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October 3, 2007

First RIAA Piracy Suit That Goes to Trial Starts

The much anticipated civil trial where industry members of the RIAA sued a Minnesota woman for file sharing began today in Duluth.  Jammie Thomas is accused of sharing music over the KaZaA network under the user name "tereastarr (at) KaZaA." This is the first case to go to trial out of the 26,000 or so offenders sued by the RIAA.  Virtually everyone sued had settled or had their cases dismissed when it looked as if the RIAA would lose.

Some interesting revelations came out in testimony.  The first is that the lawsuits are not very cost-effective.  The labels actually lose money by pursuing this course of action, even when the case results in a settlement.  Jennifer Pariser, Sony BMG's head of litigation, admitted this as a witness.  She also noted that the labels have no idea how much money they are losing to file sharing or even what are their actual damages.  Of course, the copyright act specifies statutory damages for infringement which is what these plaintiffs use as their baseline. 

The Washington Post is reporting today on a new study prepared by the Institute for Policy Innovation that the theft of music, movies, video games and software impacts the U.S. economy to the tune of $58 billion per year.  This includes international piracy and not merely illegal downloading.  The story notes that the segment dealing with the music industry created estimates using proprietary industry data, sales data, and other documents created by the industry.  This suggests that the labels can value their loss, but that value is hard to pin down given Pariser's sworn testimony.  There are some caveats on the valuation in that the study admits that some goods valued would not ring up a sale if piracy were non-existent. The study also says that piracy is going up.  Between 2005 and 2007 people who admitted they bought a song or CD they knew wasn't genuine rose from 5% TO 9%.

Pariser also took the view that someone ripping a song from a CD that they owned should be considered piracy.  This has never been tested in court, but it's a safe bet that many people see this practice as fair use.  She said that the ability to back up a CD does not mean the labels authorize the activity. 

The evidence listed in the various stories on the trial suggests that the RIAA is likely going to prove its file sharing case against Thomas.  Though legally correct, the music industry may find more embarrassing details about its operation coming out.  That's hardly a win-win situation for anyone.

October 3, 2007 | Permalink

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