Tenenbaum lawyer admits liability; damages now main issue

Here's my recap of day three of the Joel Tenenbaum trial, cross-posted from Ars Technica:

The second-ever P2P file-sharing case to go to trial has been anything but conventional, and today was no exception: one of Joel Tenenbaum's attorneys admitted in court that his client was liable for infringement. The real issue now appears to be the amount of damages.

***

Its been clear for some time that Joel Tenenbaum would face a steep uphill battle countering the record label plaintiffs' evidence that he infringed their rights in 30 sound recordings by downloading and distributing them over the KaZaA peer-to-peer network—but it was still jarring to hear one of his attorneys openly admit liability today in court.

Tenenbaum has himself admitted to his KaZaA use multiple times, under oath, during his two days of depositions. And Judge Nancy Gertner’s last-minute order granting summary judgment for the plaintiffs on Tenenbaum’s proposed fair use defense removed his ability to argue to the jury, "Yes, I did it, but it wasn’t against the law."

This morning, one of Tenenbaum's own attorneys acknowledged—though outside the presence of the jury—that Tenenbaum is essentially defenseless on the issue of whether he committed copyright infringement. During a discussion about the admissibility of the past settlement discussions between Tenenbaum and the labels (normally precluded under Federal Rule of Evidence 408), Tenenbaum attorney Matthew Feinberg blurted out: "We’re admitting liability, your honor."

While in some ways not a surprise, given the state of the evidence, Feinberg’s admission was clear and rather stunning, coming as it did from the mouth of Tenenbaum's own advocate. The seemingly off-the-cuff remark did not constitute a formal throwing-in of the towel; the case will proceed, and liability will still be decided by the jury. But now it’s out in the open: this is really a trial about how much, not whether, Tenenbaum will have to pay.

A question of will

But the plaintiffs remain determined to show just how liable Tenenbaum, a 25-year-old graduate student in physics at Boston University, actually is. For that, they turned to Dr. Douglas Jacobson, an Iowa State University professor of electrical and computer engineering, who gave the jury a primer on IP addresses, peer-to-peer networks, KaZaA, and supernodes. Jacobson, who has served as an expert in several hundred of the music industry’s cases against individuals, sprinkled his testimony with folksy metaphors, one involving ads for puppies and kittens on grocery store bulletin boards, to illustrate concepts like data packets and metadata.

Jacobson opined that Tenenbaum’s computer had been used to download and distribute the 30 songs at issue in this case, and he also explained the results of his forensic examination of the Gateway computer Tenenbaum used at Goucher College and then BU (this is not the computer that MediaSentry says it detected sharing files on August 10, 2004, when Tenenbaum was at home in Providence, Rhode Island on summer break). This computer examination produced some of the most damning evidence against Tenenbaum, as it appears to show that he continued his use of peer-to-peer software to obtain and disseminate music even after he was contacted by the plaintiffs' lawyers in early 2005, then sued in August 2007.

Tenenbaum, opined Jacobson, installed LimeWire on his computer in February 2004 and installed a new version in February 2007. Tenenbaum was sharing files via LimeWire in February 2007, and "possibly as late as May of 2008," said Jacobson, explaining that he could not pinpoint the final date because certain registry files had been deleted from Tenenbaum’s computer. And about 250 files on that hard drive matched the file names in the KaZaA share folder detected by MediaSentry in August 2004.

This is important not just for liability (which the defense appears to have conceded), but for the issue of the "willfulness" of Tenenbaum’s conduct—which could have a dramatic impact on the amount of damages awarded by the jury. Statutory damages max out at $30,000 per work for "regular" infringement, but the upper limit increases to $150,000 per work if the jury finds that Tenenbaum willfully infringed. (Judge Gertner is keenly aware of how important the wilfullness issue is; last night she issued an order “requiring further argument on the question of how ‘willful infringement’ is defined.”)

Tenenbaum counsel Charles Nesson’s cross-examination of Jacobson was shockingly... conventional. He asked Jacobson about his compensation ($200/hour, with about 40-50 hours spent on this case) and the total volume of work he has done for the recording industry (about 300 expert reports)—standard questions intended to show that an expert’s opinions should be discounted because they were bought and paid for. (Similar questions were asked of Jacobson during the Thomas-Rasset trial earlier this year.)

