Team Tenenbaum's biggest mistake

What has been the biggest mistake by Joel Tenenbaum's defense team? Failing to depose a single witness? Angering the judge by recording conversations with the court and opposing counsel? Spending time on a quixotic and ultimately unsuccessful effort to have the case webcast, rather than focusing on trial preparation? Part-way through the trial, it's now clear to me that the biggest mistake was a different one: failing to secure an expert to testify as to actual damages, i.e., the harm caused by Tenenbaum's downloading and "sharing" of the 30 songs at issue in this case.

Tenenbaum's liability for copyright infringement is an all-but-foregone conclusion. He has admitted under oath at his depositions that he used KaZaA and other p2p software for years, even after he was served with the complaint in this case. And now he will be forced to acknowledge those admissions on the stand, before the jury. The pile of forensic evidence from MediaSentry, Cox, and plaintiffs' expert Dr. Jacobson is mere icing on the plaintiffs' cake.

So the real action is in damages. The jury will be instructed that, if they find for the record labels on liability, they may award statutory damages ranging from $750 to $30,000 per work, or up to $150,000 if they find Tenenbaum's infringement was willful. That's a minimum of $22,500, and a max of $4.5 million -- obviously a huge range. The jury will be permitted to consider various factors in determining where within that range the award should fall, including the amount of actual damages.

Actual damages in a case like this are difficult to prove -- which is precisely why the law allows for statutory damages. Proving actual damages requires hard-core economic and statistical analysis -- more than having a company employee testify: There's been lots of piracy, and lots of job losses. Therefore piracy caused the job losses. Q.E.D.

Plaintiffs have such economic analysis, from their expert, University of Texas at Dallas economist Stanley Liebowitz. Defendant has...nothing. Barely a week before trial, Tenenbaum suggested he intended to call as a witness Felix Oberholzer-Gee, a professor at Harvard Business School who has concluded there is no evidence that peer-to-peer use has harmed the recorded music industry. But Judge Gertner granted the plaintiffs' motion to exclude him, on the obvious grounds that he was disclosed more than three months after the expert deadline. (It was never even clear that Oberholzer-Gee had actually agreed to testify.)

To be sure, Liebowitz vigorously disputes Oberholzer-Gee's findings and conclusions. But if Team Tenenbaum had retained him in a timely fashion, they would have at least been able to put a little meat on the bones of their "no harm, no foul" argument, and given the jury a plausible reason to choose an award at the low end of the range. But without any economist taking the stand on Tenenbaum's behalf, the defense can do little more than attempt to poke holes in Liebowitz's conclusions, and rely on their own arguments and assertions at closing.

So when we look back on what went wrong with the defense, failing to retain an economist to testify as to the lack of harm is probably Exhibit A -- rivaled only by the decision not to settle.

UPDATE: Today after trial I asked Tenenbaum's counsel Charles Nesson why he was not able to get Oberholzer-Gee to serve as a defense expert. Nesson told me he tried, but was never able to reach his colleague across the Charles. Nesson said he never actually had any contact with Oberholzer-Gee about this case.