Courts Want $9,250 Per Pirated Song, But BMG Will Settle For $20

With the “six strikes” initiative on it’s way to the United States – where ISPs will begin warning Internet users illegally sharing copyrighted material, and then restricting their Internet access after six warnings – major labels and publishers seem to be moving closer to what they feel will be an effective anti-piracy campaign. However, the people over at BMG Rights Management don’t seem to be completely satisfied and have begun seeking out settlements against file sharers – not in court for thousands of dollars, but rather for just $20 online.

BMG is the fourth-largest music publisher in the world (based on revenue) and is home to artists the likes of Bruno Mars, David Bowie, Foo Fighters, John Legend, Outcast, will.i.am, MGMT and several others. The company does not seem to feel that the ‘education’ approach to the “six strikes” initiative is enough for their clients and are now attempting to generate revenues from alleged file sharers, as reported by TorrentFreak.

BMG’s plan goes like this: Required by law, ISPs in the United States are obligated to forward infringement notices from rightsholders to their customers. These notices are relatively harmless and essentially act as a slap on the wrist, informing the alleged file-sharer that they have been caught distributing copyrighted material and must desist immediately. BMG now wants to take it a step further by adding “evidence” to DMCA notices, which will include hyperlinks to pages allowing supposed infringers to obtain “legal release from the copyright holder.” 

Click image to enlarge:

Image source: TorrentFreak

Once an account holder clicks on these links, they are then taken to a site operated by Digital Rights Corp and presented with details of their alleged infringement. There, they can pay a sum of 20 dollars that will “finally, unconditionally, irrevocably and absolutely releases, acquits, remises and forever discharges” them from future legal action on that particular infringement.

When TorrentFreak first reported word of this BMG plan, they sought the council of Samuel Perkins, a lawyer with the Brody Hardoon Perkins & Kesten law firm:

“Under current US copyright laws, they would not be liable for copyright violations that occurred using their Internet subscription. BMG misrepresents subscribers’ copyright liability by stating that ‘most Internet service provider contracts state that the contract holder is responsible for actions taken on the Internet service.’ This statement is designed to convince subscribers that they are liable for a copyright violation if a neighbor or a family member secretly downloads copyrighted material,” Perkins explained to TorrentFreak.

Perkins concludes that BMG is deliberately obscuring the distinction between the subscriber’s contract with the ISP and their liability under federal copyright law.

“BMG’s website attempts to trick innocent subscribers into settling copyright infringement cases when they in fact have no liability,” he said.

BMG could not be reached for comment and it remains to be seen if they are the only ones seeking to generate cash from alleged file sharers in the wake of the “six strikes” initative imminent in the United States. It will also be interesting to see how effective BMG’s plan will be, and if these pieces of “evidence” will simply be ignored with the same dismissive behavior that the DMCA warnings themselves will likely encounter.

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Hisham Dahud is a Senior Analyst for Hypebot.com. Additionally, he is the head of Business Development for Fame House and an independent musician. Follow him on Twitter: @HishamDahud

Comments

[zoso]

“BMG’s website attempts to trick innocent subscribers into settling copyright infringement cases when they in fact have no liability,” he said.

Really? Tell that to Jaime Thomas and Joel Tenenbaum...

[facepalm]

[xvqqv]

Statements in the letter indicate the major labels are ready to resume their lawsuits against individuals. There are no announcements trumpeting this from the rooftops the way they did in Dec. 2008 when they (not entirely truthfully) announced they were done with the lawsuits.

Perkins is correct insofar as the ISP subscriber has no secondary liability when they are not the actual infringer; see Capitol Records, Inc. v. Foster (2007).

But the BMG letter's lack of specifics is troubling. What "evidence" do they really have? Doesn't the subscriber have a right to see it? Which of the half-dozen methods of infringement named in the letter are they accusing the subscriber of? This is important because, as far as I know, case law only supports calling actual uploading and actual downloading infringement, and even then only under certain conditions...mere possession of privately ripped files doesn't prove anything, and whether making-available/"offering for upload" is infringement has not been established in litigation.

Also, the letter is for one alleged infringement of one specific work on one specific day. For each person they send these to, they will likely have a list of infringements of multiple works spanning multiple days. If the subscriber pays the $20 just to make it go away, what's to stop BMG from just sending more of these notices for different days and for different works, declaring the accused to be a repeat infringer, and jacking up the settlement amount each time?

