There's been a lot of discussion lately about the AP's reliance on a rather ancient precedent that "hot news" can be protected, despite the fact that you can't copyright factual information, in its case against the site All Headline News. This has thrust the concept of "hot news" protection back into the spotlight after most people considered it a dead concept. Now, suddenly, newspapers all over are talking about trying to extend the "hot news" concept and even expanding copyright law to explicitly allow such hot news protectionism, despite the massive harm it would do. For that reason, the lawsuit between the AP and AHN was quite important... and yet, Will alerts us to the fact that the the AP and AHN quietly settled the lawsuit last month (warning: pdf). No details are provided in the settlement announcement, but the key thing for the AP is it lets it act as if "hot news" is definitely still allowed. A full lawsuit with AHN pushing back on the concept could have wiped out the concept of hot news, and clearly the AP didn't want that to happen just as it was about to start threatening and suing a bunch of aggregators. Perhaps that's why the Associated Press didn't even seem to report on its own "hot news."

This will come as a surprise to just about no one, but Jammie Thomas' lawyers have pointed out that the $1.92 million verdict against her is excessive, and is asking the judge to either throw out the award, lower it to the statutory minimum or grant a new trial. That was pretty much expected. What's odd, however, is the note at the very bottom of that article, concerning the filing that the RIAA made to the court. The RIAA keeps insisting that it just wants to settle the case, but if that's true, it seems weird to then attack Thomas in court again, but that's what the filing seems to do. It suggests that Thomas (despite this whole process) must still be sharing songs and that the court needs to issue an injunction barring her from doing so. While we've said that there appears to be ample evidence that Thomas used file sharing programs (and that she shouldn't have let this case go to trial), it would be quite surprising if anyone had any evidence that she was still doing this. As far as I know, the RIAA has not presented any such evidence at all. Demanding an injunction, then, seems quite strange.

On top of that, the RIAA appears to falsely claim (or the AP reporter misquoted the RIAA) that Thomas "distributed more than 1,700 songs to millions of others through the file-sharing system Kazaa." That may be true, but it certainly was not shown in court at all. The RIAA only named 24 songs she was charged with sharing, and then did not present any evidence that she actually shared any of them with anyone other than the RIAA's own investigators. The claim that she "distributed more than 1,700 songs to millions of others" was not proven at all, and in fact this entire new trial was because the judge originally made the mistake of assuming "making available" meant distribution. It does not. For the RIAA to misstate this point is really quite odd.

How badly do you think the RIAA wants Jammie Thomas to settle? Since the verdict came down, the organization has done everything it possibly can to distance itself from the $1.92 million verdict against her for file sharing. While willing to play up the ruling itself the organization seems to recognize that the insanity of the $1.92 million doesn't do it any favors. Even the musicians whose music was part of the case are embarrassed by the amount. In an ideal world, the RIAA would love to settle the lawsuit for some lower amount so it can run around touting the "risks" of file sharing without having people laugh outloud when hearing that someone had to pay $1.92 million for potentially sharing 24 songs that could be bought for $1 each.

So, you get a slightly bizarre situation, where it's the RIAA proactively reaching out to Thomas to try to settle the lawsuit -- but so far Thomas apparently isn't interested. I've been saying that I thought she would settle, but the longer this goes on, the more I wonder if she's actually planning to fight on. If so, this could certainly represent a case to examine the statutory rates associated with copyright violations. The verdict seems so out of proportion with the supposed "crime" that it's difficult to see it pass the laugh test. However, there's a halfway decent chance that a court punts on the issue, saying (as the Supreme Court did in the Eldred case) that such questions are up to Congress, rather than the courts. Of course, if the case is to move forward, it would help to have lawyers who have had more than a few weeks to study up on the issues, and who didn't make public pronouncements that were distractions rather than anything related to the actual case.

It's been interesting to see the aftermath of the Jammie Thomas $1.92 million ruling, as it appears that even the RIAA is recognizing that such an insanely large award gives them something of a black-eye and has the possibility of creating a bit of a backlash. However, apparently they forgot to send out that message to all of their usual attack dogs. In an AP article discussing the ruling and the $1.92 million number with a variety of different people, the RIAA tried to distance itself from the number, specifically stating, "That was not our number, that was what 12 regular folks rendered." Uh, yeah, except that the RIAA has long used the statutory numbers in their arguments about the "risks" of file sharing.

