Tag Archives: lawsuit

DIRECT REPORTING: Tenenbaum oral argument

Posted on by

A few hours ago, I attended oral arguments here in Boston before the First Circuit Court of Appeals in Sony BMG Music Entertainment v. Tenenbaum (Wikipedia backgrounder, appellate briefs here).  To summarize, several record labels sued Joel Tenenbaum for sharing music files on a peer-to-peer service, and Tenenbaum lost at trial.  However, trial court Judge Nancy Gertner reduced the jury verdict of $675,000 against Mr. Tenenbaum down to $67,500.

Both sides appealed.  The labels framed the sole issue on appeal as:

Whether the district court erred by holding that the jury’s award of $22,500 per work for willful infringement of 30 copyrighted works violated the Due Process Clause, even though that award is well within the range of statutorily prescribed damages awards for willful copyright infringement and even within the statutory range for non-willful infringement.

In contrast, defendant Tenenbaum framed the issues as:

1. Is the award of damages against the defendant unconstitutionally excessive?

2. Was the jury properly guided by the trial judge’s instructions?

3. Does the statute under which the defendant was prosecuted apply to individual noncommercial consumers?

4. Does 17 U.S.C. § 504(c) remain operative in the wake of Feltner v. Columbia Pictures Television, Inc., 523 U.S. 340 (1998)?

Today’s hearing took place before a three-judge panel consisting of Chief Judge Sandra L. Lynch, Judge Juan R. Torruella, and Judge O. Rogeriee Thompson.  In addition to the plaintiffs and defendants, the United States (as intervenor) and the Electronic Frontier Foundation (as amicus curiae) presented oral arguments.

Based on the judges’ questions and demeanor at oral argument, my impression is that Joel Tenenbaum faces an uphill battle and is likely to lose his appeal.  I don’t have a transcript of the proceedings, but the following stands out from my notes and memory.

Chief Judge Lynch clearly had no tolerance for the defense’s contention that “no one thought” the statutory penalties for copyright infringement would ever apply to “consumers”.  She pointed out that the statute appeared to apply to consumers, eliciting a concession from Tenenbaum’s counsel that statutory copyright penalties were not facial unconstitutional.  This left the defense with little more than a half-hearted argument that the jury verdict was improper here because the copyright statute originally contemplated damage calculations by judges.

Judges Torruella and Thompson seemed somewhat more suspicious of the record labels’ arguments, but it was unclear whether these suspicions would help Tenenbaum win his case.  Judge Torruella asked the labels’ lawyer whether “lost sales” would provide a useful measure of damages, to which he replied that damages should be commensurate with the “lost of value of the copyright”.  He argued that file-sharing in the aggregate caused enormous economic losses to the labels because it essentially put the music “in the public domain.”  (Why Joel Tenenbaum should be personally responsible for the actions of thousands or millions of other file-sharers remained the obvious question he never managed to answer.)

For her part, Judge Thompson questioned whether appellate courts could ever find that a jury for statutory damages in a copyright infringement action to be excessive if it fell within the statutory range ($750 to $150,000 per work infringed).  The labels’ counsel did concede copyright damage awards were “not immune from Williams [Philip Morris USA v. Williams, 549 U.S. 346 (2007)] review” but maintained that such a problem would be “rare” and that this was not that case.

We likely won’t have the First Circuit’s decision for several months, so there’s still plenty of time to speculate about what the outcome will be.  I’ll continue posting as I have additional thoughts.

Update 4/5/2011:

Lawsuit over “super-majority white neighborhoods” in Atlanta suburbs

Posted on by

Atlanta is often held up as an example of Southern sprawl. The Atlanta Journal-Constitution reports on a new lawsuit filed against some recently created suburban communities north of Atlanta:

The Georgia Legislative Black Caucus filed a lawsuit Monday against the state of Georgia seeking to dissolve the city charters of Dunwoody, Sandy Springs, Johns Creek, Milton and Chattahoochee Hills…

The lawsuit, filed in a North Georgia U.S. District Court Monday, claims that the state circumvented the normal legislative process and set aside its own criteria when creating the “super-majority white ” cities within Fulton and DeKalb counties. The result, it argues, is to dilute minority votes in those areas, violating the Voting Rights Act of 1965 and the Fourteenth and Fifteenth Amendments to the Constitution…

Sandy Springs, created in 2005, is 65 percent white and 20 percent black. Milton, formed a year later, is 76.6 percent white and 9 percent black. Johns Creek, also formed that year, is 63.5 percent white and 9.2 percent black. Chattahoochee Hills, formed in 2007, is 68.6 percent white and 28 percent black, while Dunwoody, created in 2008, is 69.8 percent white and 12.6 percent black.

Emory University law professor Michael Kang said the case is unique because the Voting Rights Act focuses on redistricting, whereas this lawsuit challenges the legality of cities. Kang, who has not reviewed the case in its entirety, said the plaintiffs will likely have to show evidence of discriminatory purpose to have a strong claim. Kane said the case has interesting implications.

“If we look at this realistically, there is some white flight going on. The creation of these Sandy Springs-type cities enables white voters to get away from black voters,” he said. “It does strike me that the Voting Rights Act might have something to say about this, but it’s unknown what the courts will say about it.”

There is little doubt that there are exclusionary practices that take place in suburban communities, whether this is through zoning for particular uses (typically to avoid apartment buildings or lower-income housing – read about a recent debate over this in Winnetka, Illinois) or high real estate prices.

