Double standard: Unlicensed bar music vs. P2P users

By Nate Anderson

Massachusetts federal judge Nancy Gertner just slashed the damage award against admitted P2P user Joel Tenenbaum from $675,000 to $67,500. In her opinion, she drew a fascinating parallel between Tenenbaum's conduct and that of bars and restaurants who don't pay up for a license to play music in public. Why aren't they hit with tremendous six-figure fines?

"The jury's award in this case also appears egregious in light of the damages typically imposed on restaurants, bars, and other businesses that play copyrighted songs in their establishments without first acquiring the appropriate licenses," Gertner wrote.

"These defendants are arguably more culpable than Tenenbaum. Unlike Tenenbaum, who did not receive any direct pecuniary gain from his file-sharing, defendants in these cases play copyrighted music to create a more pleasurable atmosphere for their customers, thus generating more business and, consequently, more revenue."

Yet, in such cases, damage awards are only 2-6x the cost of a public performance license, "a ratio of statutory to actual damages far lower than the ratio present in this case."

Gertner cites numerous cases where restaurants failed to pay up, used the music for commercial gain, and were then hauled to court. The Spring Mount Area Bavarian Resort in Pennsylvania, for instance, was sued over its lack of a performance license back in 2008. The cost of license would have been $3,725; when the resort was found liable, it had to pay damages of $6,750. Other awards in similar cases include $30,000, $34,500, and $16,000 judgments.

By contrast, juries decided that sharing 30 songs on the 'Net (with no pecuniary motivation) was worth $675,000 and that sharing 24 songs might be worth anywhere from $220,000 to $1.9 million (the two Jammie Thomas-Rasset trials in Minnesota).

It didn't help that both defendants lied (and both judges called them out for it in post-trial rulings), but still—the sheer variability of these verdicts for basically similar cases show that juries are plucking numbers from a hat here. When real businesses commit similar offenses, lawyers don't show up to court and utter apocalyptic rhetoric about how unlicensed bar tunes are "killing the music business." And the results aren't designed to bankrupt the establishment in question.

Gertner can't understand the shocking difference in outcomes.

"I cannot conceive of any plausible rationale for the discrepancy between the level of damages imposed in public-performance cases and the damages awarded in this case," she wrote. "The disparity strongly suggests that the jury’s $675,000 award is arbitrary and grossly excessive."