In the case of Sony BMG Music Entertainment et al. v. Tenenbaum, record label Sony BMG, along with Warner Bros. Records, Atlantic Records, Arista Records, and UMG Recordings, accused Joel Tenenbaum of illegally downloading and sharing files in violation of U.S. copyright law. It was only the second file-sharing case (after Capitol v. Thomas) to go to verdict in the Recording Industry Association of America's (RIAA) anti-downloading litigation campaign. (The vast majority of cases having been settled out of court.[1]) After the judge entered a finding of liability, a jury assessed damages of $675,000, which the judge reduced to $67,500 on constitutional grounds, rather than through remittitur.
After both parties appealed, the First Circuit Court of Appeals reinstated the original damage award of $675,000 and remanded the case to the District Court, ruling that the judge should have avoided the constitutional issue by first considering remittitur. The Supreme Court refused to hear Tenenbaum's appeal arguing against the remand. A new District Court judge then found no cause for remittitur, and held that the statutory damage award was constitutional. Tenenbaum again appealed to the First Circuit, which in June 2013 upheld the award.
Background
Joel Tenenbaum's issues started as a college student where he was accused of spreading songs to millions of people by uploading them onto P2P networks like Napster and Limewire.[2]
The record companies alleged they had given him warnings of these crimes prior to the trial and told him to stop what he was doing right away. They claim he had given a wide array of excuses as to why he was still distributing these songs.
Tenenbaum was not the only one who had been given a lawsuit as, after September 8, 2003, there were thousands of similar lawsuits being filed. Over 5 years the number of cases surpassed 35,000 and caused the court to apply the Copyright act to the digital realm.[3]
Court case
Pre-trial
In 2003, a demand for $3,500 was received at Tenenbaum's parents' house for songs that the then 20-year-old allegedly downloaded. Tenenbaum explained his financial situation as a student and offered a partial payment of $500, which was ultimately rejected.[4][5]
After several other correspondences, the five record labels later filed suit against Tenenbaum in August 2007, accusing him of copyright infringement for the sharing of thirty-one music files via Kazaa, and demanding statutory damages. Tenenbaum then offered the plaintiffs the original complaint amount of $5250, but the music companies declined, and subsequently demanded "double."[5][6] In a pre-trial conference in June 2008, Tenenbaum's mother stated "my son was offered $12,000, your Honor, and every time we appear that goes up." The plaintiffs responded that Tenenbaum had filed several motions with the court, and that "as our legal fees go up, so will the settlement amount that we offer."[7]
A few months before the trial, the court dismissed Tenenbaum's abuse of process claim against the plaintiffs, excluded four of his expert witnesses, and denied his motion to exclude all MediaSentry evidence, which could be used to link the file-sharing to his computer. Jurors who used social networks to obtain music were also excluded. Harvard Law School professor Charles Nesson, Tenenbaum's pro bono attorney, claimed this was unfair as Tenenbaum no longer had a trial by a jury of peers.
