Ars Technica: 'Billion Dollar Charlie takes on the RIAA'

Ars Technica's Nate Anderson has an interesting new interview with Harvard Law Professor Charles Nesson, counsel to accused peer-to-peer infringer Joel Tenenbaum, asking the crucial question: "Is there a method to the madness?" We don't get a definitive answer. But we do get this delightfully honest quote from Nesson, explaining his "first thought" upon being asked by Judge Nancy Gertner to take the case:

How the hell am I going to do this? I'm not a trial lawyer.

Good question! Read the whole thing.

House Foreign Affairs takes junket to glamorous...Van Nuys

Join the Foreign Affairs Committee! Visit London, Paris, Rome...and Van Nuys? Yes, the full committee is holding a hearing titled "Sinking the Copyright Pirates: Global Protection of Intellectual Property" April 6, in the heart of the Valley. Not as crazy as it sounds: committee Chairman Howard Berman (D) lives in Van Nuys-adjacent Valley Village, and many of the world's biggest copyright owners (Warner Bros., Disney, NBCU, among others) are right nearby. Berman -- who has a deep interest in copyright issues and formerly chaired the House Judiciary Subcommittee on Courts, the Internet and Intellectual Property -- has assembled a high-profile line-up that includes director Steven Soderbergh, Dick Cook, Chairman of The Walt Disney Studios, and Zach Horowitz, President and Chief Operating Officer, Universal Music Group.

Here's the full description:

Sinking the Copyright Pirates: Global Protection of Intellectual Property

You are respectfully requested to attend the following open hearing of the Full Committee to be held in Van Nuys Civic Center, 14410 Sylvan Street, Van Nuys, CA 91401.

Monday, April 06, 2009

Time 10:00 (PST) AM

Location Van Nuys Civic Center, 14410 Sylvan Street, Van Nuys, CA 91401

Witnesses:
Mr. Steven Soderbergh
National Vice President
Directors Guild of America

Mr. Richard Cook
Chairman
The Walt Disney Studios

Mr. Michael F. Miller, Jr.
International Vice President
The International Alliance of Theatrical Stage Employes (IATSE)

Mr. Zach Horowitz
President and Chief Operating Officer
Universal Music Group

Mr. Timothy P. Trainer
President
Global Intellectual Property Strategy Center, P.C.

Note: Witnesses may be added.

Copyleft academics to Nesson: fair use defense is a loser; Lessig urges jury nullification; Mrs. Nesson savages naysayers

It has become a cliché of my coverage of the Joel Tenenbaum case to proclaim, "Just when you thought the Joel Tenenbaum case couldn't get any wackier, Tenenbaum's counsel, Harvard Law Professor Charles Nesson, has now gone off and done X...." Well, just because it's a cliché doesn't mean it isn't true. So...Just when you thought the Joel Tenenbaum case couldn't get any wackier, Tenenbaum's counsel, Harvard Law Professor Charles Nesson, has now posted to his blog emails containing internal strategy discussions with several top copyleft academics in which those academics flatly reject Nesson's theory of the case. [UPDATE: Nesson appears to have removed the emails from his blog post on the morning of March 31. But...saved for posterity.] Those academics -- whom Nesson had planned to call as expert witnesses to testify on Tenenbaum's behalf -- tell Nesson in no uncertain terms that his plan to mount a fair use defense of Tenenbaum's peer-to-peer activities is a sure legal loser. And Stanford Law Professor Lawrence Lessig urges Nesson to argue for outright jury nullification: "whatever the law requires, We, the Jury, won’t allow it."

A sampling from the emails:

Lawrence Lessig, Professor, Stanford Law School:
I am surprised if the intent is to fight this case as if what joel did was not against the law. of course it was against the law, and you do the law too much kindness by trying to pretend (or stretch) “fair use” excuses what he did. It doesn’t. But if you want to argue it does, then I should think it a big mistake to include Terry on the team, or me for that matter. I have given literally hundreds of speeches where I expressly say p2p filesharing is wrong, and kids shouldn’t do it. I think FREE CULTURE says that more than a dozen times.
I should have thought instead this was a simple nullification case. Of course, it is practically impossible to frame and present a nullification case. despite the framers belief that nullification was an essential part of the jury right (at least in the context of criminal law), it has over the centuries been emaciated. but that’s the only honest frame for joel’s case — whatever the law requires, We, the Jury, won’t allow it.
Terry Fisher, Professor, Harvard Law School:
I cannot, however, testify that Joel’s activity constitutes a fair use under current copyright law, because I don’t think it does. Thus, I’m worried by your statement that “our case is fair use.” I fear that what I have to say will not contribute to that assertion. Moreover, I will be subject to cross examination, in which I will have to say the opposite.
***
My view is that it’s not credible to argue that widespread P2P filesharing has not and will not give rise to “some meaningful likelihood of future harm” to the revenues of the holders of copyrights in sound recordings and musical works.... I think you need to engage more than you have as yet with the case law in this area, which is quite hostile to your assertion that ordinary P2P filesharing is fair use. The key decisions are Napster, Aimster, and Grokster. In answer to your question, yes, I fear that failure to address the holdings (or dicta) of those decisions will give rise to a directed verdict or summary judgment against you — and you will never get a chance to make your case to the jury.

