Usenet.com is preparing for what may amount to “hundreds of millions of dollars” in damages after losing a case brought by the RIAA in New York against the internet dinosaur.
Ars Technica detailed the laundry list of grievances of which Usenet.com was found guilty:
“A federal judge yesterday found Usenet.com liable for just about every copyright infringement claim on the books: direct infringement, inducement of infringement, contributory infringement, and (just for good measure) vicarious infringement. Not content to be loud and proud about its pro-pirate agenda, Usenet.com also resorted to stonewalling legal questionnaires, sending employees to Europe to avoid depositions, wiping hard drives, and failing to turn over e-mail after being sued in 2007 by the music labels.”
Aside from the potential for ridiculous and imaginative fiscal penalties, the case is significant for many reasons. Usenet.com was denied use of the “Betamax” defense by U.S. District Judge Harold Baer, with which they could assert that their service had reasonable applications for use other than facilitating infringement. Baer also sanctioned Usenet from invoking protection under the Digital Millennium Copyright Act’s “safe harbor” provision- a clause which protects internet service providers from prosecution due to unlawful acts committed by users.
CNet quoted Usenet.com attorney Charles Baker on another significant issue possibly defined by this case:
Another precedent set by Baer, according to Baker, is that distributing material within a closed network was a violation.
“This is something new the judge bought off on their argument,” Baker said. “The way Usenet.com works is there is copying going on in the servers, there’s multiple copies being made. When a user uploads a file it goes into a server and subsequently those binary files move from server to server as they go through the Usenet network. The court has held that was a violation of the right of distribution and no court has gone there before.”
RIAA lawyers successfully contended that Usenet.com engaged in several below board practices to circumvent their judicial efforts, including hiding witnesses in Europe and destroying data. Baer was not pleased with Usenet’s actions, clearly reflected in his findings. Without the “safe harbor” defense available to Usenet, their case was tanked and Baer issued a summary judgment to the RIAA. Damages will be determined in the coming weeks, and penalties could range as high as $30,000 per infringement.
RIAA General Counsel Stephen M. Marks gloated about the verdict in a statement:
“This decision is another example of courts recognizing the value of copyrighted music and taking action against companies and individuals who are engaging in wide scale infringement. We hope that other bad actors who are engaging in similar activity will take note of this decisive opinion.”