and has created other problems, such as the false belief in some that all file sharing is illegal (even of authorized content) and has framed the RIAA as being anti-consumer, making it that much harder for the major record labels to eventually make the shift in business models that are necessary to succeed these days.

The overall "conclusion" that Lichtman comes to is that Nesson and Tenenbaum are likely to lose the case, as precedent suggests that courts will likely find the statutory damages in the copyright act to be within the range of being constitutional. I actually agree that this is the likely outcome, though I find it, and the reasoning behind it, quite troubling. I also hope that, when (if) the case really goes to trial, Nesson has worked up a better argument than he gave on the podcast. While he does raise some good points, a lot of it feels like he only has a superficial understanding of both what's happening and the law itself. When really pressed on legal issues by Lichtman, he resorted to an emotional argument ("it's just a kid clicking on links!") which hardly is legally compelling.

However, in listening to the "experts," it sounds like it would be possible to make a more compelling case against the statutory rates by pointing out some rather simple facts: file sharing, in and of itself, creates no damage for artists -- and thus, the statutory rates have nothing to do with being a "remedy," but have everything to do with being punitive, which would make it a criminal issue, rather than a civil one.

Now, I can hear the copyright supporters (including Lichtman) shouting that it's ridiculous to claim that file sharing creates no damages for the artists -- but that's not what I said. I said, file sharing in and of itself creates no damage. And that's easily proven: just point to the increasingly large number of artists who have embraced file sharing on purpose and who have found that it's helped them earn more money. Then, what you realize is that file sharing combined with a bad business model may create damages, but those damages may be alleviated by putting in place a better business model (again, pointing to evidence of artists who have done exactly that). At that point, the "damages" have gone away. The fault is almost entirely on the part of the artist who picked a bad business model, and then did nothing to alleviate the problem when it became clear that the market was going in a different direction.

In that case, there's no actual evidence of damages, and it's difficult to see the constitutionality of charging someone $750, let alone $150,000, when there's no actual evidence of damages -- and the only actual "damage" may have been caused by the artist themselves by picking a bad business model.

Part of my problem with all of these discussions is that copyright supporters seem to automatically assume that file sharing must be bad -- but there's plenty of evidence to counter that, with artists' wide embrace of it (successfully in many cases) being exhibit A. If file sharing was really so damaging, there would be no such examples. But we see more and more every day. So it's not file sharing that's the problem. The real problem is a bad business model combined with file sharing. And it's rather ridiculous to fine Joel Tenenbaum (or anyone) because some record labels and musicians chose a bad business model.

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RIAA Asks For Sanctions Against Charles Nesson In Tenenbaum Suit

from the getting-nasty dept

I think it would be an understatement to say that the RIAA is rather unhappy with Charles Nesson and his team of folks from Harvard Law, challenging them on the constitutionality of the RIAA's "sue everyone" strategy. Recently, they've been battling over the right to broadcast the courtroom proceedings, and now the RIAA is asking for monetary sanctions against Nesson, claiming he violated certain procedural rules. The RIAA is likely seeking sanctions under section 11, which is used against lawyers who file lawsuits that are "unreasonable." In other words, this is starting to get personal.

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RIAA Really Does Not Want Live Broadcast Of Hearing In Tenenbaum Case

from the what-are-you-afraid-of? dept

It seems the RIAA is, once again, showing its true colors. When Charlie Nesson asked the court in the Tenebaum case to allow a live internet broadcast of a hearing to dismiss the case, the RIAA protested. This was odd, on its face, since the RIAA has insisted from the beginning that the reason for the campaign is educational. That was the point made by Judge Gertner in granting the request -- and she even pointed out how odd it was that the RIAA didn't want that to happen.

It turns out that the RIAA is so against the idea that it's gone and asked an appeals court to overturn the ruling, which even has entertainment industry lawyers who support the lawsuit strategy questioning the RIAA's move here. Of course, it's not surprising to find out that the RIAA has been misleading (at best) about its intentions with these lawsuits, but it is rather amusing at how hard they're fighting this, even knowing how it shows their hypocrisy.