Wendy Seltzer, Practitioner in Residence, American University's Washington College of Law:
Add me to those puzzled by the “fair use” arguments. I understood the argument to be that statuory damages are inappropriate and unconstitutional in response to personal-use copying, not that such copying was within the bounds of existing law.
I think it would be more convincing to argue that Joel’s conduct was “fair” as an ethical matter than to claim that it meets the legally established category of “fair use.”
I fear that we do damage to fair use by arguments that stretch it to include filesharing — weakening our claims to fair use even for un-permissioned transformations. I am much more comfortable disagreeing with the law than claiming at this point in time that it already excuses
filesharing.
[REDACTED], Harvard Law School student and member of Tenenbaum legal team:
All of this looks very bad from my perspective. I think that introducing our experts at this late stage to the very novel argument that we intend to raise at trial - an argument which has no real basis in case law or moderate academic scholarship - is a blunder that could have very serious consequences. At this point, I have no idea what our disclosures will look like. And they have to be filed TOMORROW. Bad, bad, bad.
We should have been working on this for weeks rather than days.

And not content to waive the work-product privilege, Nesson has also waived the marital privilege, posting to his blog an .mp3 of a conversation between him and his wife Fern, in which Mrs. Nesson delivers a rousing -- and profane! -- pep talk to her husband, urging him to stick with fair use, and savaging the naysaying experts:

They're going to have to go back to the fucking cases and really consider it, instead of spouting all the shit that they're teaching their students.... And it wouldn't hurt to point out to them that you're a better case-reader than they are.

One last question: who exactly is "[REDACTED]," and why is he "such a schmuck"?
[Update on Prof. Nesson's blog: "[REDACTED] is one of my students, not ray beckerman."]
UPDATE: this is far from the first time Nesson's posting of apparently private emails and recordings has raised eyebrows. From a 2002 Crimson profile:

In addition to his formidable legal reputation, [Nesson] is know throughout HLS for his habit of frustrating other professors and publicizing confidential information.

In September, Climenko Professor of Law Charles J. Ogletree scheduled Jesse Jackson to speak at HLS, during the meeting time of several classes, including one taught by Law professor Alvin C. Warren.

Warren then sent an e-mail to a small group of faculty members, including Nesson and Ogletree, asking that the event be rescheduled.

Ogletree and Warren had a heated and personal debate over e-mail that Nesson wanted to share with students and faculty. Warren said he thought it was better not to.

Nesson shared the e-mails with his class anyway. When Warren met with Nesson to discuss the ethics of divulging the e-mails, Nesson secretly tape-recorded this conversation, then put the audio and the e-mails on his website and told students and faculty where they could find it.

The referenced Warren/Ogletree/Nesson emails are here.

ISPs, RIAA, the DMCA, 'graduated response,' and 'three strikes': the real story

The worldwide conflagration over "graduated response" and "three strikes" copyright enforcement proposals -- on which fire was thrown last week by conflicting reports of US ISPs' cooperation with the RIAA -- has, unsurprisingly, been marked by confusion and incorrect statements of the law. Let's try to clear some of this up.

First, the terminology. "Graduated response" is a term generally used to describe a program implemented by an ISP to address claims by copyright owners of infringement by the ISP's subscribers. Under graduated response, the ISP "graduates" -- i.e., increases, or makes more severe -- its response to the infringing subscriber upon each successive notice of infringement. So, for example, the first claim may lead to a warning. The next claim may lead to a harsher warning. The next claim might lead to a suspension, a monetary penalty, a degradation of service, or worse. A "three strikes" program refers to a particular subset of graduated response programs where the penalty upon the third notice of infringement is termination of the subscriber's account.

So what is the state of US law regarding graduated response and three strikes? Are ISPs legally required to implement these programs? Almost certainly no, as to peer-to-peer users. I think the law is now fairly clear that ISPs may not be held financially responsible for infringement by their users via p2p networks -- and that ISPs are not obligated (absent specific court order) to take action against users who infringe by p2p, even repeatedly. The reason lies in 17 U.S.C. § 512(a) -- the ("clear (albeit complex)"!) DMCA safe harbor for "Transitory Digital Network Communications" systems like ISPs. Section 512(a) provides a safe harbor from infringement claims against operators of so-called "dumb pipes" where "the transmission, routing, provision of connections, or storage is carried out through an automatic technical process without selection of the material by the service provider." (More detail in RIAA v. Verizon and pages 50-51 of the House DMCA report.) Significantly, the 512(a) safe harbor does not have a "notice and takedown" or repeat infringer provision [see update below]. In sum, 512(a) says that if the pipe is truly dumb -- a mere conduit, with no selection of material, no modification of content, and no storage -- then it gets the safe harbor, no further action required. (I should add that 17 U.S.C. § 512(j)(1)(B)(i) does authorize a court to issue an injunction (not monetary damages) "restraining [an ISP] from providing access to a subscriber or account holder of the service provider’s system or network who is using the provider’s service to engage in infringing activity...by terminating the accounts of the subscriber....")

