Court upholds sizable file-swapping fine

Chicago woman who claimed that she was "sampling" songs is fined $22,500 in precedent-setting appeal.

Declan McCullagh Former Senior Writer
Declan McCullagh is the chief political correspondent for CNET. You can e-mail him or follow him on Twitter as declanm. Declan previously was a reporter for Time and the Washington bureau chief for Wired and wrote the Taking Liberties section and Other People's Money column for CBS News' Web site.
Declan McCullagh
3 min read
A Chicago woman who downloaded songs for free from the Kazaa file-sharing network violated copyright law and must pay a $22,500 fine to the record labels, a federal appeals court has ruled.

In what appears to be the first U.S. case of its kind, the 7th Circuit Court of Appeals on Friday rejected Cecilia Gonzalez' arguments that she was merely "sampling" downloaded music to see which CDs she might want to purchase--and that her sampling was protected under copyright law's "fair use" exception.

Gonzalez' claim that "she obtained 'only 30'--or 'only 1,300'--copyrighted songs is no more relevant than a thief's contention that he shoplifted 'only 30' compact discs, planning to listen to them at home and pay later for any he liked," the court said.

Friday's appeals court ruling is significant for tackling one of the Recording Industry Association of America's lawsuits against individual file swappers in the wake of the U.S. Supreme Court's decision in the Grokster lawsuit in June. That decision, the 7th Circuit said, clearly established that "people who post or download music files are primary infringers" of copyright law.

Gonzalez, who rejected a settlement of between $3,000 and $4,000 that the RIAA had offered earlier, downloaded at least 1,370 copyrighted songs and kept them on her computer until she was caught. The bulk of those came from CDs she had purchased, she claimed.

This decision represents a long-sought appellate victory by the RIAA, which began its legal fusillade against individual file swappers by filing hundreds of lawsuits in September 2003. It buttressed those with additional suits against what has become a total of thousands of individual defendants.

Occasionally, the trade association has been dealt minor setbacks, such as when it was forced to withdraw one of its lawsuits against a Boston-area senior citizen because of an apparent mistake.

The 7th Circuit's decision shows that the judges adopted the RIAA's concern about downloads from file-sharing networks affecting music sales. "As file sharing has increased over the last four years, the sales of recorded music have dropped by approximately 30 percent," the court said. "Perhaps other economic factors contributed, but the events likely are related."

Barred from infringing copyright
A federal district judge had ruled against Gonzalez and also granted the RIAA an injunction barring her from future infringing. During the appeal, she asked the court to get rid of the injunction because she had learned her lesson and dropped her broadband Internet access.

"A private party's discontinuation of unlawful conduct does not make the dispute moot, however," Judge Frank Easterbrook wrote on behalf of a unanimous three-judge panel. "An injunction remains appropriate to ensure that the misconduct does not recur as soon as the case ends."

The 7th Circuit's ruling only sets a formal precedent for the states of Illinois, Indiana and Wisconsin.

The Electronic Frontier Foundation, a San Francisco digital-rights group, has published a list of suggestions on how not to get sued by the RIAA.

Kazaa, the file-swapping network at issue in the Chicago case, is currently the subject of a copyright-related lawsuit in Australia. It lost a round in September and was forced this month to cut off downloads of its Windows software in that country.