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New Attorneys Fee Decision Against RIAA

Posted by Zonk on Sun Sep 23, 2007 04:20 AM
from the maybe-you-should-reconsider-your-strategy dept.
NewYorkCountryLawyer writes "The RIAA has gotten slammed again, this time in Oregon, as the Magistrate Judge in Atlantic v. Andersen has ruled that Tanya Andersen's motion for attorneys fees should be granted. The Magistrate, in his 15-page decision, noted that, despite extensive pretrial discovery proceedings, 'when plaintiffs dismissed their claims in June 2007, they apparently had no more material evidence to support their claims than they did when they first contacted defendant in February 2005.....' and concluded that 'Copyright holders generally, and these plaintiffs specifically, should be deterred from prosecuting infringement claims as plaintiffs did in this case.' This is the same case in which (a) the RIAA insisted on interrogating Ms. Andersen's 10-year-old girl at a face-to-face deposition, (b) the defendant filed RICO counterclaims against the record companies, and (c) the defendant recently converted her RICO case into a class action"

Related Stories

[+] Mothers Taking the Fight to the RIAA 635 comments
An anonymous reader writes "p2pnet is reporting that two more single mothers are refusing to be victimized by the RIAA. Patricia Santagelo was one of the first to stand up and fight the lawsuits, which some say resemble protection racket schemes. Now Dawnell Leadbetter of Seattle and Tanya Andersen of Oregon have decided to follow suit and stand up against the recording industry behemoth. From the article: 'Don't let your fear of these massive companies allow you to deny your belief in your own innocence. Paying these settlements is an admission of guilt. If you're not guilty of violating the law, don't pay.'"
[+] RIAA Going After a 10-Year-Old Girl 510 comments
NewYorkCountryLawyer writes "The latest target of the RIAA's ire is a 10-year-old girl in Oregon, who was 7 when the alleged infringement occurred, and whose disabled mother lives on Social Security. In Atlantic v. Andersen, an Oregon case that was widely reported in 2005 when the defendant counterclaimed against the RIAA under Oregon's RICO statute and other laws, the defendant's mother sought to limit the RIAA's deposition of the child to telephone or video-conference. The RIAA has refused, insisting on being able to grill the little girl in person. Here are court documents (PDF)."
[+] Class Action Initiated Against RIAA 315 comments
NewYorkCountryLawyer writes "Ever since the RIAA's litigation campaign began in 2003, many people have been suggesting a class action against the RIAA. Tanya Andersen, in Oregon, has taken them up on it. The RIAA's case against this disabled single mother, Atlantic v. Andersen, has received attention in the past, for her counterclaims against the RIAA including claims under Oregon's RICO statute, the RIAA's hounding of her young daughter for a face-to-face deposition, the RIAA's eventual dropping of the case 'with prejudice,' and her lawsuit against the RIAA for malicious prosecution, captioned Andersen v. Atlantic. Now she's turned that lawsuit into a class action. The amended complaint seeking class action status (PDF) sues for negligence, fraud, negligent misrepresentation, federal and state RICO, abuse of process, malicious prosecution, intentional infliction of emotional distress, violation of the Computer Fraud and Abuse Act, trespass, invasion of privacy, libel and slander, deceptive business practices, misuse of copyright law, and civil conspiracy."
[+] Oregon AG Seeks to Investigate RIAA Tactics 114 comments
NewYorkCountryLawyer writes "Turning the tables on the RIAA's attempt to subpoena information from the University of Oregon, that state's Attorney General has now filed additional papers to conduct immediate discovery into the RIAA's 'data mining' techniques. These techniques include the use of unlicensed investigators, the turning over of subpoenaed information to collection agencies, and the obtaining of personal information from computers. The AG pointed out (pdf) that 'Because Plaintiffs routinely obtain ex parte discovery in their John Doe infringement suits ... their factual assertions supporting their good cause argument are never challenged by an adverse party and their investigative methods remain free of scrutiny. They often settle their cases quickly before defendants obtain legal representation and begin to conduct discovery.'"
[+] RIAA Drops Case, Should Have Sued Someone Else 195 comments
NewYorkCountryLawyer writes "Once again the RIAA has dropped a case with prejudice, this time after concluding it was the defendant's daughter it should have sued in the first place. In the case of Lava v. Amurao, mindful that in similar scenarios it has been held liable for the defendant's attorney fees (Capitol v. Foster and Atlantic v. Andersen), the RIAA went on the offensive. In this case there was actually no attorney fee motion pending, making their motion all the more intriguing. The organization argued that it was the defendant's fault that the record companies sued the wrong person, because the defendant didn't tell them that his daughter was the file sharer they were looking for."
[+] News: BusinessWeek Takes On the RIAA 241 comments
NewYorkCountryLawyer writes "BusinessWeek magazine has gone medieval on the RIAA, recounting in grisly detail the cruel ordeal to which the RIAA has subjected a completely innocent defendant, Tanya Andersen of Oregon. Nobody can read the story and come to any other conclusion than that the RIAA and its lawyers are total jerks. Of course we've been reading about Atlantic v. Andersen on p2pnet.net and on my blog, and discussing it here, but there's something extra special about a mainstream publication like Business Week really letting them have it."
[+] RIAA Lawyer Jumps Ship 173 comments
NewYorkCountryLawyer writes "The RIAA's top litigation lawyer, who has been personally leading the RIAA's litigation campaign for the past several years, Richard Gabriel, will be leaving his law practice after getting a job as a state court judge for a 2-year term in Colorado. What this will mean to the RIAA's litigation machine is anyone's guess. Mr. Gabriel has personally argued all of the RIAA's main cases, including Elektra v. Barker, Atlantic v. Howell, Atlantic v. Brennan, Capitol v. Foster, Atlantic v. Andersen, UMG v. Lindor, and London-Sire v. Doe 1, and personally tried the Capitol v. Thomas case, the only RIAA case that has ever gone to trial. He was working directly under the supervision of the RIAA's mysterious 'representative' Matthew Oppenheim."
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  • Precedent! (Score:3, Interesting)

    by superbus1929 (1069292) on Sunday September 23 2007, @04:26AM (#20717605) Homepage
    It seems like 9/10 of rulings in America are based on the ideal of precedent; it's worked a certain way in the past, so we see no reason to go against the grain.