[UPDATE: It is true that Section 512(i) provides that, to benefit from any of the DMCA safe harbors, the ISP/host must have "adopted and reasonably implemented, and inform[ed] subscribers and account holders of the service provider’s system or network of, a policy that provides for the termination in appropriate circumstances of subscribers and account holders of the service provider’s system or network who are repeat infringers." However, I know of no court that has interpreted that provision as requiring the forwarding of notices by an ISP to accused p2p infringers.]

(It's crucial to keep in mind the distinction between the Section 512(a) safe harbor for ISPs and the Section 512(c) safe harbor that governs "Information Residing on Systems or Networks At Direction of Users." The 512(c) safe harbor arguably covers hosts of user-generated content like YouTube and MySpace (though my friends at Viacom and UMG and NBCU don't concede this point). Section 512(c) does have a notice-and-takedown provision, and, to maintain the safe harbor, hosts must "terminat[e] in appropriate circumstances...repeat infringers." "Three strikes" is not a concept completely alien to the DMCA. YouTube, for one, has stated that it terminates upon a third DMCA notice as part of its implementation of the "repeat infringer" provision. See pages 17-18 of this brief.)

But wait: isn't an ISP at least required to pass on infringement notices to its subscribers when it receives such notices from copyright owners? CNET says so:

The Digital Millennium Copyright Act of 1998 has mandated that ISPs forward those letters to people accused of violating copyright.

And so (though I hesitate to cite such an openly pro-infringement site) does TorrentFreak:

For years, content owners such as record labels or movie studios have been sending copyright infringement notices to ISPs, who are legally obliged to forward these to their customers.

(my emphasis). Here's the explanation: I think CNET and TorrentFreak are both just plain wrong. Neither cites any DMCA provision that would obligate an ISP to forward infringement notices premised on p2p infringement by an ISP customer, and I know of none (and believe me, I've looked).

So why, if not forced by the DMCA or other provisions of copyright law, would ISPs forward notices, implement graduated response programs, or even terminate repeat p2p infringers (as TorrentFreak accurately says has been going on for years)? At least three reasons:

1) Because ISPs want to keep Congress off their backs. While the copyleft generally doesn't think online copyright infringement is a serious problem, virtually the entire Congress does. (Remember, the PRO-IP Act passed the House last year 410-11, and by unanimous consent in the Senate.) Suppose ISPs tell copyright owners: "Stop sending us your silly notices, and go pound sand. Section 512(a) protects us, and if our subscribers use BitTorrent to download every movie, TV show, and song on earth, that's your problem, not ours." Legally, they may well be within theirs rights to do exactly that. But politically, they would be virtually begging Congress to amend the DMCA in such away that their safe harbor would become considerably more dangerous. Better to cooperate with copyright owners at least to some extent -- if not all the way up to three strikes -- than to risk a new legal regime in which they would face massive liability if they do not take much stronger action against their infringing subscribers.

2) Because of contractual obligations -- or hopes of getting them. Major copyright owners often have business relationships with ISPs/cable operators/telecoms. For example: a studio may license its movies to a cable provider as part of a VOD service. The studio may say to the MSO: "We'll license you our movies. But you also run an ISP that provides Internet service to millions of subscribers, and neither of us should want to undermine our VOD service (where we split revenue) by having people downloading these very titles for free on BitTorrent. So, as part of our agreement, we want you to pass along infringement notices, institute graduated response, etc." ISPs/MSOs may push back, citing cost, technical difficulties, concern over customer privacy, or Internet freedom, but if they want the content badly enough, they will agree to some cooperation in copyright enforcement above and beyond what the DMCA actually requires. (Of course, ISPs will resist three strikes with all their might. Who wants to terminate customers paying $50 or more every month?)

3) Because -- as the WSJ puts it -- "the increasing burden of large amounts of music and movies [are] clogging [ISPs'] pipes." If forwarding infringement notices and taking stronger action against the worst of the infringers can free up bandwidth and thus increase connection speeds for everyone, then it's perhaps in the ISPs' interest to do it. (This is probably the weakest of the three reasons I've listed. ISPs don't really seem to mind when their customers use p2p systems -- and in fact the ability to download music and movies for free surely attracts many customers -- as long as such uses don't significantly disrupt the operations of their networks.)

So the studios and the record labels will continue to negotiate with the ISPs, and will probably reach various agreements to implement graduated response -- though I have real doubts whether three strikes will be implemented on a large scale. But remember that these negotiations are taking place because of business, long-term political, and technical reasons -- and not because the DMCA actually requires it.

Now that's punk rock

Young Manhattanite:

Text Message from Washington DC Circa 4:30pm

“Ian M[a]cKaye at Dean and Deluca now.”

I'm sure he was just checking out the merchandise.

The limits of the IP Czar's power

We sometimes overestimate what this is by [using] the word 'czar.'... If it was really a copyright czar, then illegal file sharers would be lined up and shot.

