Is Your iTunes Playlist Worth Six Figures? Due Process, Statutory Damages, and Peer-to-Peer Copyright Infringement

By Hrobak, Ryan M. | Washington and Lee Law Review, Summer 2013 | Go to article overview

Is Your iTunes Playlist Worth Six Figures? Due Process, Statutory Damages, and Peer-to-Peer Copyright Infringement


Hrobak, Ryan M., Washington and Lee Law Review


Table of Contents

I. Introduction ...........1942

II. Purposes, Legislative History, and Congressional Intent ..............1948

A. Ordinary/Knowing Infringement Statutory Regime................ 1948

B. Willful Infringement ..................1951

III. Discussion of Tenenbaum and Thomas-Rasset .................1952

IV. Due Process and Standard of Review.......... 1955

A. Discussing the Williams Standard ..............1957

B. Discussing the Support for Applying Punitive Damages Jurisprudence to Statutory Damages ..............1960

C. Discussing the Support for Not Applying Punitive Damages Jurisprudence to Statutory Damages .............1965

D. Gore Supplies the Proper Standard of Review for Statutory Damages in Peer-to-Peer Copyright Infringement Cases ..............1969

E. How to Apply the Gore Guideposts to Statutory Damages Awards in Peer-to-Peer Copyright Infringement Suits .............1975

1. Applying the First Guidepost: Reprehensibility of Defendant's Conduct .................1975

2. Applying the Second Guidepost: Ratio of Damages Awarded to Actual Harm Inflicted on Plaintiff ..............1978

3. Applying the Third Guidepost: Sanctions for Comparable Misconduct ............1978

V. Conclusion............. 1980

I. Introduction

This Note evaluates the constitutional due process problems presented by exorbitant statutory damages awards levied in peerto-peer copyright infringement cases. Two recent cases sound the clarion call for additional analysis on this issue: Sony BMG Music Entertainment v. Tenenbaum1 and Capital Records, Inc. v. Thomas-Rasset.2 In Tenenbaum, the First Circuit reinstated a large jury award of statutory damages, requiring Joel Tenenbaum to pay $22,500 per song infringed.3 This amounted to a total of $675,000 for the recent college graduate to pay.4 In Thomas-Rasset, the Eighth Circuit affirmed an award of $9,250 per song infringed, yielding a total award of $222,000.5 Considering a single music download usually costs less than one dollar, some have bemoaned the injustice of these disproportionate awards.6

These cases emerged from the development of peer-to-peer file-sharing services, software with which middle-school children quickly became skilled, while presenting legal issues that legal professionals lacked the sophistication to handle.7 Peer-to-peer downloading services gave rise to a new era of copyright infringement.8 This new kind of infringement occurred on an enormous scale but notably without the pursuit of profit on the part of the infringers.9 Infringements resulting from peer-to-peer networks significantly stifled the profiteering of record companies.10 Between the years of 1999 and 2008, "the recording industry as a whole suffered a fifty percent drop in both sales and revenues."11 The financial setbacks that record companies have endured as a result of peer-to-peer file sharing have prohibited the industry from developing and marketing new artists.12 These setbacks also caused the music recording industry to lose a large number of jobs.13

Aiming to rectify this problem, record companies sought first to inform the general public that downloading and distributing music on these file-sharing networks amounted to copyright infringement.14 Record companies then brought lawsuits against the peer-to-peer networks through which individual Internet users shared music.15 These efforts, however, did not curtail the file-sharing phenomenon.16 Even if the record companies managed to prevail against a particular peer-to-peer network, new peer-to-peer networks emerged through which individuals continued to share music files.17 Thus, record companies began filing lawsuits against individuals who did the file sharing.18

Of the over 30,000 lawsuits initiated by record companies for such infringements,19 most have resulted in settlements of between $2,000 and $5,000.20 In some cases, courts rendered default judgments against the defendants or ruled for plaintiffs on summary judgment. …

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