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Judge Approves Public Broadcast Of RIAA Lawsuit

from the educate-us,-please dept

Harvard Law prof. Charlie Nesson has been leading a case challenging the constitutionality of a core part of the RIAA's continuing lawsuit strategy. Late last year, he asked a judge if the trial itself could be broadcast live over the internet, noting that the RIAA claimed the lawsuits were part of its education campaign, so he couldn't see why they would object. Of course, they did object, but the judge has sided with Nesson, and the court proceedings will be broadcast live next Thursday, January 22nd on the Berkman Center's website. The judge repeated Nesson's points in responding to the RIAA's objection, noting that the RIAA's objection seemed "curious" considering its previous claims of this being an educational campaign. Nesson and his law students had clearly done their homework on the judge. As the article notes, in 2007, the judge (Nancy Gertner) had testified on Capitol Hill on the importance of broadcasting more trials over the internet and television.

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Harvard Team Asks Court To Allow Live Broadcast Of Tenenbaum Case Against RIAA

from the should-be-fun dept

A bunch of folks have sent in the story that Charles Nesson of Harvard, who is challenging the constitutionality of the RIAA's lawsuits against file sharers, has filed a motion asking that the trial be broadcast live over the internet, amusingly using the RIAA's own words to support his request. From the beginning, the RIAA has always insisted that its lawsuits were part of a broad "educational campaign" to teach people about the evils of file sharing. Nesson notes that, if this is true, the RIAA should obviously have no objection to such a trial being broadcast online. Somehow, it seems likely that there will be an objection.

Given that the RIAA has supposedly given up its legal strategy -- while still moving forward with existing cases -- is anyone taking bets on how long it will be until the RIAA actively tries to back out of the Tenenbaum lawsuit altogether? This case is pretty much the last thing the RIAA actually wants to go to court -- whether broadcast or not. Even if it wins the case in the end, this lawsuit is going to involve a lot of dirty laundry airing that the RIAA probably doesn't want out there.

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Big Guns Come Out In Effort To Show RIAA's Lawsuits Are Unconstitutional

from the this-ought-to-be-worth-watching dept

People have been submitting this story nonstop, but I wanted to take some time to read the details before commenting on it. It's not the first time that folks have argued that the damages sought by the RIAA in various lawsuits against file sharers are unconstitutional. However, the few times it's been brought up in court, the arguments haven't been persuasive. However, this time around, it looks like the big legal guns are getting involved, and the argument seems a lot more comprehensive and compelling.

In the past, it's been noted that the RIAA has curiously avoided suing any Harvard students, with one of the theories being that Harvard had made it quite clear to the RIAA that it would fight back hard. And, with Harvard law school at its disposal, and various professors there indicating that they had serious legal problems with the RIAA's strategy, the RIAA simply decided to ignore any file sharing going on at that prestigious university.

However, for RIAA critic and well known law professor, Charles Nesson, waiting around for the RIAA to sue someone at Harvard was getting boring, so he went out and found a case to participate in. Along with two third year law students, Nesson has hit back hard on the RIAA's efforts in a court filing, where it's noted that the very basis for many of the RIAA's lawsuits is very likely unconstitutional.

He makes the argument that the Digital Theft Deterrence and Copyright Damages Improvement Act of 1999 is very much unconstitutional, in that its hefty fines for copyright infringement (misleadingly called "theft" in the title of the bill) show that the bill is effectively a criminal statute, yet for a civil crime. That's because it really focuses on punitive damages, rather than making private parties whole again. Even worse, it puts the act of enforcing the criminal statute in the hands of a private body (the RIAA) who uses it for profit motive in being able to get hefty fines:

Imagine a statute which, in the name of deterrence, provides for a $750 fine for each mile-per-hour that a driver exceeds the speed limit, with the fine escalating to $150,000 per mile over the limit if the driver knew he or she was speeding. Imagine that the fines are not publicized, and most drivers do not know they exist. Imagine that enforcement of the fines is put in the hands of a private, self-interested police force, that has no political accountability, that can pursue any defendant it chooses at its own whim, that can accept or reject payoffs in exchange for not prosecuting the tickets, and that pockets for itself all payoffs and fines. Imagine that a significant percentage of these fines were never contested, regardless of whether they had merit, because the individuals being fined have limited financial resources and little idea of whether they can prevail in front of an objective judicial body.

Beyond just questioning the constitutionality of the law, Nesson argues that the court ought to punish the RIAA for its abuses of the law.