Tom Sydnor, from the Progress & Freedom Foundation (PFF), a loud and proud supporter of stronger copyright at every turn (and who is well funded by the RIAA labels), apparently missed the memo on playing down the number. He told the reporter that it was a perfectly reasonable number.

"Legally acquiring a license to give copies of a song to potentially millions of Kazaa users might well have cost $80,000 per song,"

Except... that's not even close to accurate. The record labels presented no proof that she gave the song to millions of users, and seem to totally ignore the fact that these songs were available from tons of other sources (either legally or illegally) for prices between nothing and $1. To claim that the record labels would literally consider an option to license a single user putting a song into a shared folder at $80,000 is simply ridiculous.

But, of course, it shows the mentality of those paid for by the RIAA. These are the same people who accuse Larry Lessig of being a communist by taking a few statements totally out of context, and then accuse universities of supporting terrorism by not violating students' privacy and handing over their details to the RIAA.

So, if the RIAA is really serious about playing down the size of the jury award, it might want to rein in Sydnor before he says much more. If you're looking for someone to get out a message by appearing as a caricature of the evil record labels, I don't think you could find any organization better than PFF. But, that's probably not what the RIAA needs right now, unless it really wants to give the folks on the fence even more reason to leap over to the side who recognizes just how much the labels have twisted, stretched and abused copyright law over the years, totally at odds with its constitutional prescription of promoting the progress of science. Defending a $1.92 million award to the record labels for 24 songs in a shared folder, with no evidence that a single one was actually shared, is not promoting the progress. It's promoting massive greed and regulatory capture at the expense of society.

Like many others, when I first heard about the $1.9 million the jury awarded the record labels from Jammie Thomas in her trial, my initial question was how that could possibly be constitutional and not excessive. However, given the immediate talk of settlements, I figured that question is unlikely to be asked in a courtroom. The EFF, however, has taken a look at the specific constitutional issues and how any appeal might be organized. There are two specific potential problems. First, the award is clearly designed to be punitive, rather than remunerative:

First, the Supreme Court has made it clear that "grossly excessive" punitive damage awards (e.g., $2 million award against BMW for selling a repainted BMW as "new") violate the Due Process clause of the U.S. Constitution. In evaluating whether an award "grossly excessive," courts evaluate three criteria: 1) the degree of reprehensibility of the defendant's actions, 2) the disparity between the harm to the plaintiff and the punitive award, and 3) the similarity or difference between the punitive award and civil penalties authorized or imposed in comparable situations. Does a $1.92 million award for sharing 24 songs cross the line into "grossly excessive"? And do these Due Process limitations apply differently to statutory damages than to punitive damages? These are questions that the court will have to decide if the issue is raised by Ms. Thomas-Rasset's attorneys.

The second issue questions whether the court has the right to try to use Jammie Thomas as an examples to warn off others (something the RIAA has been pushing for throughout this entire show-trial of a case):

Second, recent Supreme Court rulings suggest that a jury may not award statutory damages for the express or implicit purpose of deterring other infringers who are not parties in the case before the court. In other words, the award should be aimed at deterring this defendant, not giving the plaintiff a windfall in order to send a message to others who might be tempted to infringe. It's hard to know without having been in the courtroom, but if the record industry lawyers urged the jury to "send a message" to the millions of other American file-sharers out there, they may have crossed the constitutional line.

Interesting stuff, should Thomas decide to push forward. The downside, however, is that for whatever reason, to date the Supreme Court seems to throw normal precedent out the window when it comes to copyright law. I was just reading a long study (more on that later) of how a series of recent Supreme Court rulings on copyright seem to simply ignore precedent and simply accept the myth of copyright's importance over all else.

Last month, we noted that it was a really bad idea for Jammie Thomas not to settle her lawsuit with the recording industry. There was simply way too much evidence for a jury not to convict her. The trial itself was, again as expected, something of a circus, rather than anything interesting or compelling. So, it should come as no surprise that, yet again, Thomas has been found guilty. But what is surprising is that the the jury chose to fine her $1.92 million, or $80,000 per song. That's $1.7 million more than the original trial. $80,000 per song! Still, it was a really bad idea for Thomas to go through with this suit as there was way too much evidence linking her to the music (and too many problems with her own testimony). Now the RIAA is handed a gift. A verdict that it can gloat about and misrepresent to its own advantages. What might be interesting is whether (for all the RIAA gloating) this ruling has a similar impact as The Pirate Bay victory had in Sweden -- galvanizing people to support the Pirate Party. Somehow, the story isn't quite as compelling though.

