Liability for P2P Downloading

Andrew Raff
December 09, 2005

In the latest P2P file sharing case, the Seventh Circuit Court of Appeals upheld a summary judgment decision of the district court that downloading songs off of P2P services constitutes copyright infringement. BMG Music v. Gonzalez, No. 05-1314 (Dec. 9, 2005).

Writing for a unanimous panel, Judge Easterbrook rules that downloads off of P2P are not the same as time-shifting copies recorded off of television and should not be a fair use:

A copy downloaded, played, and retained on one’s hard drive for future use is a direct substitute for a purchased copy—and without the benefit of the license fee paid to the broadcaster. The premise of Betamax is that the broadcast was licensed for one transmission and thus one viewing. Betamax held that shifting the time of this single viewing is fair use. The files that Gonzalez obtained, by contrast, were posted in violation of copyright law; there was a copy downloaded, played, and retained on one’s hard drive for future use is a direct substitute for a purchased copy—and without the benefit of the license fee paid to the broadcaster. The premise of Betamax is that the broadcast was licensed for one transmission and thus one viewing. Betamax held that shifting the time of this single viewing is fair use. The files that Gonzalez obtained, by contrast, were posted in violation of copyright law; there was no license covering a single transmission or hearing—and, to repeat, Gonzalez kept the copies. Time-shifting by an authorized recipient this is not.

Easterbrook uses the "substitutionary use" test for fair use, which posits that a use is not fair use if it substitutes for the original work: "Music downloaded for free from the Internet is a close substitute for purchased music; many people are bound to keep the downloaded files without buying originals."

Copyright owners may recover damages not only for copies that directly replace sales, but for copies that harm the market for other licensed uses of the work:

Although BMG Music sought damages for only the 30
songs that Gonzalez concedes she has never purchased, all 1,000+ of her downloads violated the statute. All created copies of an entire work. All undermined the means by which authors seek to profit. Gonzalez proceeds as if the authors’ only interest were in selling compact discs containing collections of works. Not so; there is also a market in ways to introduce potential consumers to music. Think of radio. Authors and publishers collect royalties on the broadcast of recorded music, even though these broadcasts may boost sales.

(via How Appealing)

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