"Thanks for the $20 for the unproven infringement of song X at 10pm on August 15th, chump. Oh hey, what's this? You were also sharing that same song when we checked two hours later. Here's a bill for $200 for your second offense. Strike two! And oh, look, you were also sharing song Y on both of those days. Strike three and four! The settlement amount is now $2000."

[High School Diploma Online]

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[ethicalfan]

In the United States, the copyright owner has the exclusive right to decide who may distribute their copyrights (17 USC 106). "filesharing" copyrighted works on BitTorrent without the owner's permission is a violation of US Federal law. 200,000 people have been sued for doing this since 2010. http://bit.ly/qIY5tc

[Ophelia Millais]

If you actually read Title 17, you'll find that it doesn't define distribution. The opinion that making-available/offering-to-upload is the same as actual distribution has not yet been decided by the courts; the Tenenbaum and Thomas-Rasset cases have very deliberately been sidestepping this issue, as you would know if you had read the decisions to date in those cases.

The 200,000+ lawsuits you refer to were brought not by the major record labels (which did indeed stop suing people in '09), but by a handful of movie companies, mostly the one behind The Hurt Locker, plus a bunch of pornographers. Those cases don't hinge on the making-available issue because of how BitTorrent works (if you're in a swarm, you're almost certainly actively uploading or downloading, so there's no question as to whether some kind of infringement has occurred). As the article you cited points out, these cases are getting dismissed and are not even eligible to go to trial; they're "troll" actions, abusing the courts just to get names and addresses of people to send settlement demands and threats to. These trolls are not happy with how things have been going when those people decide to fight. Google dietrolldie.

[John Eppstein]

If Hisham Dahud is a "senior analyst" for Hypebot he doesn't appear to be doing his job very well. It shouldn't take a "senior analyst" (whatever that is) to know the difference between downloading a song for one's personal use (reprehensible but not terribly evil) and distributing a song to thousands of strangers all over the world, which in addition to being a serious civil violation also happens to be real criminal activity - unauthorized distribution of copyrighted material is a federal felony under US law, albeit one which is enforced not nearly as often and in a far more erratic manner than it should be.

Could it be that Mr. Dahud is less interested in the truth and more interested in spreading propaganda to shore up the side of those in the tech industries who profit from the illicit traffic in unauthorized downloads?

The facts of the Tenenbaum case are that Mr. Tenenbaum was given ample opportunities to settle for a token payment and refused - and subsequently was assigned a fine BY A JURY OF HIS PEERS commensurate with what said jury considered just for the offense he committed. Going for a jury trial was HIS CHOICE - I guess that the average person just doesn't have a lot of sympathy for habitual thieves.

It should also be noted that Tenenbaum was only charged with a very small percentage of the material he was caught distributing - a sample of 30 files out of several hundred he was caught "sharing" (kind of like charging Bernie Madoff with defrauding one little old lady), and that he is extremely fortunate that he was not arrested on federal piracy charges, as would almost certainly have been the case had it occurred in the early '90s when the FBI was still vigorously pursuing piracy cases.

[John Eppstein]

"The opinion that making-available/offering-to-upload is the same as actual distribution has not yet been decided by the courts"

You ARE kidding, aren't you?

Distribution is distribution - there's no "side-stepping" involved.

It doesn't matter if it's a guy selling illicitly copied CDs out of the trunk of his car or a kid "sharing" files over a P2P network, it's still distribution. When you take a product and transfer it to other people, that's distribution. The actual medium of exchange is irrelevant. What's being distributed is the content, not the medium. The medium is simply the carrier - the "box" the merchandise is delivered in, as it were.

The reason that "distribution" is not defined in Title 17 is because it doesn't have to be - the principle is well known and obvious and has a long history of precedent behind it.

Many "digerati" like to pretend that if the medium is a bit stream it is somehow different than any other medium of distribution. This notion in erroneous and indeed laughable, yet many cling to it as a justification for their own bad behavior.

I'd suggest that you read Jaron Lanier's excellent book "You Are Not A Gadget" for an in depth and thoughtful analysis of this and other social issues engendered by the internet.