Last month, Gigi wrote about how important it was not to prejudge President Obama's nominees to high level positions in the Justice Department. She pointed out that lawyers are paid to advocate for their clients, and just because a lawyer takes a client does not mean that they are personally committed to their position. Unfortunately, an early sign from the Justice Department seems to indicate that Gigi may have been too generous with her defense. Under their watch, the government has intervened to argue that damages for noncommercial copyright infringement of between 2,100 and 415,000 times actual damages are constitutional and reasonable.
At issue is the case of SONY BMG Music Entertainment v. Tenenbaum. This another of the cases in which the RIAA is suing users of P2P networks for copyright infringement. This case in particular has gotten a great deal of attention because Harvard Law Professor Charles Nesson and his students have been actively participating in the defense.
Professor Nesson has not joined the case to argue that the defendant, Joel Tenenbaum, is innocent or that he did not infringe copyright. Instead, Tenenbaum's defense is arguing that the statutory damages that the RIAA is asking for are unconstitutional.
Copyright law currently provides copyright plaintiffs with two options. The first option is to prove how much damage the individual has caused and force the individual to pay that back in damages. The second option is to invoke statutory damages. With statutory damages, copyright owners do not have to prove any actual damages. Instead, they can simply demand that the court award them an amount specified in the statute.
Not surprisingly, copyright owners tend to prefer the second option. First, it can be hard to prove actual damages caused by a noncommercial infringer. Second, even if an owner were to prove damages, it is unlikely that the damages will be very high. After all, how much harm is done to a record company when someone illegally downloads a song? Assuming that the downloader would have purchased the song in the first place, the record company lost no more than the $0.99 they would have made from an iTunes download. Of course, not all $0.99 of that iTunes purchase goes to the record company, so in reality they company would get even less. With statutory damages, record companies do not have to prove any losses. Instead, they can just ask for a court to apply the damages in the statute.
The damages in the statute are significant. An innocent infringer must be punished with $200 in damages. In the case of an average infringer, the court can decide to impose fines of anywhere from $750 to $30,000 per work. Willful infringers can be fined as much as $150,000 per work infringed.
Tenenbaum's defense argues that these fines – up to $150,000 for each song copied – are so severe as to be unconstitutional. They cite Supreme Court cases that are widely understood to indicate that any punitive damages of more than ten times actual damages violate due process. Essentially, Tenenbaum is arguing that such massive statutory damages act as punitive damages, giving private organizations like the RIAA prosecutorial power to punish individuals who may have harmed them.
The Justice Department, headed by the former content industry lawyers appointed by President Obama, argues that the damages are well within reason and should not be considered unconstitutional. Instead of relying on recent Supreme Court cases addressing reasonable punitive damages, the Government relies on a case from 1919 dealing with statutory damages and railroads. That is fair enough – this is a case about statutory damages, not punitive damages. According to the government, the proper test for the constitutionality of the damages is if they are “so severe and oppressive as to be wholly disproportioned to the offense and obviously unreasonable.” In their opinion a $150,000 fine for the infringement of each $0.99 song does not meet that standard.
Ultimately, PK's concern is not solely with the outcome of this particular case. It is up to the court to weigh the dueling constitutional arguments. Even if Tenenbaum does not carry the day his case is noteworthy. It will have helped to shine a spotlight on how far current statutory damages in copyright have strayed from reason. Whether by judicial order or statutory amendment, something must be done to rationalize the relationship between actual and statutory damages for copyright infringement.
We are also concerned about this case for the same reasons Gigi mentioned in early February: the Obama Administration needs to strive for balance in appointees. A Justice Department led by former content lawyers appears inclined to be reflexively supportive of the content industry. This is not to say that this is a problem unique to the Obama Administration – past administrations have taken similar positions. However, just because a policy existed in the past does not mean that it should be continued into the future. I wonder if the decision to intervene in this case would have been different if there had been someone with a history of representing both sides in copyright debates in the room.