Wednesday, September 21, 2011

Copyright Infringement Damages: Why Is Sony Really Suing Joel Tenenbaum?

Joel Tenenbaum is a student pursuing a PhD. He does what lots of students do, listens to music. Apparently Joel also downloads some of that music off the Internet without paying. Sony (and others) found out and sued him. Joel chose to fight the suit and enlisted the help of law professor Charles Nesson. Apparently that didn't go so well, and a jury returned a verdict against Joel of $675,000 for downloading about 30 songs. Wow.
The trial judge (correctly) decided that was way too much money. The trial judge said the award was so excessive that it was unconstitutional, so the trial judge reduced the amount by a factor of 10 to $67,500. Sony appealed because they wanted the whole excessive amount.
Last week, the appellate court overturned the trial judge's reduction of the award. The appellate court agreed that Joel was liable, and sort of agreed that the award was excessive, they just disagreed with how the trial judge decided to reduce the amount. Basically, the appellate court said the trial judge should have given Sony the choice between a new trial or the lower amount.
Here is a really good article written by a second year law student who has an interesting perspective on the case. What makes it interesting is the author asks the question: Why is Sony pursuing such an excessive damages award when it is costing Sony so much to do so? In other words, what does Sony really have to gain by pushing to re-instate the original $675,000 award? The case just went back to the same trial judge who is likely to come down the same way, only this time he will offer Sony the option of a new trial instead of the lower damages amount. Either way, does Sony really think it will recover $675,000 from a student? Really?
Good business sense should dictate that a company should make good business decisions. Here, Sony and its gang are pushing forward to reinstate a damages award that it could never recover even if it was reinstated, or to get a new trial that won't do anything for Sony either. All they could possibly hope to get is another excessive, noncollectable verdict. Sony is spending a ton of money fighting this case with very little, if any, chance of actually recovering anything.
Here's what's really happening. The economy is still very soft. Law firms are still laying off lawyers and struggling to get work. So here is the story that its law firm sold to Sony (and many other big companies). "You have to push this case to set an example." "If you don't fight hard then others will do the same thing." "It's OK if you lose lots of money on this case because you will make it up later." That is all a crock of poop.
Have all these lawsuits seriously impacted online piracy? No! Students still download just as many songs online as ever. They also buy a lot more songs than ever too. In fact, the only thing that has happened is these lawsuits have spawned an entire cottage industry of online piracy lawsuits. These companies are even suing dead people now. If death isn't a deterrent to online piracy, a lawsuit certainly isn't.
Sony and their ilk are not making money on these cases. The RIAA is not making money on these cases. The only people making money on these cases are the lawyers. As a copyright lawyer myself, I realize the inconsistency with which I make that statement because I am not philosophically opposed to people making money. However, in situations where the only people making money are the lawyers, is that really justice?