USDC D. Massachusetts, December 7, 2009
- In a file sharing copyright infringement action, the court grants plaintiff record companies’ motion for summary judgment on the issue of defendant’s fair use defense.
Plaintiff record companies filed a copyright infringement action against defendant Joel Tenenbaum for allegedly sharing over 800 copyrighted songs over a four-year period using several different peer-to-peer platforms. The defendant argued that his use was a fair use, and the plaintiffs moved for summary judgment on the fair use issue.
In a July 2009 electronic order (previously summarized by us), the court granted the plaintiffs’ motion because the defendant failed to meet the burden of identifying disputed facts based on “hard proof rather than spongy rhetoric.” The court held that the defendant proposed a fair use defense “so broad that it would swallow the copyright protections that Congress has created . . . [and he makes] no claim of a transformative use or public benefit sufficient to justify an exception to copyright protections.”
In this memorandum, the court described in greater detail the reasons for the court’s July decision – that is “why fair use, ultimately, was not appropriate for a jury in this case.”
The court began by saying that it was “deeply concerned by the rash of file sharing lawsuits, the imbalance of resources between the parties, and the upheaval of norms of behavior brought on by the internet” and that it was prepared to consider a more expansive fair use argument than other courts have credited. For example, defendants who used file sharing for the purposes of sampling music prior to purchase or space-shifting to store purchased music more efficiently, or who used the new file sharing networks in the time period before digital media could be purchased legally and who later shifted to paid outlets might be able to rely on the fair use defense. But, the court said, “the defendant would have none of it. Rather than tailoring his fair use defense to suggest a modest exception to copyright protections, Tenenbaum mounted a broadside attack that would excuse all file sharing for private enjoyment. It is a version of fair use so broad that it would swallow the copyright protections that Congress created, defying both statute and precedent.”
As a preliminary matter, the court held that the Seventh Amendment guarantees the right to a jury trial, but only on issues that turn on reasonably disputed facts (citing to the judge’s own treatise on juries, and case law). “He has the right to put this matter to a jury only if he shows – through specific, colorable evidence – that the facts relevant to that legal analysis are in dispute. He has no right to a jury, constitutional or otherwise, if he has not adequately contested the underlying facts.”
The court then turned to the fair use defense. Before applying the four statutory fair use factors, the court discussed the origin and purpose of the fair use defense. “It is the flip side of the copyright coin, embracing at its core those uses that advance public purposes without unduly diminishing the market for the original work. . . . This analysis is not some open-ended referendum on ‘fairness,’ as the defendant would have it, but an effort to measure the purpose and effects of a particular use against the incentives for literary and artistic creation that drive copyright protections.”
The court also listed the facts of the case that were not in dispute: “(1) the main purpose of Tenenbaum’s file sharing was his own private enjoyment and that of his friends, that is, the very use for which the artist or copyright holder is entitled to expect payment as a reward; (2) he downloaded entire songs, although not entire albums of music; (3) he did not transform the 30 works at issue (i.e., turn them into his own creative work); (4) his file sharing spanned more than four years and several different software platforms, both before and after this activity was detected in August 2004; and (5) during that time, his file sharing software made more than 800 songs available to other Kazaa users to download. His activity continued notwithstanding changes in the case law, making it clear that the conduct was not protected; by 2001, for example, the Ninth Circuit had held that peer-to-peer file sharing was not fair use. See A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1012-19 (2001). And his activity continued even after digital music was lawfully available.”
Regarding Tenebaum’s fair use defense, the court said that “Tenenbaum did not contest these facts at summary judgment; he argued, instead, that they just did not matter.”
Applying the first fair use factor – the purpose and character of the use, including whether such use is commercial – the court said the commercial/non-commercial inquiry is a misleading one in this case. It is clear that Tenenbaum did not sell the downloaded songs, nor did he demand anything directly in exchange from those who might have downloaded them from him. However, the court noted that the Copyright Act broadly defines “financial gain” as the “receipt, or expectation of receipt, of anything of value, including the receipt of other copyrighted works.” 17 U.S.C. § 101. According to the court, “[f]ile sharing is not far off. Peer-to-peer networks are based on an informal kind of exchange, whereby each user ‘shares’ his or her files and, at the same time, gains access to the files made available by others on the network.” The court suggested that the purpose and character of the defendant’s use should be classified along a spectrum that ranges from pure, large-scale profit-seeking to uses that advance important public goals, and that Tenenbaum’s use falls somewhere in the middle.
