Monday, June 22, 2009

$1.92 Million...Really?

Last week, the (second) file sharing case of Thomas-Rasset v. RIAA finished and made national headlines when Thomas-Rasset was found guilty and sentenced to pay $1.92 million for illegally downloading 24 songs. I have been wondering all weekend if I should create a post on this, because I don't want to just say what everyone else is saying. However, I thought of something novel.

Well, I think the Ars articles about the trial were great. That is how I stayed informed of the trial's progression. The latest article from Ars on the issue is about Thomas-Rasset's options. My favorite section was about "Changing the Law". Nearly everyone thinks she is guilty, but almost no one thinks that she should have to pay $1.92 million for stealing $30 worth of music. I think that Thomas-Rasset will be a catalysis for change in copyright law, especially the allowed damages.

Currently, the Title 17 (section c) of the U.S. Copyright Act allows for damages between $750-$30,000 for "unwilful" infringements and $750-$150,000 for wilful infringements. I think that absolute dollar amounts are poor choices for several reasons.

In this specific case, nearly everyone believes that $1.92 million is too large for stealing $30 of music. It might even be in violation of the Eighth Amendment of the Constitution, which prohibits "excessive fines". So, if the intellectual property (IP) is too cheap (i.e. $1 for 1 song), absolute dollar amounts seem too large.

What if the exact opposite were true? Can you image a situation where some piece of IP costs $200,000 (to legally purchase)? In that case, it would be would be cheaper to "wilfully infringe" and only be liable to pay $150,000. So, if the intellectual property is too expensive, absolute dollar amounts seem too small.

I can think of one other, albeit, minor case. The Copyright Act became law in 1976 and went into effect in 1978. So, when our congressmen created this act and decided on the absolute dollar amounts mentioned above, did they mean the value of the dollar in 1976, 1978, the year of the infringement, or the year of the verdict? This question is non-trivial. I personally think that they meant the value of the dollar in 1976, but then (assuming we always have positive inflation), future Americans will be able to pay the maximum allowable fine with money they find in their couch.

My novel idea is to replace the absolute dollar amounts with amounts relative to the value of the IP that was infringed upon. This would certainly solve my first two examples with IP of both extremely high and low values. One additional clause should be that these relative amounts should be for the dollar value of the IP in question at the time of the infringement since that was the legal alternative to the copyright infringement. The only remaining critique is to claim that the various inflation indices (such as the Consumer Price Index (CPI)) used to calculate the damages are not actuate.

If fallout from the Thomas-Rasset case instigates copyright reform, I hope the absolute dollar amounts in the Copyright Act are replaced with amounts relative to the IP in question.

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