Author: Matt Kellogg
At trial, the plaintiffs sought to prove that the defendant, a single mother in Duluth, had willfully infringed 24 of the plaintiffs' recordings by downloading and distributing them via the peer-to-peer program Kazaa. Finding that the defendant had infringed, the jury awarded the plaintiffs statutory damages of $9,250 per song, for a total of $222,000. The defendant filed a motion for a new trial or, in the alternative, for remittitur, calling for a reduction of excessive damages; the plaintiffs filed an unopposed motion to amend judgment, seeking an injunction. Instead, the court elected sua sponte to address the possibility of granting a new trial because of an incorrect jury instruction.
The jury instruction in question stated that "making [songs] available" for download on Kazaa violated the plaintiffs' "exclusive right of distribution, regardless of whether actual distribution had been shown." As a result of this instruction, the jury neglected to state in the verdict that it did or did not find actual distribution or any other specific reasoning for its decision. Although the jury might have decided that the defendant had violated the plaintiffs' right to reproduction or that dissemination to the plaintiffs' agent had formed the basis of infringement--both of which would have been valid conclusions, according to the court--ultimately the lack of specificity made it impossible to know if the verdict was based on permissible legal grounds.
The court's analysis began by considering the plain meaning of "distribution." Based on section 106(3) of the Copyright Act, the court found that "distribution" requires an actual transfer of possession or ownership, a definition supported by the dictionary and leading copyright treatises. Like the Patent Act, which did not cover "offers to sell" until amended by Congress to include that precise language, the Copyright Act should be interpreted as applying only to "distribution" and not to "offers to distribute" (i.e., "making available") until the text of the statute expressly states otherwise.
Next, the court refuted the plaintiffs' claim that "distribution" is synonymous with "publication." The Copyright Act defines "publication" as "the offering to distribute copies . . . to a group of persons for purposes of further distribution." In Harper & Row Publishers, Inc. v. Nation Enterprises, the Supreme Court distinguished the right to publish and the right to distribute as separate under the Copyright Act. This distinction further precludes expanding the plain meaning of "distribution" to incorporate offers to distribute.
The court then turned to the question of whether the Copyright Act creates a protected right to authorize distribution. The authorization clause, in section 106, states that "the owner of copyright . . . has the exclusive rights to do and to authorize any of the following," including the right "to distribute." The court said that this language does not create an additional right in itself but instead serves as a basis for imposing secondary liability. To be secondarily liable, the defendant would have to induce or encourage another party to infringe and the encouraged party would actually have to infringe; encouragement alone would not be enough.
Following this discussion, the court cited National Car Rental System, Inc. v. Computer Associates International, Inc. as the relevant Eighth Circuit precedent. Because that case already considered and rejected the idea that "distribution" can mean "making available," the court was bound to follow its holding, which it found to be "consistent with the logical statutory interpretation" of the Copyright Act. Briefly examining the implications of international law, the court also determined that non-self-executing U.S. treaty obligations cannot override the clear congressional intent noted above.
Ultimately, the court concluded that the jury instruction had in fact been erroneous in defining "distribution" as "making available" and thus ordered a new trial. In a coda to its opinion, the court pleaded for legislative reform, urging Congress to define more clearly the liability and damages structure for similar peer-to-peer cases. In this case, for example, the awarded damages equaled more than 4000 times the actual cost of the infringed songs. Because the defendants in these cases are consumers and not corporations, the court reasoned, the range of damages must be better calibrated to deter future infringement without going so far as to be "oppressive."
Date published: November 17, 2008