Joel Tenenbaum and sensible damage awards against file-sharers

It’s hard to imagine a less sympathetic defendant than Joel Tenenbaum. The major record companies sued Tenenbaum in 2007, accusing the Boston University grad student of illegally sharing 30 specific songs online. After repeatedly denying the charges and hinting that other members of his family were responsible, he admitted at trial that he had, in fact, downloaded the tracks and made them available to other file-sharers. He also acknowledged that he’d been sharing songs by the thousands through a variety of networks since the first song-swapping software, Napster, became available in 1999.

The labels didn’t have to show jurors how much damage they’d actually suffered from the 30 infringements. Instead, they asked for the statutory damages provided by Congress for “willful” piracy, which range from $750 to $150,000 per song. The jurors stopped far short of the maximum, awarding the labels $22,500 per song. Nevertheless, District Court Judge Nancy Gertner ruled last week that the verdict was “wholly out of proportion with the government’s legitimate interests in compensating the plaintiffs and deterring unlawful file-sharing.” Declaring the damage award unconstitutional, she cut it from $675,000 to $67,500.

The ruling appears to be the first to declare unconstitutional an award that was within the range provided by statute. But it’s the second time this year that a judge has found a verdict against a file-sharer to be grossly excessive. The judges’ reasoning reflects the growing discomfort in legal circles with copyright owners’ willingness and ability to seek enormous damages from run-of-the-mill non-commercial infringers.

There’s no excuse for Tenenbaum’s file-sharing. And although it’s not the only factor, behavior like his has undoubtedly contributed to the decline in sales that’s hurting many in the music industry. But Tenenbaum’s habit is shared by millions of U.S. Internet users. The industry has to instill respect for copyrights among those consumers and convert more of them into paying customers, a task that outsized verdicts such as the one against Tenenbaum won’t make any easier. If anything, they just make the labels seem more like bullies.

To their credit, the record companies stopped filing new lawsuits against file-sharers a year and a half ago. But as long as copyright law provides such a wide range of penalties, with little guidance to help jurors distinguish an insufferable file-sharer from a commercial pirate selling bootleg discs, the principle Gertner outlined in the Tenenbaum case is a necessary one. Jurors cannot simply pick a number between $750 and $150,000. Courts have to ensure that damage awards bear some relationship to the harm actually suffered.