The Proof Is In The Downloading

A U.S. District Court judge in Arizona issued a ruling in a music piracy case that may very well change the way the Recording Industry Association of America sues people for sharing songs.

The case is Atlantic v. Howell, where U.S. District Judge Neil Wake not only denied an RIAA summary judgment motion, but ruled that placing songs in a "shared directory" wasn’t proof enough of infringing activities. Instead, the judge ruled, the plaintiffs must prove that the songs were actually downloaded.

Wake’s ruling pretty much contradicts a legal argument the RIAA has presented in those peer-to-peer lawsuits against individual users. However, not many cases actually make it to court, mainly because defendants often opt to settle for a few thousand dollars instead of shouldering legal expenses for a jaunt through the civil legal system.

This isn’t the first time the recording industry’s lawsuit against Pamela and Jeffrey Howell has been in the national news cycle. In legal documents filed in the case late last year, the RIAA asserted that songs ripped from CDs and then placed in a shared directory constituted copyright infringement.

The Washington Post reported that the RIAA considered it illegal to rip CDs and put them in a shared folder, prompting a thousand blog entries saying something along the lines of "look what the RIAA is saying now." Eventually, calmer media heads prevailed, but not before many news followers believed the RIAA had become even more draconian than previously believed.

In many file-sharing lawsuits, the RIAA has maintained that putting songs in a shared directory is reason enough to sue an individual, even when the trade organization can’t actually prove that anybody downloaded the tunes in question. Often the RIAA has described the placing of songs in a shared directory as "making available," or "an offer to distribute."

Wake’s ruling is not binding, and will not affect other copyright lawsuits. But it just might make judges in other P2P-based lawsuits contemplate whether the RIAA’s legal arguments are as cut-&-dried as the organization often professes.

Project Lawsuit

Warner Music Group, Universal Music Group and EMI recently filed suit against Project Playlist, citing "massive infringement" of copyrights.

Project Playlist pretty much functions as the name implies. According to the Beverly Hills-based company’s Web site, Project Playlist connects users with legally available music for streaming. Users create playlists and Project Playlist then connects the individual songs on the playlists to legal, online resources. The company does not host songs or downloads.

So, what’s the beef?

Royalties, apparently. According to Project Playlist, the company does pay publishing and songwriting royalties but doesn’t mention anything about paying record companies. Needless to say, it’s the labels pressing the lawsuit.

"In short [Project Playlist’s] entire business amounts to nothing more than a massive infringement," the labels said in the suit, according to Reuters.

Aside from not getting any money out of Project Playlist, the record labels are apparently also perturbed about what the company’s users are doing with those playlists. That is, posting the playlists on social-interactive Web sites like FaceBook and MySpace.

In fact, the labels’ suit against Project Playlist almost reads like promotional literature for the company, mentioning the upcoming feature allowing users to incorporate playlists into iPhones and iPods, and saying the Web site receives 600,000 daily visits.

Of course, the labels want to stop Project Playlist from doing what it’s doing. The record companies are also seeking unspecified damages.

Dear Steve

Online activist organization Electronic Frontier Foundation has a bone to pick with Microsoft, and it recently published an open letter to CEO Steven Ballmer detailing its grievances with the software behemoth.

At issue is Microsoft’s decision to power down the digital rights management servers for the music download service it once operated on MSN Music.

The DRM servers authorize music purchased from MSN Music. When customers upgrade their computers or personal devices such as MP3 players, music protected by DRM and purchased from online music services must be reauthorized to play on the new devices by, you guessed it, DRM servers

However, Microsoft discontinued the music downloads in 2006, and recently announced that it would take the accompanying DRM servers offline at the end of August. Once offline, customers who purchased music from MSN Music will not be able to play the songs on new devices. At least, not without some tinkering.

Microsoft has already suggested that customers do what just about everybody does when they want to escape DRM’s stranglehold – burn the tracks onto a CD and then rip the tracks back into MP3 files. However, the EFF wasn’t too thrilled with Microsoft’s solution.

"Microsoft is asking its customers to invest more time, labor and money in order to continue to enjoy the music for which they have already paid," wrote EFF Executive Director Shari Steele. "In fact, Microsoft’s best customers will be the most heavily burdened – the more music they bought, the more work they’ll have to do."

Steele also points out that the proposed method of dodging the DRM issue may put customers at legal risk, saying there is "no certainty that all relevant copyright owners would agree that making such backup copies without permission is lawful."

The letter demands that Microsoft take five steps, starting with a public apology to its MSN customers. Other demands include issuing full refunds, ensuring customers that the company can deliver full receipts detailing transactions and working with its content partners to eliminate DRM from its Zune music catalog.

The final demand is that Microsoft publicize its compliance with the first four demands.

"We look forward to hearing that you have begun taking theses steps to win back the trust of your customers," writes Steele, who probably isn’t holding her breath anticipating a quick reply.

The Price Of Free Music

Nokia has made a lot of noise with its "Comes With Music" promotion where buyers of specific Nokia mobile devices get a year’s worth of free music. So far, two major labels have signed on – Universal Music Group and Sony BMG – and there have been whispers as to just how much Nokia had to pay the labels to get with the program.

Drawing from other media reports, Reuters recently reported that Nokia is paying Universal $35 per device sale, a sum presumably passed on to the consumer.

There are also suggestions that Nokia is paying Universal an extra fee for each song downloaded after the first 35 tunes.

However, Liz Schimel, Nokia’s music business head, while not outright denying such reports, did indicate to Reuters that such rumors weren’t exactly on target, saying recent media reports had "fundamentally misunderstood the concept behind the Comes With Music model."

Of course, the labels are being paid something. But how much, and how payments are recorded, has not been made public. All sorts of rumors, such as price hikes on devices to Nokia swallowing the difference in exchange for market dominance, have been floating around for the past few months. Even so, Nokia is confident it will turn a profit with "free music."

"We expect to make money both from our traditional device sales, as well as from the ‘Comes With Music’ service," Schimel told Reuters. "I can assure you that we are looking out for everyone’s interests in creating these new business models, including our own."