$9K Per Song File-Sharing Fine A-OK With DoJ

The Department of Justice is siding with the Recording Industry Association of America (RIAA), saying the US$222,000 in penalties levied against a file-sharer after a rare jury trial is not unduly excessive.

Jammie Thomas, who became a celebrity for refusing to settle with the RIAA after being sued for posting music on Kazaa, was found to have knowingly posted 24 songs on the file-sharing network and was ordered to pay $9,250 per song.

In her appeal of the verdict, Thomas has focused in part on whether the penalties violate the constitutional protection of due process — including limits on fines set out in a Supreme Court ruling dating to 1919 — against excessive and severe fines that are not in proportion to the offense committed.

The Justice Department weighed in with a 20-page legal brief filed Monday in U.S. District Court in Minnesota. The document focuses only on the constitutional issues raised by Thomas’ attorney.

The verdict should be allowed to stand, the brief says, because it does not meet the threshold laid out in the 1919 decision known as “St. Louis, I.M. & S. Ry. Co. v. Williams,” in which the court barred penalties “so severe and oppressive as to be wholly disproportioned to the offense or obviously unreasonable.”

Good of the Public

The Justice Department echoes many of the same themes the RIAA sounded throughout the Thomas saga, which drew intense public attention as the first file-sharing suit brought by the RIAA to go to a jury trial.

For instance, the brief — signed by Acting Assistant Attorney General Jeffrey Bucholtz and U.S. Attorney Rachel Paulose — noted that it is unknown how many other users illegally accessed the music Thomas posted.

The jury’s award was actually less than it could have been. If it had settled at the high end of the RIAA’s damages rang — as much as $150,000 per song — it could have awarded close to $4 million.

“Accordingly, it is impossible to calculate the damages caused by a single infringement, particularly for infringement that occurs over the Internet,” the brief states. “Furthermore, plaintiffs contend that witnesses ‘testified to the substantial harm caused by the massive distribution of their copyrighted sound recordings over the Internet, including lost revenues, layoffs and a diminished capability to identify and promote new talent.'”

Congress’ inclusion of provisions for such steep fines is justified “given the historical need to protect intellectual property and deter a public wrong from being committed” and “takes into account the difficulty of calculating actual damages,” the Justice Department says.

Thomas’ gamble to take the RIAA to court was a costly one, since most of the 20,000 song-swapping cases against individuals brought by the association have resulted in settlements of around $2,000. Even if Thomas prevails, she is likely to spend several times that amount on legal costs.

No Winners?

Still, the RIAA has not scored a clean win either, and the backing of the Bush administration is unlikely to be viewed as a public relations coup for the association in the eyes of the music-buying public.

“The RIAA didn’t win any public relations points with this victory, and the deterrent value of the verdict is questionable,” Eric Garland, CEO of P2P tracking firm Big Champagne, told the E-Commerce Times. “They have been consistent about their approach, however, and have not shown any signs of softening it to win popularity points.”

The Justice Department has backed the RIAA in the past in various venues and during the Bush administration in particular it has been a staunch protector of intellectual property rights.

Whether the fines are excessive in the eyes of the law, they certainly seem to be extreme in terms of the costs Thomas is facing, JupiterResearch analyst Mark Mulligan told the E-Commerce Times.

“The RIAA pushed for such a large fine because they wanted to establish a deterrent for other defendants who might wish to challenge the smaller fines or settlements,” Mulligan said. “But the fine in the Jammie Thomas case is out of proportion with the act.”

The problem is that while it’s undoubtedly true the music industry has lost money due to piracy in general, no one can say with any certainly how much any single act of piracy might cost, he added.