BMG Music v. Gonzalez

BMG Music v. Gonzalez
Court United States Court of Appeals for the Seventh Circuit
Full case name BMG Music, et al. v. Cecelia Gonzalez
Decided December 9, 2005
Citation(s) 430 F.3d 888
Case history
Prior action(s) 2005 WL 106592 (N.D. Ill. Jan. 7, 2005 ) (granting summary judgment for plaintiffs)
Subsequent action(s) cert. denied, ___ U.S. ___, 126 S. Ct. 2032, 164 L. Ed. 2d 782 (2006)
Case opinions
where user of file-sharing software downloaded over 1,000 copyrighted songs without authority of copyright holders, court rejected fair use to defense to claim for copyright infringement based on user's contention that she was merely "sampling" the works for possible future purchase
Court membership
Judge(s) sitting Frank H. Easterbrook, Terence T. Evans, and Ann Claire Williams

BMG Music v. Gonzalez, 430 F.3d 888 (7th Cir. 2005), was a civil case in which the United States Court of Appeals for the Seventh Circuit upheld a lower court's summary judgment that the defendant had committed copyright infringement. The decision is noteworthy for rejecting the defendant's fair use defense, which had rested upon the defendant's contention that she was merely "sampling" songs with the intention of possibly purchasing the downloaded songs in the future, which is known as "Try before you buy".

Facts

Over a period of several weeks, the defendant downloaded a estimated 1,370 copyrighted songs onto her computer using the KaZaA peer-to-peer file-sharing software, without authorization from the holders of the copyrights in the underlying compositions and sound recordings. The defendant owned compact discs containing some fraction of the songs that she downloaded. The parties disagreed on precisely how many of the defendant's downloads represented songs that the defendant already owned on CD, but it was undisputed that the defendant had never owned authorized copies of 30 of the songs she downloaded. The defendant retained at least these 30 songs on her computer's hard drive even after deciding not to purchase them on CD.

Lower Court Proceedings

Four recording companies who held the copyrights in the songs that the defendant downloaded filed a lawsuit accusing the defendant of copyright infringement. The United States District Court for the Northern District of Illinois agreed with the plaintiffs, and entered summary judgment for the plaintiffs. The trial court rejected the defendant's "fair use" defense. As a remedy, the trial court (1) awarded the plaintiffs $22,500 in statutory damages (representing the statutory minimum of $750 times the defendant's 30 infringing downloads), and (2) issued a permanent injunction forbidding the defendant to download copyrighted recordings owned by the plaintiffs.

The defendant appealed to the Seventh Circuit.

Ruling of the Court of Appeals

The Court of Appeals affirmed the district court's decision in its entirety. The court first reasoned that the copies of the songs that the defendant had downloaded were infringing copies, rejecting the defendant's analogy to the "time-shifting" doctrine enunciated in the Supreme Court's landmark Sony decision.

Turning to the defense of fair use, the Court of Appeals acknowledged that it was obliged to apply the four statutory factors given in Section 107 of the Copyright Act of 1976 for determining whether the defendant's copying of the plaintiffs' works qualified as a lawful "fair use."

Section 107 provides that when considering a defense of fair use the court must take into account “(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.”

Most of these factors, the Court noted, weighed against the defendant:

Gonzalez was not engaged in a nonprofit use; she downloaded (and kept) whole copyrighted songs (for which, as with poetry, copying of more than a couplet or two is deemed excessive); and she did this despite the fact that these works often are sold per song as well as per album. This leads her to concentrate on the fourth consideration: “the effect of the use upon the potential market for or value of the copyrighted work.

The defendant argued that downloading songs for the purpose of "sampling" would have a positive effect on the market for those songs, spurring sales of the songs the defendant enjoyed enough to purchase. The Court of Appeals declared that this argument was both factually unsupported and inconsistent with the Supreme Court's recent Grokster decision and with other cases involving file-sharing and copyright infringement:

As she tells the tale, downloading on a try-before-you-buy basis is good advertising for copyright proprietors, expanding the value of their inventory. The Supreme Court thought otherwise in Grokster, with considerable empirical support. As file sharing has increased over the last four years, the sales of recorded music have dropped by approximately 30%. Perhaps other economic factors contributed, but the events likely are related. Music downloaded for free from the Internet is a close substitute for purchased music; many people are bound to keep the downloaded files without buying originals. That is exactly what Gonzalez did for at least 30 songs. It is no surprise, therefore, that the only appellate decision on point has held that downloading copyrighted songs cannot be defended as fair use, whether or not the recipient plans to buy songs she likes well enough to spring for. See A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1014-19 (9th Cir. 2001). See also UMG Recordings, Inc. v. MP3.com, Inc., 92 F. Supp. 2d 349 (S.D.N.Y. 2000) (holding that downloads are not fair use even if the downloader already owns one purchased copy).

Although the copyright holders might indeed benefit if downloaders purchased additional CDs containing songs they had "sampled" and enjoyed, the court continued, "sampling" nevertheless deprived copyright holders of the revenues they might have earned from licensing authorized downloads of their works.

The court also upheld the award of $22,500 in statutory damages against the defendant, noting that this amount represented the minimum award provided under the statute for works (such as the plaintiffs') that had been published with an adequate copyright notice. The court rejected the defendant's argument that the Seventh Amendment guaranteed her the right to a jury trial as to the appropriate amount of damages. The court reasoned, in essence, that where the plaintiff sought only the minimum amount of damages provided under the statute, there were no disputed issues as to the proper amount of damages for a jury to resolve, and the issue of damages was appropriate for summary resolution. Finally, the court upheld the district court's permanent injunction against the defendant's downloading of copyrighted works.

See also

Notes

1 ^ slip op. at 3.

2 ^ slip op. at 3.

3 ^ slip op. at 3-4.

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