In the month before the trial, Nesson petitioned the Court to be allowed to present a fair use defense to the jury. Although the Court considered the late addition of the defense "troubling," the Court allowed limited discovery to proceed over the plaintiffs' strenuous objections. However, eight hours before trial, upon consideration of both parties' arguments, the Court issued a summary judgment against the defense. In its detailed response five months later, the Court described Nesson's fair-use arguments as "perfunctory".[8]
Trial
The case went to trial in the last week of July 2009.[9]
Nesson argued that Tenenbaum's situation was similar to the Napster situation in 1999 and that he did not intend any harm nor understood the copyright laws.[10] The plaintiffs claimed Tenenbaum repeatedly infringed copyright laws and that he had taken actions to evade the law.[11]
During the trial, Tenenbaum answered "yes" to the plaintiff's counsel's question "Mr. Tenenbaum, on the stand now are you now admitting liability for downloading and distributing all 30 sound recordings that are at issue and listed on Exhibits 55 and 56 of the exhibits?"[12] The next day, Judge Nancy Gertner issued a directed verdict, instructing the jury that liability was no longer at issue; they only needed to determine an appropriate amount for damages, which would be partly based on whether they believed the infringement was "willful."[13]
On July 31, 2009, the jury awarded $675,000 to the music companies, taking a middle option between the statutory minimum ($22,500 total) and maximum ($4.5 million) for willful infringement. Nesson had planned to appeal; if the verdict had stood, Tenenbaum had planned to file for bankruptcy.[5][14]
Post-trial
On July 9, 2010, Judge Gertner reduced Tenenbaum's fines to $67,500,[15] holding that arbitrarily high statutory damages violate due process and are thus unconstitutional,
far greater than necessary to serve the government's legitimate interests in compensating copyright owners and deterring infringement. In fact, it bears no meaningful relationship to these objectives. To borrow Chief Judge Michael J. Davis' characterization of a smaller statutory damages award in an analogous file-sharing case, the award here is simply 'unprecedented and oppressive.'[16]
On July 21, 2010, both parties filed notice to appeal the ruling.[17]
Oral arguments in the appeal were held in the First Circuit on April 4, 2011.[18]
The appeal broached several topics, one of which was the District Court's authority to reduce a statutory damage award on constitutional grounds. Two Supreme Court cases were cited: BMW of North America, Inc. v. Gore and St. Louis, I.M. & S. Ry. Co. v. Williams. Tenenbaum argued for the application of the Gore standard, which regards punitive damage awards as eligible for reduction, and allows actual damages to be taken into consideration. The record companies and the U.S. Government countered that statutory damages and punitive damages are different things, so the Williams standard, which is less stringent than Gore, should apply.
On September 16, 2011, the First Circuit rejected all of Tenenbaum's arguments, and, avoiding the question of which standard to apply, held that the District Court had erred by ruling on the constitutionality of the jury award before considering whether the award should be reduced by common law remittitur.[19] It vacated the reduction in damages, reinstated the original $675,000 award, and remanded to the District Court for reconsideration of the remittitur question[19] by another judge, since Gertner retired.[20] Gertner's retirement followed her appointment at Harvard Law, where she is now a colleague of Professor Nesson.[21]
On 31 October 2011, attorneys for Tenenbaum filed a petition for a rehearing in the First Circuit Court of Appeals because "it is unconstitutional to instruct a jury that it can return an unconstitutionally excessive award. To instruct the jury that it may ascribe an award in a range of up to $4,500,000 against a noncommercial copyright infringer is punitive, excessive, not authorized by statute, and a denial of due process."[22] On November 17, 2011, the Court denied the request to rehear the case.[23]
Tenenbaum's lawyer then asked the Supreme Court to hear the case, arguing that the Appeals Court should not have sent the case back to District Court, because the plaintiffs would likely reject an award reduced by remittitur and would opt for a retrial, pushing Tenenbaum "down an endless litigation rathole" on a "retrial merry-go-round." The Supreme Court declined to hear the case, leaving no option but for the District Court to decide whether to reduce the award via remittitur.[24][25]
Post-appeal
In early 2012, the parties submitted briefs and responses to the District Court regarding the remittitur and due process issues.[26][27][28][29][30][31] The plaintiffs asked the court to strike or disregard Tenenbaum's reply briefs, which, in violation of procedure, contained facts and arguments that were not in his opening brief.[32]
On June 5, 2012, Tenenbaum requested a new trial to determine a new damage award.[33] Although Judge Gertner and the Court of Appeals had both already rejected this argument when it was made on constitutional grounds,[16][19][23] Tenenbaum reasoned that if the District Court feels that the jury award was unjust, this time for any reason, then the statutory range given in the instructions to the original jury was unjust, and the instructions were therefore faulty and a new damages-amount trial is warranted.[33] The record companies asked the court to strike or reject Tenenbaum's request, maintaining that the award was not excessive, and arguing that the trial request had no legal basis and was untimely since it contravened the Appeals Court's remand for consideration of remittitur.[34]
On August 23, 2012, Judge Rya W. Zobel, Judge Gertner's successor, rejected Tenenbaum's request for a new trial as untimely, and disregarded the facts and arguments improperly raised in Tenenbaum's reply briefs.[35]
