Students who ran file-sharing systems will each give the recording industry up to $17,500

[Major Variola (ret)]

4 lives destroyed by record companies.

Time to add onion routing.

Note that the record companies didn't go after *downloaders*, only offerers.
Note that its legal to have ripped tracks on your computer, and P2P clients
often auto-search for content you don't intend to share.

Perhaps the defendants should have quickly gotten CDs with the tracks on 
their
machine, and used that defense. Oh, that's right, these are poor students
without funds for defense.

Burn, baby, burn.



4 Pay Steep Price for Free Music
Students who ran file-sharing systems will each give the recording 
industry up to $17,500.




Four college students learned Thursday that free music downloads can 
carry a hidden price tag  $12,000 to $17,500, to be exact.

The major record companies had accused the students  two at Rensselaer 
Polytechnic Institute and one each at Princeton University and Michigan 
Technological University  of fueling music piracy by running 
file-sharing networks on campus and offering hundreds of songs for copying.

On Thursday, the four settled the companies' claims and promised not to 
violate their copyrights. Although they did not admit to committing or 
aiding piracy, they each agreed to pay thousands of dollars to the 
Recording Industry Assn. of America, the labels' trade group.

The settlements mark the first time the record companies have recovered 
money from individuals in the United States accused of piracy on 
file-sharing networks. But they may be a harbinger of more lawsuits, as 
the industry starts taking its battle against online piracy directly to 
users.

Evan Cox, a copyright attorney in San Francisco who has helped software 
companies battle piracy, said the amounts are high enough to catch the 
attention of file swappers.

"I'd personally think twice about doing something that would cost me 
$12,000 to $17,500 to avoid spending 12 to 15 bucks on the occasional 
CD," Cox said.

But Howard Ende, an attorney for 18-year-old Princeton University 
sophomore Daniel Peng, predicted that the tactic would backfire.

"This case had very little to do with Dan Peng and everything to do with 
the recording industry's attempt to intimidate Internet users around the 
country and college students in particular," Ende said. "They looked to 
instill fear, but instead they got fear and loathing."

In the settlements, all four  Peng; Joseph Nievelt, a 21-year-old 
junior computer science student at Michigan Tech in Houghton, Mich.; 
Jesse Jordan, a 19-year-old freshman information technology student at 
Rensselaer in Troy, N.Y.; and Aaron Sherman, a student studying 
management and computer networks at Rensselaer  agreed not to infringe 
or support the infringement of the companies' copyrights.

Peng and Nievelt each agreed to pay $15,000. Sherman agreed to pay 
$17,500, and Jordan agreed to pay $12,000.

For Nievelt, who was raised in a Detroit suburb, the payment amounts to 
nearly three years' tuition. For each of the other three, the settlement 
translates to about half a year's worth of classes.

None of them appear to have made any money off the file-sharing systems 
they operated, which were confined to their campuses' computer networks.

"It's been kind of a bad day, and a bad week and a really, really, 
really bad month," Nievelt said from the dorm room he shares with two 
other students, where the corkboard is covered with exam announcements 
and fliers touting anti-RIAA rallies.

The lanky Nievelt started tinkering with computers in the seventh grade 
and gradually moved on to explore the flexibility of computer 
networking. Last summer he landed an internship at *Microsoft *Corp., 
working as a development engineer in the software giant's headquarters 
in Redmond, Wash.

There, he met fellow intern Sherman, who also had spent much of his 
young life steeped in technology. While attending Huntington High School 
in Long Island, N.Y., the short-haired, clean-cut student launched a Web 
site dedicated to a rare genetic condition, Triplo-X syndrome.

At Rensselaer, he quickly became involved in a variety of activities, 
including joining the fraternity Lambda Chi Alpha and publishing 
extensive research on "Efficient Solutions for Peer to Peer Resource 
Discovery on Local Area Networks."

