WASHINGTON – The recording industry can't force Internet providers to identify music downloaders, a federal appeals court said Friday in a major decision shielding online privacy while undercutting the industry's anti-piracy campaign.
The ruling does not legalize distributing copyrighted songs over the Internet, but it will greatly increase the cost and effort for the Washington-based Recording Industry Association of America (search) to track such activity and sue those who are swapping music online.
The U.S. Court of Appeals for the District of Columbia (search) overturned a trial judge's decision to enforce copyright subpoenas, one of the most effective tools used by the recording industry. The subpoena power was established by a law passed before the explosive growth of swapping music online.
"It's an incredible ruling, a blow for the little guy," said Bob Barnes, a grandfather in Fresno, Calif., who was targeted by one of the earliest subpoenas from the Recording Industry Association of America but isn't among the hundreds who have been sued so far.
• Raw Data: Opinion, RIAA v. Verizon (pdf)
The appeals court said the 1998 copyright law doesn't cover popular file-sharing networks used by tens of millions of Americans to download songs. The law "betrays no awareness whatsoever that Internet users might be able directly to exchange files containing copyrighted works," the court wrote.
The judges sympathized with the recording industry, which has cited declining profits, noting that "stakes are large." But they said it was not the role of courts to rewrite the 1998 law, "no matter how damaging" the practice of swapping has become to the music industry or threatens to become to the motion picture and software industries.
The chairman of the Senate Judiciary Committee, Orrin Hatch (search), R-Utah, said the court's decision "makes the need for reform of the subpoena process even more urgent."
Sen. Norm Coleman, R-Minn., a prominent critic of the subpoenas, predicted that any efforts to broaden the 1998 law would "face some serious obstacles" in the Senate.
"We clearly have to do a better job of getting law and technology and ethics into better sync," said Coleman.
Legal experts said they did not expect the appeals ruling to affect 382 civil lawsuits the recording industry has filed since it announced its campaign six months ago. It also was not expected to affect financial settlements with at least 220 computer users who agreed to pay penalties from $2,500 to $7,500 each.
Richard Warner, 49, of Petaluma, Calif., paid $4,000 to settle a copyright lawsuit in October over allegations his 17-year-old daughter was illegally sharing more than 1,100 songs. He now wishes his Internet provider had fought against turning over his identity.
"Somebody, somewhere, should have been able to stand up and say, 'Wait a minute, these people are just trying to bulldoze and intimidate people anyway they can,"' said Warner, a wine merchant.
Friday's ruling will make identifying defendants for future lawsuits more difficult and expensive. The ruling forces the recording industry to file civil lawsuits against "John Doe" defendants, based on their Internet addresses, then work through the courts to learn their names.
Cary Sherman (search), president of the recording industry group, said the ruling "unfortunately means we can no longer notify illegal file sharers before we file lawsuits against them to offer the opportunity to settle outside of litigation."
Sherman promised to "continue to defend our rights online on behalf of artists, songwriters and countless others involved in bringing music to the public."
Earlier this week, the recording industry sent letters to the 50 largest U.S. Internet providers asking them to forward written warnings in the future to subscribers caught swapping music.
Details were still being worked out, but if Internet providers agree, subscribers who swap even modest collections of music online could receive the ominous warnings.
The letters demanding an end to the practice would be forwarded without revealing subscriber identities to music lawyers. The warnings would be mailed directly to Internet account holders -- potentially alerting parents or grandparents about illegal downloading in their households they might not know about.
U.S. District Judge John D. Bates had approved use of the disputed subpoenas, forcing Verizon Communications Inc. (search) to turn over names and addresses for at least four subscribers. Since then, Verizon has identified scores of its other subscribers under subpoena by the music industry, and some of them have been sued.
Verizon appealed, and company lawyer Sarah Deutsch called the ruling Friday "an important victory for all Internet users and all consumers."
"Consumers' rights cannot be trampled upon in the quest to enforce your copyright," Deutsch said.