No Making Available Right in USA + Statutory Damages Dissed

In a very important decision in the Jammie Thomas case, Judge Michael J. Davis, the Chief Judge of the U. S. District Court for the District of Minnesota has has granted Jammie Thomas a new trial.

He held that he had erred in the notorious jury instruction #15 and that there is no "making available" right in the USA. There must be proof of actual dissemination. The Court ruled that the WIPO treaties are not self executing in the USA and the statute is not ambiguous.

While the potential resonance of this in the USA and Canada is enormous, the immediately interesting aspect is the scathing commentary on the USA statutory damages provisions which resulted in a $222,000 jury award. These comments should be read verbatim by anyone interested in Canada's Bill C-61, because Bill C-61 would make such damages available for a broad range of everyday activity in Canadian households and businesses:

The Court would be remiss if it did not take this opportunity to implore Congress to amend the Copyright Act to address liability and damages in peerto‐peer network cases such as the one currently before this Court. The Court begins its analysis by recognizing the unique nature of this case. The defendant is an individual, a consumer. She is not a business. She sought no profit from her acts. The myriad of copyright cases cited by Plaintiffs and the Government, in which courts upheld large statutory damages awards far above the minimum, have limited relevance in this case. All of the cited cases involve corporate or business defendants and seek to deter future illegal commercial conduct. The parties point to no case in which large statutory damages were applied to a party who did not infringe in search of commercial gain.

The statutory damages awarded against Thomas are not a deterrent against those who pirate music in order to profit. Thomas’s conduct was motivated by her desire to obtain the copyrighted music for her own use. The Court does not condone Thomas’s actions, but it would be a farce to say that a single mother’s acts of using Kazaa are the equivalent, for example, to the acts of global financial firms illegally infringing on copyrights in order to profit in the securities market. Cf. Lowry’s Reports, Inc. v. Legg Mason, Inc., 271 F. Supp. 2d 737, 741‐42 (D. Md. 2003) (describing defendants as a “global financial‐services firm” and a corporation that brokers securities).

While the Court does not discount Plaintiffs’ claim that, cumulatively, illegal downloading has far‐reaching effects on their businesses, the damages awarded in this case are wholly disproportionate to the damages suffered by Plaintiffs. Thomas allegedly infringed on the copyrights of 24 songs ‐ the equivalent of approximately three CDs, costing less than $54, and yet the total damages awarded is $222,000 – more than five hundred times the cost of buying 24 separate CDs and more than four thousand times the cost of three CDs. While the Copyright Act was intended to permit statutory damages that are larger than the simple cost of the infringed works in order to make infringing a far less attractive alternative than legitimately purchasing the songs, surely damages that are more than one hundred times the cost of the works would serve as a sufficient deterrent.

Thomas not only gained no profits from her alleged illegal activities, she sought no profits. Part of the justification for large statutory damages awards in copyright cases is to deter actors by ensuring that the possible penalty for infringing substantially outweighs the potential gain from infringing. In the case of commercial actors, the potential gain in revenues is enormous and enticing to potential infringers. In the case of individuals who infringe by using peer‐to‐peer networks, the potential gain from infringement is access to free music, not the possibility of hundreds of thousands – or even millions – of dollars in profits. This fact means that statutory damages awards of hundreds of thousands of dollars is certainly far greater than necessary to accomplish Congress’s goal of deterrence.

Unfortunately, by using Kazaa, Thomas acted like countless other Internet users. Her alleged acts were illegal, but common. Her status as a consumer who was not seeking to harm her competitors or make a profit does not excuse her behavior. But it does make the award of hundreds of thousands of dollars in damages unprecedented and oppressive.

It is worth noting that the RIAA brought in its lead litigator - the renowned Don Verrilli who won the Supreme Court Grokster case - to save this case. This attempt didn't work.

Judge Davis is a brave and learned judge who on his own motion re-opened this case when he sensed that he may have made a "manifest error" in his jury instructions.

Congrats to the intervenors including EFF, Public Knowledge and the professors whose research and advocacy turned this around. However, I doubt that this will be the end of the story.

And one bit of potentially bad news for Ms. Thomas is that Judge Davis did rule that "distribution to an investigator, such as MediaSentry, can constitute unauthorized distribution". That ruling is bound to be controversial.

HK