In the same order, Judge Zobel acted on the remand, holding that reduction of the award via remittitur wasn't warranted, since the jury had ample reason to find that Tenenbaum willfully infringed.[35] A footnote in the First Circuit's remand stated that in this situation, the District Court and the parties to the case "will have to address the relationship between the remittitur standard and the due process standard for statutory damage awards."[19] Judge Zobel ruled in favor of the plaintiffs, noting that Gore had never been applied to statutory damages; reasoning that two of the three "guideposts" in Gore couldn't logically apply to statutory damages; and citing many examples of case law that support applying Williams.[35] The court also cited the legislative history of the Digital Theft Deterrence and Copyright Damages Improvement Act of 1999, which raised the statutory damage limits for several reasons, one of which was to be a more effective deterrent in response to widespread copyright infringement on the Internet.[35][36][37]
Given the deference afforded Congress' statutory award determination and the public harms it was designed to address, the particular behavior of plaintiff in this case [...] and the fact that the award not only is within the range for willful infringement but also below the limit for non-willful infringement, the award is neither "wholly disproportioned to the offense" nor "obviously unreasonable." It does not offend due process.[35]
Accordingly, the District Court held that $675,000 award, as previously reinstated by the First Circuit Court of Appeals, stands.[35]
Tenenbaum submitted notice of appeal to the First Circuit on September 17, 2012.[38] In June 2013, the First Circuit upheld the statutory damages award:[39]
The evidence of Tenenbaum's copyright infringement easily justifies the conclusion that his conduct was egregious. Tenenbaum carried on his activities for years in spite of numerous warnings, he made thousands of songs available illegally, and he denied responsibility during discovery. Much of this behavior was exactly what Congress was trying to deter when it amended the Copyright Act. Therefore, we do not hesitate to conclude that an award of $22,500 per song, an amount representing 15% of the maximum award for willful violations and less than the maximum award for non-willful violations, comports with due process.[40]
Tenenbaum subsequently filed for Chapter 7 bankruptcy in November 2015 and the court granted a discharge of the $675,000 judgement against him in March 2016.[41]
Admonishments by the court
Throughout the case, Judge Gertner issued numerous admonishments of both the plaintiffs and the defense, and implored Congress to take action to stop these kinds of lawsuits. Examples follow.
Against the plaintiffs
In the June 2008 hearing, when discussing Tenenbaum's need for a lawyer, Gertner expressed dismay at the plaintiffs' tactics in the over 133 file-sharing cases heard in her court at that point:[7]
There is a huge imbalance in these cases. The record companies are represented by large lawfirms with substantial resources. The law is also overwhelmingly on their side. They bring cases against individuals, individuals who don't have lawyers and don't have access to lawyers and who don't understand their legal rights. Some [...] read the summons, and they haven't the foggiest idea what it means and don't know where to go, and they're defaulted, and they owe money anywhere from $3,000 to $10,000 as a result. Sometimes they answer and get counsel, and because the law is so overwhelmingly on the side of the record companies, there's a negotiated settlement which is slightly lower than the settlement the people that are unrepresented have been getting—in other words, with a lawyer you can get some kind of leverage, but it is a delaying game in some sense. [...] It simply doesn't make sense to fight them as an individual, per se, and to some degree you run the risk that the longer you [...] fight without having a basis to do so, the plaintiff's legal fees go up and up. I can't say this is a situation that is a good situation or a fair situation; it is, however, the situation. [...] If you really wish to stand and fight, you need to have legal representation because otherwise all you're going to do is stand in place, their fees go up and we'll end this case with the higher end of the statutory damages rather than the lower end. [...] The best that I can do given the state of the law and the unequal resources is to try to level the playing field as best I can, to try to find lawyers. The lawyers look at a case in which the law is so overwhelmingly on the side of the record companies and say 'why should we get involved?' So the group of lawyers that we're trying to get to represent you [...] is not a very large group, which is why we've had difficulty.[7]
Gertner went on to admonish the plaintiffs directly:
Counsel representing the record companies have an ethical obligation to fully understand that they are fighting people without lawyers, to fully understand [...] that the formalities of this are basically bankrupting people, and it's terribly critical that you stop it.[7]
Against the defense
The court at one point described the defense as "truly chaotic," stating that defense counsel "repeatedly missed deadlines, ignored rules, engaged in litigation over conduct that was plainly illegal (namely, the right to tape counsel and the Court without consent), and even went so far as to post the illegal recordings on the web."[8]
To the legislature
In the memorandum and order regarding fair use, Gertner acknowledged Nesson and Tenenbaum's argument that the general concept of fairness should be considered, but said that it was for the legislature to deal with:
As this Court has previously noted, it is very, very concerned that there is a deep potential for injustice in the Copyright Act as it is currently written. It urges—no, implores—Congress to amend the statute to reflect the realities of file sharing. There is something wrong with a law that routinely threatens teenagers and students with astronomical penalties for an activity whose implications they may not have fully understood. The injury to the copyright holder may be real, and even substantial, but, under the statute, the record companies do not even have to prove actual damage.