This Court should exercise its inherent power to allow background image redress to Joel Tenenbaum for Plaintiffs' abuse of law and federal civil court process. As detailed throughout this brief, Plaintiffs are using any and all available avenues of federal process to pursue grossly disproportionate -- and unconstitutional -- punitive damages in the name of making an example of him to an entire generation of students. The case at hand warrants the use of inherent federal power not just because of what Plaintiffs are doing to Joel Tenenbaum in this Court, but because of the manner in which Plaintiffs are abusing the federal courts all across the country. Plaintiffs have pursued over 30,000 individuals in the same way they have pursued Joel.... For these 30,000 individuals, Plaintiffs have wielded federal process as a bludgeon, threatening legal action to such an extent that settlement remains the only viable option. Joel Tenenbaum is unique in his insistence, in the face of it all, on having his day in court. The federal courts have an inherent interest in deciding whether they will continue being used as the bludgeon in RIAA's campaign of sacrificing individuals in this way.

The filing goes on to describe in rather great detail just how this is an abuse of the law and the courts, noting that it is a "perversion of lawfully initiated process to illegitimate ends," and citing the case law that suggests such behavior should be punished by the courts: "One who uses a legal process ... against another primarily to accomplish a purpose for which it is not designed, is subject to liability to the other for harm caused by the abuse of process."

And this is where it gets good.

To prove the abuse of the process, the filing uses the RIAA's own words against it. First, the writers note (and cite the relevant cases) that even if there is a "proper purpose" behind the filing, it's an abuse of process if the primary purpose in filing the lawsuit is different than the "proper purpose" behind the lawsuit. And, then the authors point to multiple sources where the RIAA noted that the reason it was filing these lawsuits was not to punish these particular individuals for file sharing, but as part of its "deterrence" educational program. From deterrence, Nesson shows how it's actually used as more of a bludgeon to get students to settle, which is clearly not the "proper purpose" of the law:

In essence, Plaintiffs are using the prosecution of Joel Tenenbaum to extort other accused infringers: the accused are told to either pay the settlement, or else be exposed to the protracted litigation and potentially astronomical damages that Joel now faces. See Milford Power Ltd. Partnership by Milford Power Associates Inc. v. New England, 918 F.Supp. 471 (D. Mass. 1996) (holding that "the essence of the tort of abuse of process is the use of process as a threat to coerce or extort some collateral advantage not properly involved in the proceeding"). The intimidation tactics are working: of the 30,000 accusations the RIAA has leveled against individuals, only a single defendant has made her case in front of a judge and jury... (that sole defendant is now awaiting a new trial).

The RIAA intimidates and steamrolls accused infringers into settling before they have their day in court and before the courts can weigh the merits of their defenses. The inherent dangers in allowing a single interest group, desperate in the face of technological change, led by a voracious, cohesive, extraordinarily well-funded and deeply experienced legal team doing battle with pro se defendants, armed with a statute written by them and lobbied and quietly passed through a compliant congress, to march defendants through the federal courts to make examples out of them should lead this Court to say "stop."

This case is going to be worth watching closely. It looks like the RIAA failed in its efforts to tiptoe around the legal bees' nest of Harvard Law.

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Woman Admits File Sharing; Challenges Constitutionality Of Copyright Act

from the now-that's-chutzpah dept

A few years back, there was a research paper released that posited that the fines sought by the RIAA for copyright infringement were unconstitutional. While this argument has been brought up in some court cases, and even considered by judges, it's yet to have been an important part of any decision. That may be about to change.

In the Elektra vs. Barker lawsuits, where earlier rulings had clearly sided with the RIAA on the question of whether or not "making available" was infringement, defendant Denise Barker is taking a new tack: admitting to infringement, but challenging the constitutionality of both the fines and the Copyright Act itself for establishing those fines. Instead, Barker notes that a reasonable "loss" on a downloaded piece of music is about $3.50 (which even sounds high). Considering that the fines start at $750 and go up from there, there's a reasonable argument to be made that the fines are excessive (and there's some case law to support that).

While it's an interesting argument, the chances of a judge buying it seem slim (especially considering the court already sided with the RIAA on most of the "making available" thought process). It will be a fascinating lawsuit to watch, but the odds are pretty strong against having the court decide that the Copyright Act is unconstitutional.

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RIAA Told To Hand Over Data On Cost Per Download

from the constitutionality-questions dept

Earlier this year, a court agreed to examine whether or not the fines the RIAA is asking for in its lawsuits against people accused of file sharing is constitutional (that whole "cruel and unusual" bit). The RIAA, in response, has fought hard to keep from revealing any information about how much a download really costs, but a judge isn't having any of that and has ordered the RIAA in the UMG v. Lindor case to turn over the data.

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