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Apr 17 2011

Both Album, Individually Issued Track Are Held a ‘Work’ for Damages Purposes

In a stunning blow to Music Sharing site LimeWire, a federal judge ruled today that music companies are entitled to an award for each infringed recording on the LimeWire system when plaintiffs made that recording available as an individual track, even if the user downloaded the tracks at once as part of an album. This is the latest in a series of bad decisions for the file-sharing site as it fights to survive the lawsuit brought against it by Arista, Atlantic, Sony, Interscope and other music companies. First, in May of last year, the court ruled that LimeWire had essentially induced  the multiple users of its site to infringe the plaintiffs’ copyrighted works. It granted summary judgment to the plaintiffs on liability.  Then in March of this year, the court ruled that the plaintiffs were entitled to statutory damages but did say that plaintiffs would get  a single statutory damage award for each infringement no matter how many times it had been infringed.  In other words, even if LimeWire allowed a million downloads of Lady Gaga’s “Born This Way” from its site that’s a single infringement because it involved one song being taken. This is a pretty standard an appropriate application of the Copyright Act.  Its how many works are infringed that matters, not how many times it was infringed.

So then the plaintiffs produced evidence that Lime Wire had allowed downloads of 11,205 different sound recordings but was seeking statutory damages for “only” about 9,700 of them as they were just going after songs released after 1972 when the newest version of the Copyright Act was enacted. LimeWire argued that if a particular group of songs was included on an album and LimeWire  had that album for download, then the “album” is the infringement and there should be no liability for the individual songs contained on the albums.

LimeWire was counting on a part of the Copyright Act that states if a work is copyrighted as a “compilation” then the “work” is the entire compilation and not the individual pieces that make up the compilation so that taking three parts of the compilation is the same as taking two or one. This would have severely limited the number of songs for which LimeWire was responsible since most songs are part of an album that is available for download on LimeWire.

The court said “Nice try, but no dice.” Judge Kimba Wood ruled any song that had been released independently, even if it also appeared on an album, was a independent “work.” LimeWire’s argument, she said, would only apply to those songs that were only released or available on an  album.  That means the plaintiffs get damages for each individually released song and the album. he court explained it this way

For albums that contain sound recordings that are available only as part of the album, and sound recordings that are also available as individual tracks, the Court provides the following example for purposes of illustration. Let us assume that Plaintiffs issued (1) an album containing songs A, B, C, and D, and that Plaintiffs also made available (2) songs A and B as individual tracks, but (3) made available songs C and D only as part of the album as a whole. Let us also assume that songs A, B, C, and D were infringed on the LimeWire system during that time period. Plaintiffs would be able to recover three statutory damage awards: one award for song A, one award for song B, and one award for the compilation (of which C and D are a part).

While the court had not assessed how many that was, I suspect  many of the 9,700 songs were only available or released individually. Lets say LimeWire is lucky enough that one third of them were not available individually. Considering that statutory damages can range from $200 to $150,000.00 per infringement LimeWire’s exposure is in the range of $646,000.00 (at $200  per) all the way up to $4oo Million. That’s a lot of limes. But if its  lets say around 9,000 of those songs the damages could go into the billion dollar range.  The plaintiffs think that this is closer to the mark because since ITunes was released all their songs were all available individually. That’s right if it was available individually for download that counts as being “released” individually. The defendants were lucky that during the period of the suit, The Beatles did not have their songs individually listed for ITunes until this year.

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