Friday, July 31, 2009

Day four in Sony v. Tenenbaum


Testimony in day four of Sony v. Tenenbaum began with the continuing cross-examination of Dr. Stanley Liebowitz

Professor Nesson continued his questioning from a point that he offered he and Dr. Liebowitz both agreed, that the recording companies began having declining revenues at a point after which Napster made file sharing ubiquitous and due to the weakening of the property rights of copyright holders. Professor Nesson asked that given the new situation that had emerged if he believed that it was true that the same companies may not emerge as leaders when a new business plan plays out as the companies that were previously the leaders. He asked the Doctor about an opinion he offered in his 2001 book that DRM would be a part of the future of the music business. Dr. Liebowitz responded that he was hopeful that DRM would be successful in restricting the ability to copy music so that it would strengthen the property rights of the copyright holders, but stated that DRM turned out to provide only limited protection because it was relatively easy to defeat, such as by burning CDs. He then asked about when the industry first offered a product that was not restricted, and was comparable to the open MP3 file, he testified that he thought this happened in the 2007 time frame.

Professor Nesson asked Dr. Liebowitz to explain to the jury an example in his report which used a jewelry store. He explained his analogy of one where a jewelry store owner was continuously robbed, thus forcing the owner in to a different business model, such as selling for another store. He generalized that this was a similar weakening of property right which was detrimental to society because it would force someone in to an unanticipated occupation, which despite how successful they may be at it would be a loss to society because it prevented someone from being in the occupation they desired. Professor read in to this analogy comparing it to a store with no locks on the doors or other methods by which it would be robbed or an alternative product to jewels. Under this testimony Dr. Liebowitz maintained his position, but did say that under a system where people have strong enough will to break the laws relating to strong property rights that there may not be an enforceable system which gives people the strong property rights they once enjoyed.

He was asked if it was his position that if there was a weakening of property rights that it led to a decline in production in general. He agreed, and stated that this weakening of property rights likely led to a drop of production in sound recordings in general. He was asked if other experts in his field believed that the dip in record sales was not due to file sharing, and offered Oberholzer-Gee's paper as an example of a economist who disagreed with his position. He questioned Dr. Liebowitz on an assertion in an Oberholzer-Gee paper that stated the number of annual music albums released doubled since 2000. Dr. Liebowitz said that he believed these numbers were not necessarily reliable because it only included the number of releases registered with Nielsen, and not necessarily the number of professional quality albums released, which could not necessarily be compared since in previous times it would not be possible to come by numbers for the number of amateur quality music released and thus the current numbers from Nielsen would be comparing apples to oranges with previous numbers they released.

He then went in to a sports analogy to explain his proposition about professional quality versus amateur quality albums released. He explained that if the market for professional quality sports went away because due to some market change professional sports franchises could no longer sell tickets or make money from broadcasting that it would not eliminate sports being played, since there is plenty of amateur sports being played where the participants do not make money, but since money is being paid to professional sports that the market overall prefers these kind of sports. He explained that if the property rights of the professional franchises were eliminated it would be a harm to society because the professional tier of sports would go away and would likely impact the total production of sports for the marketplace.

He was then asked about the network effect, whereby the more people that have access to technology the more overall value the whole technology had. He explained this with an analogy to the telephone, but concluded that a network effect due to file sharing was not likely.

Upon redirect Dr. Liebowitz was asked if he agreed with the opinions provided in the Oberholzer-Gee paper. He responded that he did not. He was asked if there was any reason to believe that the specific plaintiffs in this case would be companies that would not survive in the new marketplace that was emerging, to which he also replied that he thought there was no reason these companies should fail.

Joel Tenenbaum

The main witness of day four was the Defendant, Joel Tenenbaum. Joel was asked basic questions about where he currently lived, as well as where he had previously lived, and what computers he had both at his Providence home and in college. He said nothing surprising about his computer at home or at college that hadn't been revealed in previous testimony. He also testified that he had used the sublimeguy14 username, admitted that he had used KaZaA, and that the KaZaA shared folder in the screenshots from MediaSentry were his. He also testified that it was not uncommon for him to see other people uploading files from him on the KaZaA traffic tab. Mr. Reynolds then asked the Defendant about the case that was against him. He testified that he first found out about the case from his mother. He was asked about his responses to interrogatories which asked who else may have used his computer or KaZaA and requests for admissions about file sharing use. His answers to both stating no knowledge were shown to the jury to each of these questionnaires.

The questioning then turned to his deposition testimony where he stated that there were many people who could have used his KaZaA account, friends, other people who had stayed at his house, etc. He also testified that he had never actually seen any of these people use KaZaA. He was then asked about his musical tastes and asked if he liked several artists that appeared in the KaZaA shared folder. He testified that he had burned CDs of the music in his shared, and testified that he had ripped CDs to his computer. He testified that he had never filled in the "comments" meta data on any of the files ripped to his PC. He testified that he may have changed the meta data on some files to be consistent with others for it to be easier to find in music programs, but did not do so for much of the music that he had.

Joel was asked about a video he had recorded from a Deftones performance on the David Letterman show. He testified that he had recorded this video and put it himself in to his KaZaA shared folder and made it known on a Deftones forum that he had done so for others to download it from him.

Joel was then asked about his computer and music usage habits at Goucher college, where he stated he and other students had used the Network Neighborhood feature of Windows to share music with one another in college. He was shown numerous items from Goucher college warning about copyright infringement and peer to peer file sharing, all of which he admitted to having received at some point as a Goucher student. He was asked about other file sharing software such as Napster, LimeWire, and iMesh and admitted that he had used them all. He testified when asked that he did all of this to recieve the most amount of music with the least effort.