--Daryl Friedman, VP of Advocacy & Government Relations, National Academy of Recording Arts and Sciences.

(h/t internetnews.com)

Ex-BSA GC Neil MacBride considered for US Attorney slot; will lobbying role derail appointment?

The Washignton Post reports that former Business Software Alliance Vice President of Anti-Piracy and General Counsel Neil MacBride -- who only recently was appointed Associate Deputy Attorney General -- is now in the running to be the new US Attorney for the Eastern District of Virginia. And the Post seems downright fixated on the fact that MacBride once dared lobby for the BSA and, previously, for Verner, Liipfert (since swallowed by the firm now known as DLA Piper):

President Obama campaigned on a pledge to change Washington, vowing to upend the K Street lobbying culture, and at one point, he said lobbyists wouldn't work in his White House. Immediately after taking office, he imposed lobbying limits that have been hailed as historically strict. Although officials said MacBride's appointment would not violate those rules, some prosecutors and governmental watchdogs wonder whether it would violate their spirit.

"The issue is whether Obama is being consistent," said Melanie Sloan, a former prosecutor who heads Citizens for Responsibility and Ethics in Washington. "They wanted the American people to think they weren't going to hire any lobbyists, and that was never realistic."

The Post's focus on MacBride's past lobbying as a possible impediment to helming the US Attorney's Office strikes me as way overblown. As the article itself points out, he never lobbied the Justice Department while at BSA -- only the Senate. And crimes in MacBride's field -- software piracy -- represent a minuscule portion of federal prosecutions. I can't imagine that the need for his occasional recusal on such cases would disrupt the operations of the office in the slightest.

Even Sloan, one of the ethics mavens quoted by the Post -- who once worked with MacBride -- calls him "a really smart, good prosecutor." If that's the case, and he's the best man for the job, it would be a shame to let today's obsession with lobbyists derail his ability to serve.

If you're going to infringe President Obama's right of publicity...

Do you have to be racist about it?

See here:

And here:

(h/t UsefulArts)

Worst headline of the year award goes to...

p2pnet:  "DoJ interferes in new RIAA case."

It's "intervenes" -- not "interferes." 

And the rest of the article is no better. Such intervention is specifically authorized by 28 U.S.C. § 2403. And it's totally normal and routine -- administrations of all stripes virtually always defend the constitutionality of federal statutes. And -- contra p2p net -- there is zero evidence that any DOJ attorney failed to follow all ethics rules regarding former clients. And...I will now stop beating my head against this dead horse.

DOJ again intervenes to defend statutory damages from constitutional attack; and just what about Ray Beckerman's favorite cases?

The Department of Justice has again sought to intervene in defense of the constitutionality of statutory damages in a case called Sony v. Cloud, filing a brief very similar to the one it recently filed in the Joel Tenenbaum case.

Once again, anti-label litigator Ray Beckerman notes that DOJ brief does not cite his preferred legal authorities, which he cited in an amicus brief he filed on behalf of the Free Software Foundation in the Tenenbaum case:

Like the Tenenbaum brief, this brief likewise ignores Parker v. Time Warner, Napster, UMG v. Lindor, and Atlantic v. Brennan, and the Georgetown and University of Texas Law Review Articles, all cited in the amicus curiae brief of the Free Software Foundation in Tenenbaum.

I obviously can't read the minds of the DOJ attorneys who drafted the briefs, so I can't say for sure why they didn't cite Beckerman's authorities. But I can come up with some pretty good reasons why I probably wouldn't have cited them had I drafted the briefs myself.

First, especially for the non-lawyer readers, a little background on citing authorities ("authorities" being a blanket term that covers cases, statutes, law review articles -- and even blog postings). First, lawyers usually cite authorities that support their argument. Beckerman believes his authorities support his argument -- but they aren't helpful to the government's position (or to the labels'). Lawyers sometimes -- but far from always -- cite authorities that may on the surface appear harmful to their case, usually to distinguish them away or explain why they're not relevant or controlling. Several factors determine whether to cite such negative authority, including: 1) how closely related ("on point") is the case to the one being litigated; 2) whether the case is from the same jurisdiction; 3) how important is the court that issued the opinion (Supreme Court, Court of Appeals, District Court, etc.); 4) whether the case was published or unpublished; and 5) in the case of a law review article, which law review (Yale counts more than Podunk U.), and who wrote it (prominent professor, no-name professor, or student). The only instance I'm aware of where an attorney is actually required to cite contrary authority is where the case is from a controlling jurisdiction, and is directly adverse to the attorney's position.