Similarly, the First Circuit Court of Appeals commented "this case raises concerns about application of the Copyright Act which Congress may wish to examine." However, the court did not explain what those concerns are, and its opinion repeatedly expresses certainty that Congress intended for the Act, including the entire allowable range of statutory damages, to be applied to cases such as Tenenbaum's.[19]
Songs at issue and implications
The initial lawsuit included the following 31 songs.[42] However, the Smashing Pumpkins song was removed from the list prior to the trial, so only 30 songs were at issue.
Kazaa Media Desktop. was a peer-to-peer file sharing application using the FastTrack protocol licensed by Joltid Ltd. and operated as Kazaa by Sharman Networks. Kazaa was subsequently under license as a legal music subscription service by Atrinsic, Inc., which lasted until August 2012.
In re Aimster Copyright Litigation, 334 F.3d 643, was a case in which the United States Court of Appeals for the Seventh Circuit addressed copyright infringement claims brought against Aimster, concluding that a preliminary injunction against the file-sharing service was appropriate because the copyright owners were likely to prevail on their claims of contributory infringement, and that the services could have non-infringing users was insufficient reason to reverse the district court's decision. The appellate court also noted that the defendant could have limited the quantity of the infringements if it had eliminated an encryption system feature, and if it had monitored the use of its systems. This made it so that the defense did not fall within the safe harbor of 17 U.S.C. § 512(i). and could not be used as an excuse to not know about the infringement. In addition, the court decided that the harm done to the plaintiff was irreparable and outweighed any harm to the defendant created by the injunction.
Dennis G. Jacobs is a senior United States circuit judge of the United States Court of Appeals for the Second Circuit.
Feltner v. Columbia Pictures Television, Inc., 523 U.S. 340 (1998), was a case in which the Supreme Court of the United States ruled that if there is to be an award of statutory damages in a copyright infringement case, then the opposing party has the right to demand a jury trial.
BMG Music v. Gonzalez, 430 F.3d 888, was a court decision in which the United States Court of Appeals for the Seventh Circuit ruled that a record company could sue a person who engaged in online sharing of music files for copyright infringement. The decision is noteworthy for rejecting the defendant's fair use defense, which had rested upon her contention that she was merely "sampling" songs with the intention of possibly purchasing the downloaded songs in the future, a practice known informally as "try before you buy".
Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994), was a United States Supreme Court case that addressed the standards governing awards of attorneys' fees in copyright cases. The Copyright Act of 1976 authorizes, but does not require, the court to award attorneys' fees to "the prevailing party" in a copyright action. In Fogerty, the Court held that such attorneys'-fees awards are discretionary, and that the same standards should be applied in the case of a prevailing plaintiff and a prevailing defendant.
Nancy Gertner is a former United States district judge of the United States District Court for the District of Massachusetts. She assumed senior status on May 22, 2011, and retired outright from the federal bench on September 1, 2011. She is now a professor of practice at Harvard Law School.
Arts and media industry trade groups, such as the International Federation of the Phonographic Industry (IFPI) and Motion Picture Association of America (MPAA), strongly oppose and attempt to prevent copyright infringement through file sharing. The organizations particularly target the distribution of files via the Internet using peer-to-peer software. Efforts by trade groups to curb such infringement have been unsuccessful with chronic, widespread and rampant infringement continuing largely unabated.
