Recently, Jammie Thomas-Rasset lost her court case and the RIAA was awarded $1.92 million for the 24 songs that she was found to have infringed. To those of you keeping score, that’s $80,000 per song.  You might wonder just how a song can be worth more than many new cars.  Well, part of the problem is that copyright fines are outdated.  The laws regulating them come from a time when copyright infringers were mainly for-profit operations.  These people would make many copies of cassette tapes/VHS tapes and sell them on the street for less than a legitimate copy.  For this offense, the for-profit operations could be charged $750 – $150,000 per infringement.

This is all well and good, but today’s infringer is more likely to be a home user with no profit motive behind their infringement.  They might not even know that they are infringing on copyrights.  They just heard from a friend that they could get free music by downloading Kazaa/BitTorrent/etc.  They might not have even been aware that the program opened their hard drive’s music folder for the entire world to see/download.  Now, I’ll agree that ignorance of the law shouldn’t be too much of a defense, but the current fines seem excessive even if they shared out their music directory willingly.

Let’s explore just how that $80,000 works out.  The first point to consider is that Jammie Thomas-Rasset wasn’t charged with downloading music.  Despite what the media keeps reporting, people are charged with sharing songs out, not downloading them.  This isn’t to say that downloading songs without the permission of the copyright holder is legal, just that it is hard to detect/prosecute.  So we’re not really talking about $80,000 per song but an $80,000 fine for the copies that are assumed to have been made and lost sales that are assumed to have happened because Jammie Thomas-Rasset’s MP3 file was shared out online.

For the sake of argument, I’ll make the big assumption that each download made from her shared copy is a lost sale.  In reality, I don’t believe that every illegal download is a lost sale, but let’s run with the 1 copy = 1 lost sale figure for now.  Given that the average price of a song online is $0.99, the $80,0000 per shared file works out to 80,808 copies made. Now, I haven’t seen any claims by the RIAA as to how long those files were shared out, but I don’t think that any residential file sharer is going to share out over 80,000 copies in any reasonable length of time.  Any formal study of the average number of song downloads per file sharer would run into the same copyright difficulties that Jammie Thomas-Rasset did.  In addition, as I said before, every illegal download isn’t a lost sale.  Some people, absent the shared file, would buy the songs, but song wouldn’t.  Some people will even buy the song after sampling it via an illegal download.  The illegal download to lost sale calculation is murky at best.

I don’t belong to that segment of the "Information Wants To Be Free" movement who thinks that everything should be put online for free for anyone.  I definitely think that some fine is needed for people who share copyrighted content out without the copyright owner’s permission.  However, over 80,000x the value of the uploaded material is unreasonable and leads to bankruptcy over a civil offense. 

So what should the laws be changed to?  Well, I think that a reasonable amount would be 10x the equivalent purchase price of the item.  In the case of Jammie Thomas-Rasset, her 24 music files would be "worth" $0.99 each (iTunes price).  Ten times that figure would give her a total fine of $237.60.  This is much smaller and yet it isn’t insignificant.  Losing $240 can be a financial sting that makes you take notice.

For larger file sharers, the penalties would rise, but not to bankruptcy levels.  The RIAA initially accused Jammie Thomas-Rasset of sharing out 1,700 files but limited their court claims to 24 files.  Had they gone after all 1,700 and won, my proposed fine would total $16,830.  This would be a huge financial hit, but one that she would be likely to recover from eventually.  They could set up a payment plan and she would need to tighten her belt, but it would be doable.  The equivalent verdict that the jury awarded would have been $136 million.  This would have just driven her deep into bankrupcy.  (The $1.92 million might just do that anyway.)

Our copyright laws need serious updating.  In no other area do you not have to prove specific damage amounts to get a ridiculous level of return on your product’s worth.