RIAA sues over file-sharing site, but settles suit

This past semester, the nationwide debate over file-sharing and online music theft hit the University in a personal way as the Recording Industry Association of America – a trade group representing the interests of the major record labels – sued sophomore Daniel Peng for what could have been billions of dollars.

Peng had been operating a website known as "Wake" — accessible at wake.princeton.edu — which let campus network users search for shared files. The RIAA alleged that this search engine facilitated music theft on a grand scale and that Peng himself had made hundreds of copyrighted works available from his computer.

If he was found liable in court, Peng could have been fined $150,000 for each act of copyright infringement. The suit filed on April 3 alleged that he was responsible for thousands of such acts.

However, after a month of negotiation between lawyers and tense speculation on campus, the suit — along with three others filed against college students for operating similar services — was settled out of court. Under the terms of the settlement, Peng agreed to pay the RIAA $15,000 and take down his site while not admitting any wrongdoing.

According to the University's copyright compliance officer in OIT, Rita Saltz, the University ordinarily receives complaints from industry groups and then contacts the appropriate students — who most often cooperate immediately. In the last year, Saltz's office received about 130 complaints, but she said the suit came as a "terrible surprise."

"I had no idea this was coming," she said.

"The RIAA really wants to send a frightening message," wrote David Dobkin, chair of the computer science department and next year's dean of the faculty, in an email. "These students (Peng et. al.) are being set up to scare others away from doing this."

In fact, the scale of the lawsuit led some to wonder if the RIAA actually expected to collect damages. "The amount of money they are asking for is larger than the entire profit of the record industry in one year, and perhaps in its entire history," said Fred von Lohmann, senior staff attorney at the Electronic Frontier Foundation.

The suit against Peng comprised two separate claims. The RIAA alleged that Peng committed direct copyright infringement by distributing copyrighted music files from his personal computer and that he had engaged in contributory infringement by maintaining the Wake service, which facilitated music theft.

While direct infringement charges are simply a factual matter, the contributory infringement law is open to interpretation, von Lohmann said.

"Somebody needs to tell you that infringement is going on," in order to prove contributory infringement von Lohmann said. "In this case it appears that the recording industry hadn't notified Princeton or Mr. Peng [about copyright violations as a result of Wake searches] so there is an open question as to whether the [RIAA] filled the requirements of the 'Napster' ruling."

So far, the RIAA has taken action only against those who have created tools that they believe aid music piracy. But it is possible that if, in a few years, the file-sharing problem worsens, the association will resort to filing suits against individuals solely for direct infringement.

Case settled

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"I'm definitely relieved now that it's all over," said Peng on May 1 after the settlement was announced. He said he was looking forward to getting back to his life as it used to be.

Howard Ende, Peng's lead counsel in the case and former general counsel to the University was satisfied with the settlement and said it "could have been a lot worse."

"[I]n some ways Dan and the others were forced to settle, and [the RIAA] came up with numbers they felt would send a message," Ende said.

RIAA senior vice-president Matt Oppenheim disagreed with the idea that insurmountable legal costs prompted the settlement.

According to Oppenheim, the RIAA never expected to get the billions of dollars implied by the initial filing, but rather, it wanted to send a message to people operating similar file-sharing networks.

Since the settlement, Peng has begun to collect donations through the Wake site. To date, he has received more than $1,500. However, that is still far short of his goal of paying of the $15,000 settlement and legal fees.