FOUR college students have learned that free music downloads can carry a hidden price tag – US$12,000 to US$17,500 (RM45,600 to RM66,500), to be exact.
The major record companies had accused the students – two at Rensselaer Polytechnic Institute and one each at Princeton University and Michigan Technological University – of fuelling music piracy by running file-sharing networks on campus and offering hundreds of songs for copying.
Last week, the four settled the companies’ claims and promised not to violate their copyrights. Although they did not admit to committing or aiding piracy, they each agreed to pay thousands of dollars to the Recording Industry Association of America, the labels’ trade group.
The payments mark the first time the record companies have recovered money from individuals in the United States accused of piracy on file-sharing networks. But it may be a harbinger of things to come, as the industry takes its battle against online piracy directly to users.
Evan Cox, a copyright attorney in San Francisco who has helped software companies battle piracy, said the amounts are high enough to catch the attention of file-swappers.
“I’d personally think twice about doing something that would cost me $12,000 to $17,500 (RM45,600 to RM66,500) to avoid spending US$12 to US$15 (RM45 to RM60) on the occasional CD,’’ Cox said.
But Howard Ende, an attorney for 18-year-old Princeton University sophomore Daniel Peng, predicted the tactic would backfire.
“This case had very little to do with Dan Peng and everything to do with the recording industry’s attempt to intimidate Internet users around the country and college students in particular,’’ Ende said. “They looked to instil fear, but instead they got fear and loathing.’’
In the settlements, all four – Peng, Joseph Nievelt, a 21-year-old junior computer science student at Michigan Tech in Houghton, Michigan; Jesse Jordan, a 19-year-old freshman information-technology student at RPI in Troy, New York; and Aaron Sherman, a student studying management and computer networks at RPI – agreed not to infringe or support the infringement of the companies’ copyrights.
Peng and Nievelt each agreed to pay US$15,000 (RM57,000), Sherman agreed to pay US$17,500 (RM66,500) , and Jordan agreed to pay US$12,000 (RM45,600).
Floored by fines
For Nievelt, who was raised in a Detroit suburb, the payment amounts to nearly three years’ tuition. For the other three, the settlement translates to roughly half a year’s worth of classes.
None of them appears to have made any money off the file-sharing systems they operated, which were confined to their campuses’ computer networks.
“It’s been kind of a bad day, and a bad week and a really, really, really bad month,’’ Nievelt said from the dorm room he shares with two other students, where the cork board is covered with exam announcements and fliers touting anti-RIAA rallies.
Nievelt started tinkering with computers in the seventh grade and gradually moved on to explore the flexibility of computer networking. Last summer he landed an internship at Microsoft Corp, working as a development engineer in the software giant’s headquarters in Redmond, Washington.
There, he met fellow intern Sherman, who also had spent much of his young life steeped in technology. While attending high school in Huntington, New York, the short-haired, clean-cut student launched a website dedicated to a rare genetic condition, Triplo-X syndrome.
At RPI, he quickly became involved in a variety of activities, ranging from joining the fraternity Lambda Chi Alpha to publishing extensive research on Efficient Solutions for Peer to Peer Resource Discovery on Local Area Networks.’’
When officials from Michigan Tech called him one April afternoon and told him that the RIAA was serving him with legal papers, Nievelt said he felt sick.
“My dad’s not happy. My mom’s more on the paranoid side,’’ Nievelt said. “For a while, it seemed they were going to get more money than we ever would have in the family.’’
Sherman has written or contributed to several academic papers related to file sharing and MP3, the most popular format for music on file-sharing networks. These include a treatise on FlatLan, the file-sharing software that the record labels used as the basis for their lawsuit.
For Jordan, the US$12,000 (RM45,600) settlement wipes out every penny he has in his college savings account.
It was money the quiet freshman – who wrote his first computer program at age nine and helped test Microsoft’s Windows 98 operating system at age 13 – had earned by working summers at a pet store near the family home in Oceanside, New York.
And it was money that the family was counting on to stretch the loans and scholarships that helped cover Jesse’s US$29,000 (RM110,000) annual bill for tuition and housing.
“I’ve been out of work for a while,’’ said Jordan’s father, Andy, 54, a former technology manager for financial service companies. “We had a small fund set aside for his schooling, but that was in the markets and is pretty much gone.’’
Avid customer sued
Noting that he owns thousands of records and CDs, Andy Jordan added: “They (the RIAA) have sued one of their most avid customers. The RIAA says that they wanted to teach these kids and their families a lesson. The lesson we learned is that we will never, ever buy another product from any of those companies again. That’s the lesson we’re going to tell everyone.’’
Peng, a former salutorian of Manalapan High School in central New Jersey, is a physics whiz who won a silver medal at the 2001 International Physics Olympiad in Antalya, Turkey. On his personal website, the young scientist detailed his hopes of majoring in electrical engineering or computer science, as well as his love of authors Ayn Rand and Isaac Asimov.
The Nievelt, Sherman and Jordan settlements took the form of court orders which, if violated, could subject the students to fines and even jail terms. They and Peng all were allowed to pay the record companies in instalments spread over two or more years.
Many record-company executives blame the protracted slump in CD sales on file-sharing networks, which let users copy songs from each others’ computers for free. They responded by suing the most popular networks, with mixed results.
The music industry’s suit against Napster Inc effectively shut the pioneering network down and forced the company into insolvency. But a federal judge in Los Angeles ruled that two other popular networks, Morpheus and Grokster, were not liable for the unauthorised copies made by their users.
Nevertheless, every judge on the cases so far has held that users on these networks who offer or download files without the copyright owner’s permission are violating the law. Those rulings have supplied the RIAA with ammunition for lawsuits against individual file-swappers.
Peng said in a press release, “I don’t believe that I did anything wrong.’’ His attorneys also defended him, saying he’d simply set up an index that enabled others on the Princeton network to find and copy all kinds of files from each others’ computers.
RM570,000 per infringment
Lawyers for the record companies said the four students facilitated piracy the same way that Napster did – by providing a central directory on their computers to unauthorised copies of songs. They also offered 1,800 to 6,000 songs for others on their campuses to copy, the companies alleged.
The lawsuits, which were filed early last month, asked for damages of up to US$150,000 (RM570,000) per infringement. That translated to hundreds of millions of dollars for each of the students.
Matt Oppenheim, RIAA senior vice president of business and legal affairs, said the settlements, although well below what the firms could have asked for, are “the right amount given the situation.’’
He also noted that since the four lawsuits were filed, at least 18 campus file-sharing networks have been taken down by their operators. – LAT-WP