RIAA anti-P2P campaign a real money pit, according to testimony
By Eric Bangeman | Published: October 02, 2007 -
Duluth, Minnesota — During an occasionally testy cross examination, a Sony executive said what many observers have suspected for a long time. The RIAA's four-year-old lawsuit campaign is costing the music industry millions of dollars and is a big money-loser for the record labels. The revelation came during the first day of Capitol Records v. Jammie Thomas, the first file-sharing case to go to trial (it was formerly known as Virgin v. Thomas, but the sole Virgin Records track was stricken from the complaint, making Capitol Records the lead plaintiff).
After a relatively calm morning session, proceedings resumed after lunch. After RIAA lead counsel Richard Gabriel finished his direct examination, Thomas' attorney Brian Toder began his attempts to undermine the labels' case. He focused on apparent inconsistencies from the testimony of Jennifer Pariser, Sony BMG's the head of litigation. Toder also got Pariser to admit that IP addresses and screenshots "don't identify human beings."
Pariser also said she had no idea why Virgin Records dropped its part of the case. "The RIAA and the plaintiffs have the same lawyer and coordinate the lawsuits," Toder noted. "You don't know why they bailed on the case?" Pariser said she had enough trouble keeping track of Sony's litigation, let alone what the other companies are doing. Perhaps—and this is just a guess—it's the money.
Lawsuits are punitive, not business
One of the biggest bombshells from the cross-examination was Pariser's admission that the RIAA's legal campaign isn't making the labels any money, and that, furthermore, the industry has no idea of the actual damages it suffers due to file-sharing.
The admission came during questioning over the amount of damages the RIAA is seeking in the case. Toder asked Pariser how much Sony was suing the defendant for, and she replied that the amount was for the jury to decide and that the labels weren't suing for actual damages. As is the case with the other file-sharing lawsuits, the record industry is only seeking the punitive damages available via the Copyright Act, which can range from $750 to $150,000 per song. "What are your actual damages?" asked Toder.
"We haven't stopped to calculate the amount of damages we've suffered due to downloading, but that's not what's at issue here," replied Pariser, who was reminded by Judge Michael Davis to answer the questions actually asked by Toder, not hypotheticals.
Toder then pressed the Sony executive on the question of how many people actually downloaded music from the defendant. "We don't know," she replied. "I can't identify any other entities aside from what SafeNet reported, but I know that many others did... that's the way the system works."
Toder then raised the question of the RIAA targeting the wrong people in its lawsuits. "How many dead people have you sued?" he asked, a question that was blocked after Gabriel objected. Toder then took a different tack, asking Pariser if she recognized the names of Gertrude Walton, Sarah Ward, Cindy Chan, and Paul Wilke—all innocent victims of the RIAA's driftnet tactics.
The next line of questioning was how many suits the RIAA has filed so far. Pariser estimated the number at a "few thousand." "More like 20,000," suggested Toder. "That's probably an overstatement," Pariser replied. She then made perhaps the most startling comment of the day. Saying that the record labels have spent "millions" on the lawsuits, she then said that "we've lost money on this program."
The RIAA's settlement amounts are typically in the neighborhood of $3,000-$4,000 for those who settle once they receive a letter from the music industry. On the other side of the balance sheet is the amount of money paid to SafeNet (formerly MediaSentry) to conduct its investigations, and the cash spent on the RIAA's legal team and on local counsel to help with the various cases. As Pariser admitted under oath today, the entire campaign is a money pit.