On substance, Nesson zeroed in on the 25 files at issue for which MediaSentry downloaded only a small portion (including metadata)—but not the entire audio file. (MediaSentry downloaded the complete file only for five of the 30 songs at issue here, citing time and bandwidth limits).

Nesson suggested through his questioning that the 25 partial files might not actually represent song files, but instead "spoofs" released by copyright owners to frustrate peer-to-peer users. Jacobson countered that he is confident they were real song files, based on their associated metadata (which includes information including title, artist, album, file size, release group, etc.), and he testified that he cannot recall ever encountering a spoof in his years of work investigating allegations of copyright infringement. And, said a member of the plaintiffs' team, Tenenbaum testified that he listened to and enjoyed all 30 of the songs, which would seem to negate the possibility of any of them being fake files.

What sunk the majors?

Turning to the critical issue of harm, plaintiffs called their expert Stanley Liebowitz, an economics professor at the University of Texas at Dallas, who opined forcefully that file-sharing has harmed the market for recorded music. Liebowitz displayed a graph that showed the revenues from recorded music rising fairly steadily from 1973 until 1999, when they dropped dramatically and continued to fall through 2008, the last year for which he had data.

The cause of the sudden turn for the worse in 1999? Napster, testified Liebowitz. Recorded music revenues dropped from $18.5 billion in 1999 to $8.5 billion in 2008 (both in 2008 dollars). Liebowitz explained how he considered various explanations for the drop in revenue: overall economic conditions, change in prices, and consumer shifts in entertainment purchases away from music to DVDs and videogames. But, he said, the data simply didn’t support any of these explanations, leading him to conclude that the real culprit was consumers’ newfound ability to obtain music on the Internet without paying for it.

On cross, Nesson's interest in big theoretical questions returned. “What is property?” he asked to begin his examination. “Do you have a more pointed question?” retorted Judge Gertner, as she rested her face in her hands.

Nesson then asked Liebowitz when the music industry began to make money. Upon Liebowitz’s reference to the “Middle Ages,” Judge Gertner cut him off with, “This will be a very long trial if we’re going back to the Middle Ages.” To the relief of everyone in the courtroom, he skipped ahead to the 1970s.

Universal Music Group attorney JoAn Cho testified to her company’s ownership of copyright in 13 of the 30 sound recordings at issue in the case. As the song played in the courtroom, Cho identified the MediaSentry download of Nirvana’s “Come as you are” from “sublimeguy14@kazaa” as being the same one found on a legitimate CD. One of the younger members of the jury could be seen tapping his toe to the song, and Judge Gertner cracked a smile—though it was unclear whether she actually enjoyed the music or was simply thinking to herself, “Why in the world are we playing Nirvana in my courtroom?”

Feinberg handled the cross-examination of Cho—hardly among the plaintiffs’ most critical or controversial witnesses—and was surprisingly hostile. He attempted to grill her on UMG’s litigation strategy (which she said she played no role in formulating), but was shut down repeatedly by Judge Gertner, who several times announced “Sustained!” even before plaintiffs’ attorney Matthew Oppenheim had the chance to object—resulting in laughter from several jurors.

Tomorrow

Thursday’s session will begin with the conclusion of Nesson’s cross-examination of economist Liebowitz. Plaintiffs plan to call two attorney witnesses from Warner Music: Ron Wilcox, who will testify as to the music industry’s digital initiatives over the past decade, and Silda Palerm, who will confirm her company's ownership of copyright in songs including Green Day’s “Minority” and The Ramones' “The KKK Took my Baby Away.”

Plaintiffs will also call Tenenbaum to the stand, in what could be one of the most dramatic moments of the trial. And two more of Tenenbaum’s friends will appear by deposition, to rebut Tenenbaum’s suggestions that they had used KaZaA on his bedroom computer. One such friend, Antonio Franco, did that in a very brief live appearance this morning. “I spent a lot of time outdoors skateboarding,” rather than downloading music, said the fauxhawk-ed Franco. On cross, Nesson succeeded only in extracting Franco's concession that he had an “excellent 360 flip.”

The attorneys ended the day by assuring Judge Gertner that they remain on track to conclude their presentations and give the case to the jury on Friday.