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Why pay a $1.29 per song or for an album at all? Plenty of people pirate music without consequences, so why shouldn’t you?
Ask Joel Tenenbaum.
Tenenbaum was recently dubbed a courtroom “loser” and was cited as one of the Five Biggest Stories in the Music Business. Why? On Tuesday, June 23, the First Circuit affirmed a jury decision requiring Tenenbaum to pay $675,000 for illegally downloading and sharing 30 songs online.
The case began in 2007, when Sony BMG Music Entertainment, Warner Bros. Records, Arista Records, Atlantic Recording, and UMG Recordings sued Tenenbaum when he was a college student. At the time, the Recording Industry Association of America was directly suing individual file-sharers. Tenenbaum is one of two defendants who refused to settle. Earlier this year, the Supreme Court denied cert to the other, Jammie Thomas-Rasset. She now owes $222,000 to companies in the recording industry for sharing 24 songs online.
Despite numerous other violations, Sony only took action against Tenenbaum on 30 songs. Accounts indicate that Tenenbaum lied during discovery, yet eventually admitted to illegally using over 5,000 songs. At trial, a federal judge held based on the undisputed evidence that Tenenbaum violated the Copyright Act, and the jury determined that his actions were willful (leading to the possibility of additional damages). Under the Copyright Act, statutory damages can range from $750 and $150,000 per violation. The jury considered factors such as the nature of the infringement, Tenenbaum’s intent, his profits, and the revenues lost by the music companies. The jury valued each violation at $22,500, making the total fine $675,000 (15% of the maximum statutory fine).
Tenenbaum did have some success arguing that that the actual injury to the record labels was $450, the cost of the 30 albums had he bought them legally. In 2010, Judge Nancy Gertner reduced the fine to $ 67,500 (1/10 the jury’s award) because the original judgment was “unconstitutionally excessive” in light of the actual harm felt by the record labels. She relied on the Supreme Court holding in BMW of North America, Inc. v. Gore to find that the statutory damages award imposed on Tenenbaum violated due process.
Sony appealed, and eventually the First Circuit reinstated the jury’s initial award. Though Tenenbaum’s deception failure to heed the notices the record companies sent hurt his case, the First Circuit ultimately decided the issue on the validity of statutory damages. It reexamined the award based on Gore‘s holding that due process is only violated by a damages amount “where the penalty prescribed is so severe and oppressive as to be wholly disproportioned to the offense and obviously unreasonable.” Congress designed the Copyright Act to deter piracy, so while $675,000 for 30 songs may seem facially disproportionate, Tenenbaum’s actions and Congressional intent allow the jury’s award to stand. Judge Howard explained, “[s]tatutory damages under the Copyright Act are designed not only to provide ‘reparation for injury,’ but also ‘to discourage wrongful conduct’ . . .” In Tenenbaum’s case, 15% of the maximum penalty was well within reason since he continued to pirate for years despite warnings; made thousands of songs available; and complicated discovery with tall tales.
So for all you music lovers: just pay the $1.29. It certainly beats $675,000.
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