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Recording industry plays up win in piracy case
Saturday, October 06, 2007

The nation's recording industry is hoping publicity over a federal jury's decision ordering a 30-year-old single Minnesota mom to pay a nearly quarter-million-dollar fine for illegally downloading music will finally get the attention of tens of thousands of others across the country.

"This does send a message, I hope, that downloading and distributing our recordings is not OK," Richard Gabriel, the lead attorney for the music companies that sued the 30-year-old woman, said after the verdict was announced late Thursday in Duluth, Minn.

In closing arguments to the jury, the attorney used Cold War-era terminology in asking for a tough verdict in the first recording industry downloading lawsuit to go to trial (many other defendants in similar suits have settled by paying the companies a few thousand dollars). "I only ask that you consider that the need for deterrence here is great," Mr. Gabriel told the jurors, who reached their verdict after less than five hours of deliberations.

The attorney's call for more than just a slap on the wrist underscores the grave challenges for the recording industry and its traditional sales model, which has seen already falling sales of CDs plunge another 20 percent the first three months of the year alone, largely because of illegal downloads. A generation of young music fans has grown up downloading music -- both legally and illegally -- and shows little sign of stopping.

Despite more than 20,000 anti-piracy lawsuits filed by the Recording Industry Association of America against individual downloaders since 2003, use of peer-to-peer file sharing networks that allows illegal downloads has grown almost 70 percent the same period, according to Web use analysts Big Champagne. The average number of peer-to-peer users grew from 5,518,899 to 9,350,369 in the same span.

Obviously, many downloaders do not think they will be caught, let alone fined. "This is like putting a Band-Aid on a bullet wound," Justin Jacobs, a 20-year-old junior at the University of Pittsburgh, said of the Minnesota jury's decision.

Mr. Jacobs, the assistant arts and entertainment editor at The Pitt News, said the industry should instead be looking at lowering CD prices and other ways of reaching out to young music fans.

"The record industry needs to look at what's really going on here -- instead of saying, 'You shouldn't be downloading,' they should look at why kids are downloading. When they do, they'll realize what every writer and every critic and every fan has been saying for years -- that albums are overpriced, that albums themselves are bloated with tracks that aren't necessary," he said.

It is a watershed period for the recording industry in more ways than one.

Just days ago, as the file-sharing suit was headed to the jury, one of the biggest names in pop music worldwide -- Radiohead -- announced it is releasing its latest record online, letting fans set their own price for the download.

The announcement sent shock waves through the music business, even though the band, not currently signed to a major label, said it may release a traditional, physical version of the album, called "In Rainbows," next year.

In the Minnesota case, single mother Jammie Thomas was accused of using the file-sharing service Kazaa to share 24 songs by bands such as Guns 'N Roses, Aerosmith, Green Day and Gloria Estefan. They were among 1,702 song files the companies alleged she shared in all.

The jury found she broke copyright law by sharing the files and ordered her to pay the six major record companies suing her $9,250 for each of the 24 songs -- $222,000 overall.

Many other file-sharers sued by the RIAA had settled for a few thousand dollars, but she decided to fight in court. Under copyright law, she could have been charged between $750 and $150,000 per infringement.

It was a major win for the recording industry's legal strategy. The judge in the case ruled the jury could find copyright infringement whether or not anyone downloaded the files Ms. Thomas shared. Just placing the songs on the file-sharing service was illegal.

That is bad news for file-sharing services, said Randall A. Notzen, a partner at The Webb Law Firm, a leading Pittsburgh intellectual property firm.

"The jury in this case in effect emphasized that those who sign up for free file-sharing services, when there is also other evidence of copyright infringement, are not in a position of saying they did not know what they were doing.

This case will likely have a larger impact of tending to pressure, and ultimately erode, free file-sharing services that share copyrighted materials," Mr. Notzen said.

The verdict could also embolden legal efforts by other traditional media outlets going through growing pains -- and losing money -- in the digital age.

On the same day as the file-sharing verdict, NBC Universal Chief Executive Officer Jeff Zucker told the U.S. Chamber of Commerce that "we are losing the battle" against computer piracy and joined calls to name a White House anti-piracy czar to oversee national policing efforts.

Mr. Zucker touted a study from a group headed by former House Majority Leader Dick Armey claiming piracy is a $60-billion-a-year enterprise, costing the U.S. economy 373,000 jobs and $2.6 billion in lost taxes.

Others, including consumer and intellectual freedom groups, respond that downloading and computer usage will not go away, and the entertainment industry must find a way to embrace it, rather than go after their fans with lawsuits.

"Every lawsuit makes the recording industry look more and more like King Canute, vainly trying to hold back the tide," wrote Hugh D'Andrade of the Electronic Frontier Foundation, a San Francisco-based nonprofit.

"As for EFF, we continue to believe there is a better way forward."

First published on October 6, 2007 at 12:00 am
The Associated Press contributed to this story. Tim McNulty can be reached at tmcnulty@post-gazette.com or 412-263-1581.