So how do Beckerman's authorities fare under those factors? Not terribly well. Let's take a closer look:

Parker v. Time Warner, 331 F.3d 13 (2d. Cir. 2003) is a case from the Second Circuit, so it is not binding on the court in the Tenenbaum case (which is in the District of Massachusetts, in the First Circuit) or the Cloud case (in the Eastern District of Pennsylvania, in the Third Circuit). Neither the Tenenbaum nor Cloud courts have any obligation to follow Parker. Moreover, Parker is not a copyright case; rather, it was a case under the Cable Communications Policy Act of 1984 and several state consumer protection laws, regarding allegations of "selling and disclosing personally identifiable subscriber information to third parties." The opinion followed an interlocutory appeal of an order regarding class certification. And here's what the Second Circuit actually said:

And it may be that in a sufficiently serious case the due process clause might be invoked, not to prevent [class] certification, but to nullify that effect and reduce the aggregate [statutory] damage award. Cf. State Farm Mutual Auto. Ins. Co. v. Campbell, ___ U.S. ___, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003) ("The Due Process Clause of the Fourteenth Amendment prohibits the imposition of grossly excessive or arbitrary punishments on a tortfeasor."); BMW of North America, Inc. v. Gore,517 U.S. 559, 580, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996) (noting that the "most commonly cited indicium of an unreasonable or excessive punitive damages award is its ratio to the actual harm inflicted on the plaintiff."). At this point in this case, however, these concerns remain hypothetical. There has been no class certification motion filed nor any actual evidence presented that raises a reasonable possibility that principles of due process may restrict an ultimate damages award. Accordingly, we decline to consider what limits the due process clause may impose.

Note that the Parker court did not hold that the limits BMW and State Farm impose on punitive damages apply to statutory damages (it used only a "cf." (i.e., "only kinda sorta on point") citation); it explicitly declined to reach that issue as "hypothetical."

In re Napster, Inc. Copyright Litigation, 2005 WL 1287611 (N.D. Cal. 2005) is a copyright case. But it is an unpublished district court opinion from outside the First or Third Circuits, and thus of very limited precedential value in Tenenbaum or Cloud. And, like Parker, it is about class certification -- and just like in Parker, the Napster court did not hold that BMW/State Farm limit statutory damages. Instead, the court held that concerns about excessive damages were "speculative" at the class certification stage, and refused to address the issue: the "attempt to introduce concerns about excessive statutory damages into the class certification process [is] impracticable as well as logically flawed..."

UMG v. Lindor, 2006 WL 3335048 (E.D.N.Y.) -- which Beckerman himself litigated -- is also an unpublished district court opinion from outside the First or Third Circuits. In Lindor, the court granted the defendant's leave to amend her answer, rejecting at this early stage the record label plaintiffs' argument that a proffered affirmative defense challenging the constitutionality of large statutory damages awards was barred as a matter of law. As the court said, its task was very preliminary: "at this juncture, the court need only determine whether the an affirmative defense alleging that statutory damages are unconstitutionally excessive is frivolous." Because the labels had not cited law foreclosing the possible success of defendant's affirmative defense, and the defendant had introduced some pricing evidence in support of its argument, the court held that such a defense was "not frivolous," and thus that her answer could be amended. To be clear: the Lindor opinion does not hold that the BMW line of cases applies to copyright statutory damages; it merely held that such an argument was "not frivolous."

Atlantic v. Brennan, 534 F. Supp. 2d 278 (D. Conn. 2008), is published, but outside the First and Third Circuits. And the opinion addressed a motion for default judgment -- a very preliminary stage where arguments (and evidence) had not been developed. The court merely held that a constitutional due process challenge to statutory damages is one of several issues that had "possible merit" -- a far cry from an actual embrace of that argument.

Lastly, both of the law review articles Beckerman cites -- J. Cam Barker, Grossly Excessive Penalties in the Battle Against Illegal File-Sharing: The Troubling Effects of Aggregating Minimum Statutory Damages for Copyright Infringement, 83 Texas L. Rev. 525 (2004) and Blaine Evanson, Due Process in Statutory Damages, 3 Geo. J.L. & Pub. Pol’y 601 (2005) -- were written by law students. With all respect to the authors, courts generally accord little if any weight to student-written law review articles, and it is not at all surprising that DOJ did not cite them.

So, in sum, I see no good reason why DOJ (or the plaintiffs) should have cited the authorities Beckerman mentions. Of course I don't blame Beckerman for citing them -- they aid his cause, however marginally -- but his opponents were under no obligation to address them.

So, then what is the real state of the law on the application of the BMW/State Farm punitive damages doctrine to copyright statutory damages? The best summary is probably from the Sixth Circuit, in a 2007 case called Zomba Enters, Inc. v. Panorama Records, Inc., 491 F.3d 574 (6th Cir. 2007): "uncertain[]." Explained the court:

The Supreme Court has not indicated whether Gore and [State Farm v.] Campbell apply to awards of statutory damages. We know of no case invalidating such an award of statutory damages under Gore or Campbell, although we note that some courts have suggested in dicta that these precedents may apply to statutory-damage awards. See, e.g., Parker v. Time WarnerEntm't Co., 331 F.3d 13, 22 (2d Cir.2003) (suggesting that "in a sufficiently serious case," due process may require courts to reduce a statutory-damage award in a class action, and citing both Campbell and Gore); Leiber v. Bertelsmann A G (In re Napster, Inc. Copyright Litig.), Nos. C MDL-00-1369 MHP & C 04-1671 MHP, 2005 WL 1287611, at *10 (N.D.Cal. June 1, 2005) (unpublished) (citing Gore and Campbell); DirecTV v. Gonzalez, No. Civ.A.SA-03-1170 SR, 2004 WL 1875046, at *4 (W.D.Tex. Aug. 23, 2004) (unpublished) (citing Campbell); but see Lowry's Reports, Inc. v. Legg Mason, Inc., 302 F.Supp.2d 455, 459-60 (D.Md.2004) (concluding that Gore and Campbell do not limit statutory damages in copyright cases).

