Obama May Follow Bush's 'Tracks' In Pursuing File-Sharing Lawsuit

by Wendy Davis, Feb 24, 2009, 7:31 AM

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The Obama administration is considering whether to side with the recording industry in a lawsuit against an alleged file-sharer, as the Bush administration did in 2007.

Last week, the Justice Department filed a motion in U.S. District Court in Pennsylvania requesting a March 25 deadline to decide "whether to intervene in this matter to defend the constitutionality of the statutory damages provision of the Copyright Act." Judge Cynthia Rufe granted that request Friday.

In its lawsuit, the Recording Industry Association of America alleges that Denise Cloud infringed copyright by sharing tracks on a peer-to-peer network. Cloud asked the court to dismiss the case and rule that the damages sought by the RIAA are unconstitutional. The statute typically provides for damages of between $750 and $30,000 per willful infringement, but also allows for damages of up to $150,000.

"Plaintiffs are asking for damages that are many times over any damage they would have sustained or any lost profits that they might have enjoyed," Cloud argued to the court. "Digital audio files are normally sold on the internet for 99 cents ... Here, the plaintiff asks for $150,000 per infringement. Asking for this level of statutory damages is a relief that this court cannot grant as constrained by the U.S. Constitution."

Two years ago, Jammie Thomas made a similar argument. She moved to set aside a $220,000 jury verdict against her on grounds that the award--which amounted to more than $9,250 per track--was disproportionate given that tracks were sold on iTunes for 99 cents each.

In that case, the Department of Justice sided with the RIAA and argued that the actual losses suffered by the record industry might have been more than 99 cents per track, because more than one person might have downloaded the songs. "It is unknown how many other users--'potentially millions'--committed subsequent acts of infringement with the illegal copies of works that the defendant infringed," the Justice Department wrote. "Accordingly, it is impossible to calculate the damages caused by a single infringement, particularly for infringement that occurs over the Internet."

U.S. District Judge Michael Davis in Duluth, Minn. declared a mistrial for other reasons, but he urged Congress to revise the copyright law's damages provisions. "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," he wrote.

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