Capitol Records, Inc. v. Thomas-Rasset was the first file-sharing copyright infringement lawsuit in the United States brought by major record labels to be tried before a jury. The defendant, Jammie Thomas-Rasset, was found liable to the plaintiff record company for making 24 songs available to the public for free on the Kazaa file sharing service and ordered to pay $220,000.
Gasperini v. Center for Humanities, 518 U.S. 415 (1996), was a decision by the Supreme Court of the United States in which the Court further refined the Erie doctrine regarding when and how federal courts are to apply state law in cases brought under diversity jurisdiction. The Court held that the New York state rule applied.
The Virginia Circuit Courts are the state trial courts of general jurisdiction in the Commonwealth of Virginia. The Circuit Courts have jurisdiction to hear civil and criminal cases. For civil cases, the courts have authority to try cases with an amount in controversy of more than $4,500 and have exclusive original jurisdiction over claims for more than $25,000. In criminal matters, the Circuit Courts are the trial courts for all felony charges and for misdemeanors originally charged there. The Circuit Courts also have appellate jurisdiction for any case from the Virginia General District Courts claiming more than $50, which are tried de novo in the Circuit Courts.
Viacom International, Inc. v. YouTube, Inc., 676 F.3d 19, was a United States Court of Appeals for the Second Circuit decision regarding liability for copyright infringement committed by the users of an online video hosting platform.
Arista Records LLC v. Lime Group LLC, 715 F. Supp. 2d 481, is a United States district court case in which the Southern District of New York held that Lime Group LLC, the defendant, induced copyright infringement with its peer-to-peer file sharing software, LimeWire. The court issued a permanent injunction to shut it down. The lawsuit is a part of a larger campaign against piracy by the Recording Industry Association of America (RIAA).
Sony BMG Music Entertainment v. Tenenbaum is the appeals lawsuit which followed the U.S. District Court case Sony BMG v. Tenenbaum, No. 07cv11446-NG.
Cambridge University Press et al. v. Patton et al., 1:2008cv01425, was a case in the United States District Court for the Northern District of Georgia in which three publishers, Cambridge University Press, SAGE Publications, and Oxford University Press, initially filed suit in 2008 against Georgia State University for copyright infringement.
Sid & Marty Krofft Television Productions Inc. v. McDonald's Corp. (1977) was a case in which puppeteers and television producers Sid and Marty Krofft alleged that the copyright in their H.R. Pufnstuf children's television program had been infringed by a series of McDonald's "McDonaldland" advertisements. The finding introduced the concepts of extrinsic and intrinsic tests to determine substantial similarity.
Miller v. Universal City Studios, Inc. is a case where an appeals court found that although the plaintiff apparently deserved to prevail, it reversed the jury verdict and remanded the case for retrial because it found reversible error in the trial judges' instructions to the jury. The appellate court found that the judge's jury instructions, which included the statement that the labor of research by an author is protected by copyright, had been given in error. The court noted that plaintiff, over the objection of the defense, had urged the district court judge to include this instruction.
Halo Electronics, Inc. v. Pulse Electronics, Inc., 579 U.S. 93 (2016), was a United States Supreme Court case in which the Court held that the two-part Seagate test, used to determine when a district court may increase damages for patent infringement, is not consistent with Section 284 of the Patent Act.
Romag Fasteners, Inc. v. Fossil, Inc., 590 U.S. ___ (2020), was a United States Supreme Court case related to trademark law under the Lanham Act. In the 9–0 decision on judgement, the Court ruled that a plaintiff in a trademark infringement lawsuit is not required to demonstrate that the defendant willfully infringed on their trademark to claim lost profit damages.
Marcus Gray et al. v. Katy Perry et al. was a copyright infringement lawsuit against Katheryn Elizabeth Hudson, Jordan Houston, Lukasz Gottwald, Karl Martin Sandberg, Henry Russell Walter ("Cirkut"), Capitol Records and others, in which the plaintiffs Marcus Gray ("Flame"), Emanuel Lambert and Chike Ojukwu alleged that Perry's song "Dark Horse" infringed their exclusive rights in their song "Joyful Noise" pursuant to 17 U.S.C § 106.
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