Regardless of the uncertainty regarding the application of Gore and Campbell to statutory-damage awards, we may review such awards under St. Louis, I.M. & S. Ry. Co. v. Williams, 251 U.S. 63, 66-67, 40 S.Ct. 71, 64 L.Ed. 139 (1919), to ensure they comport with due process. In such cases, we inquire whether the awards are "so severe and oppressive as to be wholly disproportioned to the offense and obviously unreasonable." Id. at 67, 40 S.Ct. 71. This review, however, is extraordinarily deferential—even more so than in cases applying abuse-of-discretion review.Douglas v. Cunningham, 294 U.S. 207, 210, 55 S.Ct. 365, 79 L.Ed. 862 (1935) (Congress's purpose in enacting the statutory-damage provision of the 1909 Copyright Act and its delineation of specified limits for statutory damages "take[] the matter out of the ordinary rule with respect to abuse of discretion"); Broad. Music, Inc. v. Star Amusements, Inc., 44 F.3d 485, 487 (7th Cir.1995) (interpreting the modern Copyright Act and noting "that the standard for reviewing an award of statutory damages within the allowed range is even more deferential than abuse of discretion").

***

If the Supreme Court countenanced a 113:1 ratio in Williams, we cannot conclude that a 44:1 ratio is unacceptable here. We acknowledge the Supreme Court's preference for a lower punitive-to-compensatory ratio, as stated in Campbell, but emphasize that this case does not involve a punitive-damages award. Until the Supreme Court applies Campbell to an award of statutory damages, we conclude that Williams controls, not Campbell, and accordingly reject Panorama's due-process argument.

Bottom line: I know of no case, from any jurisdiction, that has actually held that the BMW/State Farm doctrine limits statutory damages, let alone one that invalidated an award of copyright statutory damages (or foreclosed the possibility of such an award) as constitutionally excessive.

Nesson posts audio recording of judge ordering him not to record phone call

The Joel Tenenbaum case is getting even weirder. No, that is not exactly news. But still shall I blog.

Back on February 25, I reported that Tenenbaum's counsel, Harvard Law School Professor Charles Nesson, had sought to record an informal telephonic conference among counsel from both sides and Judge Nancy Gertner, but was told "in no uncertain terms that he was not to record the call." I always assumed that Nesson never actually switched on his recorder. For, as Judge Gertner later reminded the parties:

[A]ny such recording without permission of the participants, as well as the broadcast of such communications, runs afoul of Mass. Gen. L. c. 272 § 99.

(That statute provides that anyone who records a conversation without the consent of all participants can be sent to state prison for up to five years. To be clear: I express no opinion here whether Professor Nesson violated the statute.) Well, it turns out that my assumption was incorrect. Nesson did have his recorder running from the beginning of the conference call. And he did record the first 2 minutes, 25 seconds of the call -- right up to the point Judge Gertner finally convinced him to shut his recorder off.

So what did Nesson do with the recording? Discard it? Erase it? Turn it over to the court? Of course not! Nesson made it part of his evidence class' final exam! And now he has posted the exam questions (recording of Judge Gertner and opposing counsel included) to his blog, along with 2 of the top answers:

And how does the recording relate to the law of evidence? (Don't ask me -- I didn't go to Harvard Law School!) The first exam question consists of 2 audio recordings, followed by: "The question: Of what is this evidence?" The first .mp3 is some sort of remix of a man's voice with the kind of music you hear in the lobby of a W Hotel. (I have no idea what that's about. None.) The second .mp3 is the telephone conference with Nesson, the labels' lawyers (Daniel Cloherty, Timothy Reynolds, and Matt Oppenheim) and Judge Gertner.

After introductions, Judge Gertner opens the call by announcing, "This is an informal conference. I hope that no one is recording this. Am I right?"

Nesson: "No, you are not right, Your Honor. There is a recorder going in my offce, and I have approximately 20 students present in my office, listening."

Judge Gertner: "Your students can be present, but I don't want a recording.... Your students can listen, but it should not be recorded." Long. Pause. "OK?"

Long. Pause.

Nesson:  "I'd.... I feel bad about that. I truly do, because in some sense this is all about the Net being present in the court and being able to litigate a case in a way that can be open."

Judge Gertner: "I completely appreciate that. But there are moments of informality, however.... What is not fair is that one party record, and no one else does. I appreciate your concerns, Mr. Nesson, as you know. But under these circumstances, if you want to have a formal hearing, then we would suspend now, and go into the courtroom, and I would get my court reporter."

Nesson: "I take your point, and I accede."

Judge Gertner: "OK. All right. Then I have some questions..."

The recording ends there.