The court declined to label Tenenbaum’s use commercial, noting that there is a “meaningful difference between personal file sharing and a business strategy that exploits copyrighted works for profit. These activities have different goals and dimensions; they should not be reduced to a single category in this analysis.” However, the court also said that the issue that is more important in this inquiry, and which weighs against the defendant, is the conclusion that his use was not accompanied by any public benefit or transformative purpose that would trigger the core concerns of the fair use doctrine. “Tenenbaum might argue that online file sharing increases public access to these artistic works, a broad social benefit. But this is not enough. . . . Since fair use operates as an exception to the exclusive rights of the copyright holder, which broadly serve to promote artistic creation, it is critical that a proposed fair use carry its own public benefits.” The court concluded that nothing in Tenenbaum’s use of these sound recordings was remotely transformative, or served other public ends.
The second factor – the nature of the copyrighted work – weighed against Tenebaum because music “commands robust copyright protections.” The third factor – the portion of the work used – also weighed against Tenebaum because he downloaded complete songs. The court called Tenenbaum’s argument that he did not download complete albums “a distinction without a difference.”
The fourth fair use factor – the effect on the potential market for the work – also weighed against fair use. Tenenbaum argued that his file sharing made little economic difference to the plaintiffs because the songs at issue were immensely popular, and therefore widely available on Kazaa. But the plaintiffs provided evidence that the widespread availability of free copies of copyrighted works on the internet has decreased their sales revenue, which other courts have acknowledged. Tenenbaum offered no affidavits or expert report on summary judgment to disprove or dispute this assertion.
The court took issue with Tenenbaum’s apparent argument that “the plaintiffs still make enough money from their copyrights,” noting that the sufficiency of the plaintiffs’ profits is not the measure of fair use, nor is Tenenbaum’s view of what amount of profits is “enough.” “Congress has not capped the revenue that a copyright holder may derive from its monopoly, and that is indeed a quintessential legislative judgment. . . . The Copyright Act grants the plaintiffs an exclusive right to distribute these works; file sharing effectively displaces that right, and the market it represents, by offering the same works for free.”
The court also examined several non-statutory fair use factors urged upon it by defendant, including the plaintiffs’ asserted assumption of risk, plaintiffs’ acquiescence in the infringement or abandonment of their copyrights, and the plaintiffs’ aggressive marketing of their copyrighted works without providing adequate protection from piracy. The court dismissed these factors and said the “mere act of producing and releasing artistic works where there is a known risk of piracy cannot amount to a deliberate waiver of copyright. Such a rule would hand control over copyright to counterfeiters and pirates; copyright protections would be weakest, practically and legally, precisely where piracy efforts were most concerted or successful. The result would undermine copyright on a grand scale, offering greatly diminished incentives to produce the most vulnerable artistic and literary works.”
The court acknowledged that Tenenbaum “was on firmer ground” when he argued that there were no legal alternatives to downloading individual digital music files, but ultimately the court rejected this argument because Tenenbaum continued to download music files from peer-to-peer networks for 15 months after the iTunes store opened, making authorized digital music files easily available.
The court said that it could envision a scenario in which a defendant sued for file sharing could assert a plausible fair use defense, but, based on the undisputed facts, “Tenenbaum is not such a defendant.” Accordingly, the court granted summary judgment in plaintiffs’ favor on defendant’s affirmative defense of fair use.
Despite granting plaintiff’s motion for summary judgment, the court expressed some sympathy for Tenenbaum’s argument that copyright infringement actions for peer-to-peer downloading is unjust. “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. ‘Repeatedly, as new developments have occurred in this country, it has been Congress that has fashioned the new rules that new technology made necessary’ (citing Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 430-431 (1984)). It is a responsibility that Congress should not take lightly in the face of this litigation and the thousands of suits like it.”