But the idea that incorporation itself is exclusionary is an interesting idea. Certainly, this is done along class lines: wealthier communities have incorporated in order to help protect their status and boundaries. Cities and suburbs have a long history of annexation in order to expand their own boundaries and their tax base (see this argument that Detroit should annex surrounding areas to help solve some of its problems). But was this done intentionally in regards to race (as opposed to just class or other issues) in these Atlanta suburbs? And what sort of evidence would a court find persuasive in this argument?

Winklevoss twins continue lawsuit against Facebook

Posted on by

The key conflict in The Social Network (reviewed here and here) is the lawsuit that the Winklevoss twins bring against Facebook founder Mark Zuckerberg. This lawsuit is continuing as the Winklevosses seek a larger settlement:

If they prevail, their legal appeal would overturn the settlement, now worth in excess of $160 million because of the soaring value of the privately held company.

The Winklevosses won’t say exactly how much they would seek in their high-stakes grudge fest with the billionaire Facebook founder, but by their own calculations they argue they should have received four times the number of Facebook shares. That would make any new settlement worth more than $600 million based on a recent valuation of Facebook at more than $50 billion…

Facebook has won multiple court rulings, and legal experts say the Winklevosses are likely to lose this one too…

The controversial origins of Facebook — who actually founded it and how — have been the subject of renewed debate since Hollywood offered its dramatization of the conflicting stories from the Winklevosses, both portrayed in “The Social Network” by actor Armie Hammer, and former Zuckerberg friend and Harvard classmate Eduardo Saverin, portrayed by Andrew Garfield. In 2005, Saverin sued Facebook for diluting his stake in the company and reportedly reaped a $1.1-billion settlement.

Zuckerberg has called the film, which received eight Academy Award nominations including best picture, “fiction.” In it, his character tells the Winklevosses: “If you guys were the inventors of Facebook, you’d have invented Facebook.”

But that’s exactly what the Winklevosses said they did.

The article suggests that the Winklevosses can’t really lose here: if the courts say they shouldn’t receive more money, they still get to receive the initial settlement. We can ask how much The Social Network influenced the decision to seek more money. There were relatively few people in the media who concentrated on the veracity or one-sided nature of this story. For many who saw this Oscar-nominated film, Zuckerberg looks like a jerk.

Of course, this movie and portrayal should have little influence on the courts. And the Winklevosses say they have new evidence for the courts to consider. But I suspect the case was brought in part because of the positive portrayal of the Winkevosses in this film. If this case were in the court of public opinion (and perceptions), would the Winklevosses win?

40,000 ways to file a lawsuit

Posted on by

How do you file lawsuits against 40,000 people you think are infringing your copyrights?  Sounds like the answer is “one at a time”:

Thousands of unnamed “John Does” in P2P file sharing lawsuits filed in California, Washington DC, Texas, and West Virginia have been severed, effectively dismissing over 40,000 defendants. The plaintiffs in these cases must now re-file against almost all of the Does individually rather than suing them en mass.

Let’s unpack this.  Copyright owners often don’t know the names of people they suspect of using the Internet to infringe their works — they only know that such-and-such an Internet protocol address allegedly accessed a pirated file of their content.  In order to match that address with a particular person, they often have go to court to compel an Internet service provider to tell them what account/person is associated with that address.  They can only sue individuals once they have actual names.

Copyright owners have been in the habit of suing thousands of “John Doe” IP addresses in one lawsuit and then using those names to settle quickly:

These rulings may have a significant impact on the copyright trolls’ business model, which relies on being able to sue thousands of Does at once with a minimum of administrative expense. The cost of filing suit against each Doe may prove prohibitively expensive to plaintiffs’ attorneys who are primarily interested in extracting quick, low-hassle settlements.

In my view, courts’ rejection of this tactic brings some procedural balance back to copyright infringement lawsuits.  Copyright owners often sue alleged infringers in courts that are convenient for the owner, and this can effect a substantial injustice.

Perhaps a concrete example is in order.  Let’s assume an individual defendant that (1) is unquestionably innocent and (2) lives in Iowa.  Let’s further assume the plaintiff copyright owner is a movie studio based in California who wants to sue her in Los Angeles.  As a practical matter, this defendant has a difficult choice.  Litigation is always inconvenient and expensive, but hiring a California-based attorney from Iowa and flying out to Los Angeles is probably more than a typical defendant can afford.  Under these circumstances, she may pay the studio a $2,000 settlement even though she’s innocent just to make the matter go away.  After all, it’s pretty easy to burn through $2,000 with a lawyer and travel expenses.

Given this procedural tilt favoring copyright owners, it seems only fair that they be required to file their suits one at a time.  If a copyright owner doesn’t think her claim is even worth a filing fee, she probably shouldn’t be filing that lawsuit in the first place.  Copyright was, after all, designed “To promote the Progress of Science and useful Arts”, not to provide extra-judicial windfall profits to content owners.

Thanks to Matt Berntsen for the original link to the EFF write-up.

A $4000 mistake

Posted on by

Talk about turning lemons into lemonade.  A Canadian-based copywriting firm is attempting to parlay a very expensive mistake into favorable publicity:

“Like many other creative types in the web industry, our copywriters were not clear on image copyright laws, and we were taught an expensive lesson,” said Rick Sloboda, Senior Web Copywriter at Webcopyplus, which provides designers and businesses optimized web content. “We’re sharing our story, so others can learn from our experience and avoid the same mistake.”

In May, 2010, with the assumption Web images without copyright notices were “public domain” and free to use, a Webcopyplus copywriter used Google images to find an unmarked 400 x 300 pixel scenic photo to complement an article for a tourism client’s blog.

Webcopyplus has posted additional details on their blog, as well as some resources for obtaining stock photography in a way that won’t get one sued (including Creative Commons photos available via Flickr).