I report. (Thank goodness for Bartnicki v. Vopper!) You decide: "Of what is this evidence?"

(The top exam answer includes a mash-up of the telephone conference with more W Hotel music and lines from My Cousin Vinnie. A+ ?)

BNA debunks 'RIAA infiltration' theory of DOJ's Tenenbaum intervention

Great post by Thomas O'Toole at BNA's E-Commerce and Tech Law Blog thoroughly debunking the notion (see, e.g., here and here and here) that the Justice Department's intervention in defense of the constitutionality of statutory damages in the Joel Tenenbaum case was somehow the result of DOJ's infiltration by recording industry attorneys. Writes O'Toole:

Reading all of [the press coverage of the DOJ brief], you'd be forgiven for thinking that the Department of Justice had decided to support tough statutory damages for copyright infringement because it was infested with entertainment industry lawyers.

I don't think this view of the world aligns well with reality.

***

When the Department of Justice fields questions like this, it doesn't write on a clean slate. It doesn't check the results of the most recent election, it doesn't consult the views of high-ranking appointed officials, and it doesn't in any way embark on a quest for the "right" outcome. Rather, the traditional view within the Department of Justice is that it has an obligation to defend the constitutionality of all federal laws, except in the rarest of circumstances.

***

The Department of Justice's obligation is to defend the Copyright Act as Congress wrote it, not to re-evaluate or critique it. I am pretty sure the DOJ's submission would have looked the same, even if the office was not brimming with RIAA attorneys.

Especially unfounded is the suggestion that there was any "conflict[] of interest" in DOJ's filing of this brief. First, no one has presented a shred of evidence that any of the high-ranking DOJ attorneys who formerly represented record labels in private practice (i.e., Tom Perrelli or Don Verrilli) played any role whatsoever in the decision to intervene. None. And to suggest -- based on nothing except contempt for the labels -- that they have violated any of DOJ's or the Obama Administrations ethical rules regarding former clients is just reckless. Second, it is absurd to suggest that DOJ itself has a "conflict of interest" when some of its attorneys (even those not working on a particular matter) once represented parties to a case in which DOJ is now a party (or intervenor). DOJ has thousands of attorneys, many of whom once worked in private practice, and represented companies in every industry under the sun. The Department obviously could not operate if the presence of such lawyers constituted a "conflict of interest." There are rules in place to address this issue, and, again, absolutely no evidence that they were violated in this instance.

What took them so long?

GOP 12.

(h/t Ben Smith)

Gertner denies motion to reconsider webcast order as untimely, unnecessary

Judge Nancy Gertner has denied Joel Tenenbaum's motion for reconsideration of the webcast order that he won, ruling both that it was "late and without basis as he previously prevailed on the narrowcast issue in this Court." Full order here:

Judge Nancy Gertner: Electronic ORDER entered. The Defendant's Motion for Extension of Time [786] and Motion for Reconsideration [787] are DENIED. The Plaintiffs have declined to move for reconsideration of the Court's January 14, 2009 Order, preferring to rely on the pending proceedings in the First Circuit. While the Defendant has moved to reconsider, his motion is late and without basis as he previously prevailed on the narrowcast issue in this Court. The First Circuit has set a date for oral argument, currently scheduled for April 8, 2009, at 9:00 a.m., and has solicited amicus briefs. Significantly, given the nature of this appeal -- whether the district court may "narrowcast" a legal argument -- the First Circuit has indicated that the argument before it will be audiotaped and posted online after the fact. See First Circuit Calendaring Notice, March 10, 2009, Case No. 09-1090. There is no equivalent in the district court, hence the litigation in this case. (Gertner, Nancy)

Judge Gertner notes that the First Circuit's oral argument on the webcast issue will be available over the Internet. True, but how is that relevant to the issue addressed in her order (except, perhaps, as an expression of pique)? Keep in mind that Judge Gertner has quite a history with the First Circuit on the issue of judicial interaction with the media.

Labels again defend right to seek statutory damages in Tenenbaum case

The record label plaintiffs have filed their opposition to Joel Tenenbaum's motion to dismiss the plaintiffs' claim for statutory damages, arguing once again that the Constitution permits the range of statutory damages established by the Copyright Act. While the arguments here are not new, they are set out compellingly, and dispel some of the enduring myths about this case, including the falsehood that it is only about "seven songs" (it's also about the hundreds that Tenenbaum allegedly uploaded via his shared folder). As the brief's intro explains:

Plaintiffs sued Defendant based on substantial evidence that Defendant used the KaZaA file sharing program to upload (distribute) more than 800 sound recordings—including many of Plaintiffs’ copyrighted sound recordings—to potentially millions of other users on the file sharing network. Plaintiffs also allege that Defendant used KaZaA to download Plaintiffs’ copyrighted sound recordings from other KaZaA users. Although Defendant’s Answer denies liability, Defendant has largely admitted Plaintiffs’ allegations in his deposition, in pleadings, in the press, and in his letter to the Attorney General asking the government to intervene in the case.

