Analysis: RIAA - A Change of Heart, Or a Tactical Retreat?

Authored by Paul Sweeting on December 19, 2008 - 9:59am.
I think we can now put away for good the old canard about the RIAA funding its operations from settlements extracted from lawsuits against alleged illegal downloaders. If the strategy were actually a money-maker, it's unlikely the RIAA would be abandoning it, as the Wall Street Journal reported this morning, especially given the tight budgets its member companies (like everyone else) are probably facing for 2009. I think it's far-more likely that the opposite is true and always has been: Bringing tens of thousands of individual lawsuits has been a very costly undertaking of very dubious value in combating illegal downloading. That's probably been obvious even to the RIAA for some time, but it continued with the strategy because it couldn't think of what else to do to try to deal with file-sharing.

The mass lawsuit strategy, in fact, has probably grown even more expensive lately, as the record companies face more and better organized and funded opposition, both from courts and defendants, which has meant more court hearings, more filings and a lot more billable hours for their attorneys:
  • Earlier this month, a District Court in Connecticut hearing two related multiple John Doe cases ruled that all but the first John Doe defendant in each case were improperly joined because there was no allegation that the multiple defendants had acted in concert. As a result, the record company plaintiffs were only entitled to discovery of the identity of the first John Doe in each case. The other Does would have to be sued individually. That was a significant blow to the RIAA's strategy of targeting dozens of defendants in a single lawsuit.
  • The ruling in Connecticut followed a similar ruling by a District Court in Ohio in November. Moreover, the Ohio court noted, "[C]ontrary to Plaintiffs’ contention, it appears that the majority of district courts who have addressed the issue of joinder and were faced with the same allegations to connect doe defendants in other
    music downloading lawsuits have concluded that those allegations were insufficient to satisfy the transactional requirement of Fed. R. Civ. P. 20(a)(2) and that joinder was therefore improper." Yipes.
  • In October, the U.S. District Court for the Central District of California ruled in a multiple John Doe case that the record companies were entitled to discovery of the defendants' identities "for the sole purpose of obtaining injunctive relief pursuant to the complaint filed herein," not for seeking or threatening the defendants with punitive damages, another blow to the RIAA's leverage.
  • Earlier this month, a team of law students working for Harvard Law School professor Charles Nesson took up the case of two University of Rhode Island students accused of illegal file-sharing, becoming at least the third such university-affiliated law clinic to challenge the RIAA, following moves by students at the University of San Francisco and University of Maine law schools.

Given those recent developments, it's not really a shock to hear that the RIAA is rethinking its approach. Whether their new approach will work any better is a question I'll address in an upcoming post.

Paul Sweeting is the Editor of Content Agenda, a business-to-business brand dedicated to the nexus of content, technology and business. This piece was originally published on Paul's blog "Media Wonk" on Content Agenda and is posted on DMW with the author's permission.

 

Image by gynti_46

 

Comments

Cost of Litigation

Terrific analysis! I think most reports treat the cost of litigation essentially as a predictable, fixed cost, but on closer inspection, it's easy to see how the costs can evolve over time as the environment changes.

Post new comment

The content of this field is kept private and will not be shown publicly.