When officials from Michigan Tech called him one April afternoon and 
told him that the RIAA was serving him with legal papers, Nievelt felt sick.

"My dad's not happy. My mom's more on the paranoid side," Nievelt said. 
"For a while, it seemed that they [the RIAA] were going to get more 
money than we ever would have had in the family."

Sherman, who could not be reached for comment late Thursday, has written 
or contributed to several academic papers related to file sharing and 
MP3, the most popular format for music on file-sharing networks. These 
include a treatise on FlatLan, the file-sharing software at the center 
of the record labels' suit against him.

For Jordan, the $12,000 settlement will wipe out his college savings 
account.

It was money the quiet freshman  who wrote his first computer program 
at age 9 and helped test Microsoft's Windows 98 operating system at age 
13  had earned by working summers at a pet store near the family home 
in Oceanside, N.Y.

And it was money that the family was counting on to stretch the loans 
and scholarships that helped cover Jordan's $29,000 annual bill for 
tuition and housing.

"I've been out of work for a while," said Jordan's father, Andy, 54, a 
former technology manager for financial service companies. "We had a 
small fund set aside for his schooling, but that was in the markets and 
is pretty much gone."

Noting that he owns thousands of records and CDs, Andy Jordan added: 
"They [the RIAA] have sued one of their most avid customers. The RIAA 
says that they wanted to teach these kids and their families a lesson. 
The lesson we learned is that we will never, ever buy another product 
from any of those companies again. That's the lesson we're going to tell 
everyone."

Peng, a former salutatorian of Manalapan High School in central New 
Jersey, is a physics whiz who won a silver medal at the 2001 
International Physics Olympiad in Antalya, Turkey. On his personal Web 
site, the young scientist detailed his hopes of majoring in electrical 
engineering or computer science, as well as his love of authors Ayn Rand 
and Isaac Asimov.

The Nievelt, Sherman and Jordan settlements took the form of court 
orders that, if violated, could subject the students to fines and jail 
terms. They and Peng were allowed to pay the record companies in 
installments spread over two or more years.

Many record company executives blame the protracted slump in CD sales on 
file-sharing networks, which let users copy songs from one another's 
computers for free. They responded by suing the most popular networks, 
with mixed results.

The music industry's suit against Napster Inc. effectively shut down the 
pioneering network and forced the company into insolvency. But a federal 
judge in Los Angeles ruled last week that two other popular networks, 
Morpheus and Grokster, were not liable for the unauthorized copies made 
by their users.

Nevertheless, every judge on the cases has held that users on these 
networks who offer or download files without the copyright owner's 
permission are violating the law. Those rulings have supplied the RIAA 
with ammunition for lawsuits against individual file swappers.

Peng said in a news release, "I don't believe that I did anything 
wrong." His attorneys also defended him, saying he'd simply set up an 
index that enabled others on the Princeton network to find and copy all 
kinds of files from one another's computers.

Lawyers for the record companies, however, said the four students 
facilitated piracy the same way that Napster did  by providing on their 
computers a central directory to unauthorized copies of songs. They also 
offered 1,800 to 6,000 songs from their own computers for others on 
their campuses to copy, the companies alleged.

The lawsuits, which were filed early last month, asked for damages of up 
to $150,000 per infringement. That translated to hundreds of millions of 
dollars for each of the students.

Matt Oppenheim, senior vice president of business and legal affairs for 
the RIAA, said the settlements, although well below what the companies 
asked for, are "the right amount given the situation."

Most students "will view $15,000 as a fairly significant amount of 
money," Oppenheim said. He also noted that since the four suits were 
filed, at least 18 campus file-sharing networks have been taken down by 
their operators.

"The message," Oppenheim said, "is clearly getting through that 
distributing copyrighted works without permission is illegal, can have 
consequences, and that we will move quickly and aggressively to enforce 
our rights."

http://www.latimes.com/business/la-fi-settle2may02,1,6792735.story?coll=la%2Dhome%2Dleftrail