$1.9 Million Verdict for Illegal Music Downloads

Friday's news saw the announcement of a $1.9 million verdict against Jammie Thomas-Rasset, a Minnesota mother of four, for illegal music downloads. The woman swapped songs on the Kazaa Internet network. Vivendi S.A. and other music vendors brought the case over 24 specific songs. The federal jury awarded $80,000 per song, for songs including “Iris” by the Goo Goo Dolls and “Welcome to the Jungle” by Guns ‘n Roses. The music companies claim that sales have declined not just because of bootleg CD's, but also due to illegal downloads. Apparently, the jury agreed. The Thomas-Rasset is the first of many similar cases to go to trial. The first trial in the Thomas-Rasset resulted in a verdict of $220,000, but was retried due to faulty jury instructions. The size of the second verdict is sure to be a contentious issue.

Does this case have longer term implications for music sharers? Does this send a message to people who think that they will not get caught? The Recording Industry Association of America is concerned not only with illegal downloading, but also with protection of intellectual property worldwide. The Congressional International Anti-Piracy Caucus put together a 2009 Caucus "Watch List" of countries with serious copyright piracy that includes China, Russia, Canada, Spain and Mexico. Surely, in tough economic times, all business sectors are more apt to "circle the wagons" to protect their income stream to the greatest extent possible. Copyright violations have been a hot spot for some time now, with many believing that it is not stealing at or at least not bad stealing.

There seem to be two possible outcomes. First, lack of protection may stifle creativity and innovation resulting in fewer works because there is not sufficient money to be made. That is, artists may just decide to do something else. Second, the cost paid for copyrighted materials by those who pay rather than download at "no cost" may increase to subsidize the "free riders" such as Thomas-Rasset. Like any regulatory system, there must be a sufficient enforcement mechanism to catch those who violate the rules or least substantially violate the rules. So long as consumers believe that there is no likely penalty for illegal downloads and piracy, the RIAA will have a busy time litigating.

-JSM

State Business Court Specialization

Today at lunch, between watching the 1st round NCAA games (Geaux Tigers), we were talking about specialized courts in various fields. For example, there is currently legislation, called the Patent Pilot Program (Senate Bill 299 and House Bill 628) to designate special district court judges as "patent judges." Under the bill, not less than $5,000,000 would be set aside to provide training to judges and staff, and for the hire of specialized law clerks to assist the new "patent judge." This discussion started me thinking about State Commercial Courts. I am wondering what the impact of State Commercial Courts are on decisions to arbitrate by clients. These business courts have been established to create a forum for specialized decision making by tribunals. For example, Maryland's Business and Technology Court Case Management Implementation committee provided for specialized training for judges in handling technology for easing the case burden on certain cases. New York's Commercial Division was created to "improve the efficiency with which such matters were addressed by the court and, at the same time, to enhance the quality of judicial treatment of those cases." Likewise, the North Carolina Business court was specifically created to oversee specialized complex commercial litigation matters.

There are currently sixteen states that have either ventured to create specialized forums for commercial litigation or have entertained the idea in some form. It seems that most of these courts are designed around the complex nature of the litigation, rather than the subject matter; specifically the expertise seems to be handling document intensive litigation. So is business court or commercial court division a misnomer? Do litigants expect that Judges hearing these matters have a greater expertise than an ordinary judge in accounting principles or transactional work. If there is a higher level of expertise in transactional matters, does that have a trickle down impact on negotiating to arbitrate disputes by the parties -- (there may be other reasons for preferring arbitration, like not wanting to risk the resolution of disputes on a jury trial, but putting that aside, does the creation of a specialized forum for business problems alter parties dispute resolution choices?). Do these courts have actual technical commercial expertise, or are they just better at handling document intensive litigations than their district court counterparts. I am curious to hear from anyone that has experience with these courts.

Marc (MLR)