Court: RIAA lawsuit strategy illegal

A federal appeals court on Friday handed a major setback to the record industry's legal tactics for tracking down and suing alleged file swappers, in a high-profile case pitting copyright law against the privacy rights of Internet users.

Reversing a series of decisions in favor of the Recording Industry Association of America (RIAA), the Washington, D.C., court said copyright law did not allow the group to send out subpoenas asking Internet service providers for the identity of file swappers on their networks without a judge's consent.

News.context

What's new:
A federal appeals court rules against the record industry's use of subpoenas to track down alleged file swappers.

Bottom line:
The ruling, which focuses narrowly on an unconventional subpoena power, is a blow to the recording industry, but does not address the legality of lawsuits already filed against hundreds of individuals.

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"We are not unsympathetic either to the RIAA's concern regarding the widespread infringement of its members' copyrights, or to the need for legal tools to protect those rights," the court wrote. "It is not the province of the courts, however, torewrite (copyright law) in order to make it fit a newand unforeseen Internet architecture, no matter howdamaging that development has been to the musicindustry."

While it is a blow to the recording industry, Friday'sdecision is unlikely to derail the RIAA's ongoing lawsuits against hundreds ofindividual file swappers. The ruling focuses on the unconventional subpoenapower that the organization had claimed in order toseek ISP subscribers' identities and does not addressthe legality of the lawsuits that have already beenfiled.

File swappers are generally anonymous on peer-to-peer networks, identified only by an Internet Protocol (IP) address assigned by their ISP. But names and addresses of subscribers can be determined by reviewing ISP records, which can connect IP addresses to individual accounts.

Even if the court's decision is ultimatelyupheld against appeals, the RIAA still will have thepower to identify and sue file swappers.

The big difference, though, is this: The RIAA would have to file a "John Doe" lawsuit againsteach anonymous swapper, a process that would beconsiderably more labor-intensive and time-consuming.That in turn could limit the number of people the association has the resources to pursue.

"It is a pretty big setback," said Evan Cox, acopyright attorney with lawfirm Covington & Burling. "At the end of the day, it's a practical issue.It's mostly going to mean considerable extra expense and a fair amount of additional paperwork andformality."

The RIAA said it would continue its lawsuits againstindividual swappers, even if it is not able to usethe subpoena power.

		Read the decision

An RIAA executive said this new "John Doe" processwould be more intrusive for individuals, not less,since the organization would no longer be able tocontact potential lawsuit targets and settle beforefiling an official suit. For several months, it hasbeen sending letters to suspected file-swappers afterobtaining their identities from ISPs and offering asettlement instead of going to court.

"This decision is inconsistent with both the views ofCongress and the findings of the district court," RIAA President Cary Sherman said in a statement. "Itunfortunately means we can no longer notify illegalfile sharers before we file lawsuits against them tooffer the opportunity to settle outside of litigation.Verizon is solely responsible for a legal process thatwill now be less sensitive to the interests of itssubscribers who engage in illegal activity."

The appeals court's decision comes after the RIAA sued 382 individuals alleged to have offered copyrighted music for download through file-swapping services such as Kazaa, and settled with 220 people for amounts averaging about $3,000 apiece. Many of those settlements had been made before suits were filed, the organization has said.

The suits have dramatically helped raise awareness of the legal issues surrounding file swapping and have also prompted considerable criticism--most notably after the group's first round of lawsuits targeted a 12-year-old honors student living in New York public housing. That suit was settled just a day after being filed, as the RIAA sought to defuse an immediate public relations backlash.

Most of the legal challenges to the RIAA's strategy have focused on the subpoena process used to obtain identities, rather than on the copyright lawsuits themselves.

The DMCA factor
Since the beginning of last year, the RIAA has cited provisions in the Digital Millennium Copyright Act as the legal basis of its subpoena strategy. The subpoenas were used to get ISPs to reveal the identities of anonymous subscribers who, the RIAA alleged, were infringingcopyrights by swapping files over peer-to-peer networks.

Unlike traditional subpoenas issued by law enforcementorganizations, these were requested by a privategroup and were not attached to an ongoinglawsuit--factors that immediately drew criticismfrom civil rights groups.

Verizon, the first ISP to receiveseveral such subpoenas, challenged them immediately,saying they were unconstitutional. A lower court ruled in favor of the RIAA earlier this year, setting thestage for the hundreds of lawsuits it subsequently filed.SBC Communications, Charter Communications and theAmerican Civil Liberties Union have also filed their own, separate challenges to the procedure.

Verizon welcomed Friday's court decision, saying it wouldhelp protect the privacy of people on the Internet.

"Today's ruling is an important victory for Internetusers and all consumers," Sarah Deutsch, a Verizon associategeneral counsel, said in a statement. "Thecourt has knocked down a dangerous procedure thatthreatens Americans' traditional legal guarantees andviolates their constitutional rights."

The appeals court did not talk about constitutionality or privacy in its decision Friday, but said only that Congress had not drafted the DMCA to apply to peer-to-peer networks.

The 1998 law came out of a bitter Congressional battlebetween copyright holders and telecommunicationscompanies over liability for online infringement. The conflict ended in a compromise, which said that ISPs would not be held liablefor communications that simply passed through their infrastructure, as opposed to stored on their servers or networks.

Using similar reasoning, the court said the law'ssubpoena provisions did not apply to peer-to-peer networks, since the copyrighted material was neverstored on an ISP's network, but was transferreddirectly between users' computers.

"This certainly underscores what ISPs have said fromthe beginning," said Fred von Lohmann, an attorney forthe Electronic Frontier Foundation, a civilliberties group that has been critical of the RIAA'sstrategy. "This was not the deal that was struck inthe DMCA. Peer-to-peer (networks) did not exist when the DMCA wasbeing drafted, and Congress did not have this kind ofsubpoena factory in mind."

The decision is likely tospark a new round of political skirmishing overcopyright policy, although the RIAA did not say whether it would lobby Congressfor a change in the law. Indeed, in its decision Friday, thecourt said Congress may want to revisit the issue withthe new technology in mind.

"The stakes are large for the music, motion picture,and software industries and their role in fostering technological innovation and our popular culture" the court wrote. "It is not surprising, therefore, that even as this case was being argued, committees of the Congress were considering how best to deal with the threat to copyrights posed by P2P file-sharing schemes."