Indeed, Defendant concedes that Exhibit B to Plaintiffs Complaint is a copy of his KaZaA shared folder and that he created and used the “sublimeguy14@KaZaA” username. Defendant further admits that he used similar file sharing programs for years before Plaintiffs caught him, starting with the infamous Napster file sharing program, and that he continued to engage in file sharing, switching from using KaZaA at home to using LimeWire when he was away at school. The evidence also shows that Defendant’s conduct was willful, and that Defendant knew what he was doing was wrong but did it anyway thinking he would not be caught.

In an effort to escape liability for his infringement, Defendant’s Motion seeks to overturn copyright law altogether, arguing that Congress somehow exceeded its authority by (1) creating a private right of enforcement and (2) allowing the victims of copyright infringement to seek statutory damages in lieu of actual damages. While Defendant and his counsel may be on a crusade to redraft the law to permit copyright infringement of music on the Internet, Plaintiffs are seeking to apply long-standing and well-grounded copyright law to address a real-life case with real-life economic and cultural consequences.

As demonstrated below, the Copyright Clause of the U.S. Constitution gives Congress the power “to determine the intellectual property regimes that, overall, in that body’s judgment, will serve the ends of the Clause.” Eldred v. Ashcroft, 537 U.S. 186, 222 (2003). The private enforcement of copyright laws by copyright holders and the availability of statutory damages are fundamental aspects of the intellectual property regime established by Congress. They reflect Congress’ rational decisions about how to achieve the goals of the Copyright Clause and Defendant has not and could not provide any factual or legal basis for challenging Congress’ decisions.

The hearing on this (and several other) motions is set for April 30. Whether that hearing will be webcast is...a subject that could fill volumes.

(h/t Recording Industry vs. The People).

Real Networks says it didn't anticipate litigation over DVD-ripping software

The studios and RealNetworks squared off in federal court Monday over Real's alleged spolitation of evidence in advance of the studios' lawsuit over the RealDVD ripping software. Real's defense to the alleged document destruction? It didn't expect to get sued, and thus didn't think it had to preserve potential evidence, reports Wired:

"We didn't think litigation was probable," Leo Cunningham, a RealNetworks attorney, told U.S. District Judge Marilyn Hall Patel during a brief hearing.

Not probable??? Real set out to develop software that enables the copying of DVDs and was not aware of Universal v. Corley? Of 321 Studios? Of Kaleidescape? If there is one ironclad rule of life, it is that if you run a business that gives off even a whiff of CSS circumvention, litigation is not just "probable" -- it is virtually certain. Real may have other viable arguments to stave off the studios' request for sanctions -- it's a bit hard to tell given all the redactions in the briefs -- but the "we-didn't-think-litigation-was-probable" defense doesn't pass my personal laugh test. What's next? A claim that the sun will rise tomorrow in the east is "speculative" and "uncertain"? More on the spolitation issue here.

The main event -- the hearing on the studios' motion for a preliminary injunction -- is set for April 1. Studios' brief here. Real's here. Again, redactions spoil all the fun.

Solons urge Obama to appoint IP Czar; Susan Crawford tapped for separate White House tech policy slot

National Journal's Tech Daily Dose reports that top Senators have written a letter to President Obama, urging him to quickly appoint the first-ever White House Intellectual Property Enforcement Coordinator -- better known as the "IP Czar":

As President Barack Obama's first 100 days whiz by, Senate Judiciary Chairman Patrick Leahy, ranking member Arlen Specter, and Sens. Evan Bayh, D-Ind., and George Voinovich, R-Ohio, are pressuring the White House to make intellectual property protection a priority. The foursome who was the driving force behind last year's PRO IP Act, which former President George W. Bush signed in October, wrote to Obama last week urging him to nominate an IP enforcement coordinator. The position within the Executive Office of the President was created in their legislation and "can improve the effectiveness and efficiency of the administration's efforts to protect American intellectual property," they wrote in a letter obtained by Tech Daily Dose.

According to the Dose -- as well as the Compliance Matters blog -- speculation on the identity of the IP Czarina continues to focus on USTR staffer Victoria Espinel and IFPI Executive Vice-President for Global Legal Policy Shira Perlmutter, formerly a top IP attorney at Time Warner.

In other appointments news, the Dose reports that Obama will tap law professor Susan Crawford for a White House tech policy job:

She will likely hold the title of special assistant to the president for science, technology, and innovation policy, they said. Crawford, who was most recently a visiting professor at the University of Michigan and at Yale Law School, was tapped by Obama's transition team in November to co-chair its FCC review process with University of Pennsylvania professor Kevin Werbach. Her official administration appointment has not been formally announced. Crawford may be best known for her work with the Internet Corporation for Assigned Names and Numbers, the California-based nonprofit group that manages the Internet address system. She served on ICANN's board for three years beginning in December 2005.

What will Crawford's priorities be? Here's what she had to say in a blog post from last Oct. 7:

Surely a high-priority item for any new President will be looking hard at public long-term infrastructure investment - not just open-access municipal fiber (although that’s central), but also basic research, graduate education in the sciences, anything that will help us address an increasingly hot, flat, and crowded world with new ideas.