Summary
A federal district court's ruling has taken away -- at least temporariily -- a key legal weapon in the fight against music piracy online. The court's decision will make it harder to stop file sharing on peer-to-peer networks -- a prime source of music piracy -- by demonstrating that it violates the Copyright Act. Besieged by, and in decline from, downloads by the 10s of millions from music placed online without compensation or permission, the Big Four record labels, and smaller independent labels, can ill afford to lose any tool for striking back against piracy. The decision also has implications for other content providers, from film studios to software and videogames producers.
Analysis
In overturning a jury verdict and ordering a new trial, a federal district court in Minnesota has swept away an important legal tool in the long and, so far, losing fight to stanch the flow of massive music piracy online. This is a setback for the beleaguered recording industry, and has implications for movie and other information and entertainment companies.
In Capitol Records v. Jammie Thomas, the court threw out a jury verdict against Ms. Thomas on technical grounds but, in doing so, ruled that "making available," or offering, copies online, was not sufficient to sustain a violation of the Copyright Act's right of distribution. Distribution is one of the exclusive rights that the law grants to copyright owners. To prove distribution, traditionally a plaintiff would have to show that copies had actually been disseminated; in the case of online distribution, actually downloaded or otherwise shared.
Ms. Thomas uploaded her music files to Kazaa, a peer-to-peer file sharing network, but took no steps to disseminate them. By merely passively placing those files online, she made them available but did nothing more. Despite two digital copyright treaties, to which the United States is a signatory, specifying a "making available" right, the court held that right was not part of our domestic law because Congress had not created it (the treaties are not "self-executing; they require amendments to US law to have their various elements become effective here). Hence, Ms. Thomas had not violated the distribution rights of Capitol Records and other plaintiffs in this case.
This legal setback is significant, but not crippling, to the campaign against music and other piracy online. The court held that Ms Thomas did violate the reproduction right, another exclusive right of copyright owners under the Copyright Act. Also, it is reasonable to anticipate an appeal, likely after Ms. Thomas' retrial is completed. Finally, this is the ruling of one district court, which will have no actual precedential impact beyond that district until and unless other courts rule similarly.
But while its technical legal impact will be limited, it is nonetheless important for at least three reasons. First, it is the first court to rule so directly on the question of the "making available" concept in the context of the distribution right. That will mean it will have a psychological impact on legal proceedings aroung the country; its holding and reasoning on this point introduced into deliberations by judges and juries in other copyright cases -- even though it would have no controlling legal effect.
Second, with a "making available" right, a record company wouldn't have to go out and find someone who actually downloaded the illegally offered song to prove that a violation of the distribution right occurred. In other words, the dissemination part of proving that violation would be dispensed with, thus making it much easier to prove the law had been broken. Record companies in a constant battle against debilitating piracy need every bit of legal help they can get to try to stop the online piracy that is draining their resources and accelerating their decline.
Third, film studios, videogame manufacturers and others with similar risks of exposure to online piracy, would also benefit from an interpretation that "making available" copies would violate the distribution right. They are not as exposed as record producers only because their products require much broader bandwidth than music, and they have learned from the difficult position and responses to it of the record labels. Their concerns may grow as bandwidth and download speeds continue to increase.
So, the bottom line is that this deicison is hardly Armegaddon for music and other content producers. But it is a disappointing setback in the long twilight struggle against illegal copying online.
