Recording industry cracking down on theft of music
ED TRELEVEN
608-252-6134
etreleven@madison.com
Fannie Pearson was shocked two years ago when a letter arrived in the mail accusing her of illegally downloading music over the Internet.
True enough, the 72-year-old grandmother from Beloit had a computer and an Internet connection, which she used to keep in touch with friends by e-mail. But her computer savvy pretty much ended there. She didn't even know it was possible to download music online.
"I didn't know anything about it," Pearson said from Jackson, Tenn., where she lives now. "I didn't do it."
For $3,000, she was told by the law firm that sent the letter, she could settle the case and be finished with it.
"I said, 'You're crazy,'" Pearson said. "I'm not sending you $3,000 for something I didn't do."
Pearson was one of four people the recording industry sued in federal court in Madison in 2004, the second year of an ongoing campaign by the industry to go after people who illegally share copyrighted music on the Internet through file-sharing networks such as Kazaa and Grokster.
File sharing networks first came to public attention with the rise and fall of the original Napster, which was sued by the Recording Industry Association of America in 1999 as it began legal actions against companies that provided file-sharing technology and networks. (The Napster brand name has since re-surfaced as a paid online music service.)
But the lawsuits didn't stop there. In 2003, the RIAA, which represents the "Big Four" record companies and their subsidiaries, began going after individual users for copyright infringement for sharing music files online. If the number of lawsuits filed in Madison is any indication, the RIAA is ramping up such efforts.
Since 2003, record companies have sued 26 people in U.S. District Court for the Western District of Wisconsin, in Madison. The lawsuits started slowly, with one in 2003 and four in 2004. In 2005, eight people were sued; last year that number grew to 13.
Of those 26 defendants, only four hired attorneys to represent them, according to court records. Nine of the defendants settled with the record companies, eight cases were dismissed at the request of the record companies, four default judgments were granted after defendants failed to answer the lawsuits and one was transferred to the federal court in Milwaukee. Four cases are still pending.
The judgments specified in court documents have ranged from about $5,000 to $15,000, though settlement amounts, even in cases where a judgment was entered in court, have been less.
Nationwide, the RIAA has sued more than 18,000 people since 2003 and reached settlements with about 5,600 people. The association does not provide a breakdown on how many people it sued each year.
The RIAA blames file-sharing for a decline in CD sales in recent years. The pain of piracy is felt by thousands of people, including musicians, songwriters and producers whose livelihoods depend upon record sales, said RIAA communications director Jenni Engebretsen, and not just the labels or the artists at the top of the Billboard charts.
The lawsuits seek to protect the recording industry's interests and its ability to "invest in the next generation of artists," Engebretsen said. The efforts have been effective, she said, in deterring others from illegally downloading music.
But they haven't stopped the practice, and the number of people illegally sharing music files appears to have dipped only slightly from its peak, according to one industry analyst.
How they work
Finding people to sue, by the RIAA's own description of the process, could almost be described as random. The RIAA's investigators, from a firm identified in court documents as MediaSentry, log into peer-to-peer networks to search for copyrighted material being offered by individuals.
The investigators take down Internet Protocol (IP) numbers of those offering recordings for upload from their computers. Record companies then file John Doe lawsuits in court against the unidentified holders of the IP addresses. The purpose of the lawsuits is to gain a subpoena, to be served on Internet service providers, for the names of subscribers that correspond with those IP addresses.
Once the companies have the names, the lawsuits are amended or re-filed with the names included.
Initially, federal law gave the RIAA the authority to directly subpoena Internet service providers for the names of subscribers. But in December 2003, an appeals court curtailed that power and ruled that the search for subscribers' names had to be done under the supervision of a judge.
Record companies, through their attorneys, typically send letters to Internet subscribers whom they suspect have illegally shared music, requesting a cash settlement, often $3,000. A lawsuit is usually filed if a settlement can't be reached.
In Pearson's case, the lawsuit was dropped after she and her attorney, Ralph Johnson, convinced the plaintiffs that it was Pearson's teen-age grandchildren who downloaded the music. Pearson said they tried to go after her grandchildren and have since notified her son - their father - in Bloomington, Ill., that they plan to take action against him.
That tactic is not unusual, said Ray Beckerman, a New York City copyright attorney who writes a blog about RIAA cases, "The Recording Industry vs. the People," and represents clients in file-sharing cases.
"They conduct their investigation after rather than before (they file their lawsuits)," Beckerman said.