Despite the judge in her case pushing hard for the RIAA and Jammie Thomas to come to some sort of settlement in their rather infamous lawsuit, it appears the sides have not come to any settlement, and a new trial will be heard. The case, famously, was the first in which the RIAA actually won, only to have that ruling quickly thrown out after the judge realized he made a "material misstatement of the law" to the jury in suggesting that merely "making files available" should count as copyright infringement (a point of disagreement in different courts right now). There were some other questions concerning certain "misstatements" by execs from the record labels, which could have misled the jury.

While it's good that the judge reconsidered based on the misstatement over "making available," this seems like a case where Thomas probably should have settled. It certainly appears that there is plenty of other evidence that she was, in fact, breaking copyright law. While I think the law is bad and the fines are ridiculous, her chances of winning in court remain slim. Handing the RIAA a case where it has so much evidence on its side doesn't help matters. It's likely that it will win again and will once again use the ruling to tout its ability to win in court. Perhaps the only redeeming factor of such an eventual court ruling is calling additional attention to the ridiculous damages that would be awarded.

Ray Beckermann is, once again, highlighting some highly questionable activities by the RIAA, noting that after getting defendants to agree to a settlement amount, the RIAA sometimes immediately asks for double the agreed upon amount, and submits that proposal to the court. It's unclear how widely this is happening, but at least in one case, it's good to hear that a judge has prevented the RIAA from getting away with this practice by denying the agreement, noting the different sum than the one agreed to by the parties:

Judge Nancy Gertner: ELECTRONIC ORDER entered re Stipulation To Judgment and Permanent Injunction filed by All Plaintiffs as to defendant LaShaana Straw. "The parties' Stipulation to Judgment is DENIED. Plaintiffs request that the Court approve a Stipulation requiring the Defendant to pay $10,700, yet state in their Response that they have agreed to accept half that amount, $5,350, in full satisfaction of the monetary portion of the proposed judgment. The Plaintiffs do not provide any reason for this highly unusual arrangement, and the Court will not approve a stipulation which fails reflect the actual terms of the agreement. The Plaintiffs must present to the Court a proposed judgment which accurately states the amount the Defendant will be required to pay to settle the claims."

This would be the same judge, by the way, who slammed the RIAA for its questionable legal tactics just a few months ago. You would think that the RIAA would know better than to try to play legal games with Judge Gertner.

I know that many folks disagree with my view that Google's decision to settle with book authors and publishers was a huge long term strategic mistake, but it appears others are beginning to recognize the issues. Already, we've seen Harvard bail out on the deal, since it seems to work at cross purposes to Harvard's mission, but more importantly, others are realizing the implicit statement behind Google's caving: information is not free, and those who have information should line up to Google and demand to get paid. In fact, as found on Romenesko, some are wondering when newspaper and magazine execs will realize what the book scanning deal means, and start demanding the same sort of deal from Google. I would suggest it goes even further than that. If Google is setting up a pool to pay authors, and if that leads to them doing a similar thing for newspapers and magazines, why not other websites as well? Google has now set a precedent of being willing to pay in order to display works in its index, and that's going to backfire badly.

A few years back, in settling a civil lawsuit against Microsoft for its monopolistic practices, Microsoft agreed to pay out $250 million to California schools, in the form of vouchers. Now, there are some who might point out that this sort of "settlement" makes good business sense, in that many will use the vouchers on PCs with Microsoft software, thereby getting a new generation of kids hooked on Microsoft products (it's worth pointing out that the vouchers can be used on non-Microsoft software as well). However, that's hardly the biggest issue, apparently. Instead, people are realizing that the vast majority of the $250 million is not being used by the schools. Some are pointing out that their budgets are being slashed, and since they have to pay for the equipment upfront and then request money back later, it's just too much trouble. Others are saying it just hasn't been a priority, even though they know the money is available.