Joel was asked about his letter to Plaintiffs after initially learning that he may be sued for copyright infringement. The letter included a line stating he was not near his computer in Providence at the time of writing, but would return later and delete any copyrighted material if it existed. He was also asked about the inspection of his computer and the re installation of his computer, which he stated he took to Best Buy to have done while inspection was pending, but asked Best Buy to preserve all of the music because of the Plaintiffs inspection which was potentially pending. He stated that he took this to be done because the computer wouldn't boot up anymore. He was asked if he had any reason to disbelieve anything in Dr. Jacbson's report stating that he didn't because Dr. Jacobson was "a competent professional". He testified that he had listened to, talked about, made mixes of, and made available for distribution all of the music in his shared folder.

On cross-examination Professor Nesson asked Joel about his personal and family history, places he had lived, when he became interested in music, to which he explained with great narrative detail. He testified about his usage of music, including borrowing CDs from friends, making mix tapes from the radio, and purchasing music CDs from record stores. He was asked what he found attractive about Napster to which he said he'd previously used Yahoo! search to attempt to find mp3 files, but it was much easier when Napster came about. He testified that he was not the person who originally installed Napster on his computer in Providence. He explained that Napster was a giant library of songs in front of you and "the Google of music". He stated he did not have a sense that it was illegal at the time he was using it. He also stated that his friends also used Napster, and he was never insterest in hurting the artists and record companies.

Professor Nesson asked about Joel's high school life and how he used music throughout that time period, which he described driving around with his friends listening to music in his car, and was asked about his car which he testified that he and his father had installed a good deal of upgraded stereo equipment in.

Joel testified that also used KaZaA and found it to be similar to Napster in function. He was asked about his letter to Plaintiff and why he didn't remove his music files as the letter said he would. He stated that he intended to, but could not make himself do it after all of the time he had put in to assembling the music collection. He then described what happened at college afterwards, with his college moving more and more year after year at college to make file sharing applications not work, to which he stated that around his junior year none of the applications he had used worked properly anymore. He stated he continued buying CDs during this time period, due to quality issues.

Professor Nesson then turned to issues of the present lawsuit and why he lied on his written interrogatories. Joel said that his answers seemed like the best response to give without a lawyer. He also asked about some of his deposition testimony which he stated that he was less than fully forthcoming in it. He eventually was asked if he was taking responsibility, to which he said, "I did it".

He stated that he stopped in 2007 or 2008 because of problems using filesharing with malware on his machine, encountering spoof file, and because he began using iTunes. He stated that this lawsuit was one of the reasons he stopped using file sharing.

He stated that during the time Plaintiffs accused him of infringement, August of 2004, he was not aware of iTunes. He stated he may have heard of some other music services but that he wasn't in a position to switch his music acquisition to any other method. He was asked if he ever used file sharing for the purpose of selling or any other commercial activity, which he said he did not, that his use was entirely personal.

The redirect was very short, asking about his bringing his computer to Best Buy and if his intention was to destroy evidence by doing so, he stated it wasn't he just did so because it wouldn't run. He was asked about his testimony that he shared music with friends and was asked if his friends with everyone on KaZaA and Napster, which he said he was not. He was asked if he was now admitting liability, to which he said yes.

Ron Wilcox

Mr. Wilcox is with Warner music group and formerly of Sony. He testified as to the sale of music beginning in the early 1980s through the present time. He explained the advent of the CD and that it was not built with any encryption because the threat of copying was not seen as a major threat at that time. He testified as to music industry efforts in the 1990s to explore digital distribution methods, to which he described generally in terms of the amount of effort expended on it, but no specifics. He testified that all the technologies they looked at during this time included some sort of copy protection.

He testified that efforts to add encryption to CDs were never fully explored because it would have left a lot of existing equipment obsolete and they did not believe this would be something that the marketplace would accept. He testified about early forms of DRM such as FairPlay on iTunes.

His cross examination was short, being asked about Warner's reaction to Napster which he said concerned the company because it was an illegitimate free product. He was asked if Warner or Sony ever tried to partner with peer to peer services which he said they had but that the partnerships never went very far because of animosity on the peer to peer side and stated they never seriously wanted to work with record companies in the way that they wante.d

Silda Palerm

Ms. Palerm's testimony was to authenticate the Warner tracks at issue in the case. The only other issue she testified to was that Warner had had an over 50% reduction in force since the year 2000. On cross examination Mr. Feinberg asked if the reduction in force was at all attributable to the economy. Ms. Palerm stated her opinion that since the bulk of reduction in force was prior to the economy having trouble that she believed it was due to file sharing.

After Ms. Palerm Plaintiffs ended their case.

Plaintiffs after the conclusion of their case moved for a directed verdict on the issue of copyright ownership, liability, and willfulness. Defendant conceded ownership, but not any of the other factors. Judge Gertner indicated she was inclined to direct on the issue of liability based on testimony but still planned to go to the jury with willfulness and the award. The Defendant indicated that they will likely wrap up their case by mid-morning on Friday, after which there will be closing arguments. Plaintiffs indicated they only needed 20-30 minutes for their closing.

Court's docket entry for day 4:

Electronic Clerk's Notes for proceedings held before Judge Nancy Gertner: Jury Trial DAY 4 (Thurs)held on 7/30/2009....p-8 Liebowitz testimony resumes; P-9 Joel Tenebaum; P-10 Ron Wilcox; P-11 Silda Palerm; Jury excused; Plt moves orally for Rule 50 mtn-under advisement..(see endorsement dated 7/31/09 for ruling), ct adjourned. (Court Reporter: O'Hara.)(Attorneys present: Atty Reynolds, Cloherty, Oppenheim, Nesson, Kamholtz, Feinberg) (Gaudet, Jenn for M.Molloy)

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