The RIAA rejects that accusation.
"It doesn't change the fact that for every IP address we have along the way is an instance of theft along the way," Engebretsen said. She added that the law is clear: Illegally downloading music is just as wrong as shoplifting from a record store.
"It takes a tremendous toll on labels and those who work in the industry," Engebretsen said.
Legal help?
Finding a lawyer to help navigate the cases can be difficult. Beyond the initial fee, which is usually more than $3,000 just to retain a lawyer, it can be challenging to find a lawyer who has much experience in this area of the law.
Madison attorney Richard Ward, who has spent most of his career practicing insurance law, represented a Verona woman who was sued by the RIAA in 2004. It was the first and only case of its kind he has handled. He was ultimately able to persuade the record companies that his client's daughter, and not his client, had been the file-sharer in the household, and the case was dropped.
"Most people just get shaken down for the $3,000 (settlement offer)," Ward said. "I think it's a racket the way things are set up."
Beyond the fee to start a case, the cost of presenting an aggressive defense can be prohibitive, potentially as much as $200,000, Beckerman said.
One key case
But Beckerman said one case, currently pending in Oklahoma, could change that. The RIAA sued a mother when it was her daughter who was sharing songs. The industry amended its lawsuit to dismiss the mother and add the daughter - but the mother is now seeking attorney fees to cover expenses she incurred defending herself against the lawsuit.
A decision in her favor could help encourage lawyers to take cases like these, Beckerman said.
Resources are also available on the Internet for people who are sued by the RIAA. In particular, the Electronic Frontier Foundation, a non-profit, non-partisan free speech and consumer rights group in San Francisco, offers advice by e-mail or telephone to those who have been sued by the RIAA.
The group does not condone file-sharing, but it wants to protect the civil liberties of those who are sued.
"We want to make sure people are informed before settling," said spokeswoman Rebecca Jeschke.
"One of the things we do is step back a bit, think about these lawsuits and whether they're helping anyone," she said. "Clearly lots of people are sharing music illegally online. That's a real situation. But it's not clear that this lawsuit campaign solves that."
Fear is a factor
The RIAA says the lawsuits, and a growing awareness of them, are a reason that many people cite for no longer taking part in file sharing.
One independent study the RIAA cites, from March 2005, found that fear of lawsuits was the top reason mentioned by people asked why they no longer illegally download music or video files. In another study they cite, from December 2005, 48 percent of former peer-to-peer users said lawsuits were a reason they stopped using such services.
But its critics say the RIAA's tactics are too heavy-handed.
"These people put out a press release (when they sue)," Beckerman said. "Why would you send out a press release? Because you want to humiliate people, because you want people to know."
That gives accused downloaders incentive to pay whatever the record companies want, to avoid the humiliation, he said.
And once in court, he said, the proceedings are often one-sided affairs because of the high cost of legal representation. Even with lawyers, he said, the RIAA is secretive and tough to fight.
"In these cases, the way they handle them, they demand everything and give nothing," Beckerman said. "They bury you with discovery demands and trample all over you. They'll fight you to the death for the slightest piece of information. They know everything. The defendants know nothing."
Peaks and valleys
But are the lawsuits making a difference? That's open to interpretation, said Eric Garland, CEO of Big Champagne, a Beverly Hills, Calif., Nielsen partner that tracks online media.
On one hand, the RIAA can argue that its lawsuits have stemmed the growth in illegal downloads, Garland said.
"The rate of growth in music file sharing is nothing like what it was three or four years ago," Garland said.
That growth is instead going to the illegal sharing of television episodes and movies, he said. Sharing of those materials has led to similar lawsuits by the Motion Picture Association of America, none of which have been filed in Madison as of yet.
However, the number of people using peer-to-peer file sharing networks hasn't dropped, he said.
Big Champagne found that in August 2003, when the RIAA began bringing lawsuits against file-sharers, the average number of global peer-to-peer users online at one time was about 3.8 million. Though there were peaks and valleys, that number steadily increased to nearly 10 million in March 2006. The number dipped slightly but remained steady at around 9 million through October, the last month for which Big Champagne has data.
The number of illegally downloaded music files also continues to far outstrip the number of legally purchased downloads from services like Apple's iTunes.
"It's not that we've stopped people from doing that," said Garland said. "We're not getting tens of millions to stop. Has litigation curbed or solved this? The answer is clearly no."
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