    There are a lot of precedents being set against the RIAA lately, and it leads me to believe that maybe... just maybe... there's light at the end of this tunnel.
    • by MarkRose (820682) on Sunday September 23 2007, @04:30AM (#20717633) Homepage

      There are a lot of precedents being set against the RIAA lately, and it leads me to believe that maybe... just maybe... there's light at the end of this tunnel.

      Tunnel indeed. Hopefully this legal diariaa will have this shit cleared out of the tubes quickly and regularity can be restored.

    • Re:Precedent! (Score:5, Informative)

      by StormReaver (59959) on Sunday September 23 2007, @07:28AM (#20718161)
      Lower court decisions, such as this one, do not set precendents in any court other than their own. If the RIAA were to bring another similar case before this particular court, then this decision could be used to argue attorney fees against the RIAA. No other court is required to consider this result in its own decision.

      If the decision is appealed and upheld, then a precendent has been set for the circuit in which it was appealed. All lower courts within that one circuit would be required to apply the appeals court's decision in all subsequent similar cases.

      See this article [wikipedia.org] for details.
      • Re:Precedent! (Score:5, Informative)

        by NewYorkCountryLawyer (912032) * on Sunday September 23 2007, @07:57AM (#20718277) Homepage Journal

        Lower court decisions, such as this one, do not set precendents in any court other than their own.
        1. That is an overly simplistic view. Yes if there is an appellate decision in one circuit that is binding authority over all district court decisions within that circuit, and it is usually the only absolutely binding authority, other than Supreme Court decisions, on each district court within that circuit.

        2. But it is very very rare that any case is ever determined on the basis of an absolutely binding higher court authority. Almost invariably, where there is such authority available, the attorneys have figured that out long ago and there is no litigation to "decide".

        3. Most briefs that are submitted cite plenty of non-binding judicial authorities, and even where they are citing binding higher authority, it is usually based on vastly different sets of facts.

        4. There are numerous issues in the RIAA cases that will be decided on the basis of the fact that the RIAA has both brought, and pressed, numerous frivolous cases, with no evidence that the defendant committed a copyright infringement, just as was done in the Andersen case. And in those cases it continues to try to extort a "settlement" from the defendant even though it knows it has no case against the defendant. And in those cases where the defendant hangs tough, and is willing to see the case through to its conclusion and a jury trial.... the RIAA drops the case, as it did here. See, e.g., Capitol v. Foster [blogspot.com], Elektra v. Santangelo [blogspot.com], and Elektra v. Wilke [blogspot.com]. This recurring phenomenon will be relevant to future attorneys fees decisions, to possible sanctions motions against the record companies and their attorneys, to the record companies' claims of a "Noerr Pennington" defense which is not applicable to "sham" litigations, to claims of copyright misuse, and numerous other issues, in all district courts across the country, and will be cited by appellate courts when these cases finally do get to the appellate courts -- an event the RIAA is trying to avoid.

        So yes. This judge's recognition of the RIAA's tactics is a very important precedent.
          • Re:Precedent! (Score:5, Insightful)

            by NewYorkCountryLawyer (912032) * on Sunday September 23 2007, @10:38AM (#20718985) Homepage Journal

            Id be interested to know if you thought that the system you described regarding precedents, where they are established and where they are valid is satisfactory, or, if you would prefer either that each case be judged purely on its own merits,
            Precedent is part of the rule of law in our system. Asking judges to decide "each case on its own merits", without regard to legal principles that have been worked out over the years, would

            -leave too much to chance

            -heighten unpredictability, and

            -wreak havoc on our ability to plan our lives. I.e., it would be a step towards lawlessness.
          • Re:Precedent! (Score:5, Informative)

            by NewYorkCountryLawyer (912032) * on Sunday September 23 2007, @11:07AM (#20719211) Homepage Journal

            The expectation by the RIAA of their attempts at extortion being protected by Noerr/Pennington probably encouraged them to start (and to continue) making them......could you give us a little insight into why the RIAA would fail at such a defense?
            1. Well, last week's decision by Judge Lazzara [blogspot.com] in UMG v. Del Cid, rejecting the RIAA's attempt to rely on Noerr Pennington, gives you one of the many reasons.

            2. Defendant's opposition papers in Lava v. Amurao [blogspot.com] and our opposition memorandum in UMG v. Lindor [blogspot.com] give you some others.

            3. I can't here discuss with you all of the many reasons the RIAA's attempts to hide behind Noerr Pennington will fail, since the RIAA lawyers seem to read everything I write on the internet, but if you follow the legal documents filed on my blog you'll no doubt see more on the subject.

            4. By the way, I doubt that they thought about Noerr Pennington when they started doing the illegal things they do; I think N-P is just an afterthought their lawyers came up with in hopes of preventing the Courts from finding out about their illegal conduct. But it will all come out. In the Napster case they lost their attorney client privilege by reason of the fact that their attorneys had lied to the US Department of Justice team investigating their digital music price fixing scheme. See "Court Finds Reasonable Cause to Believe that UMG and Capitol Deceived United States Dept of Justice" [blogspot.com], Recording Industry vs. The People, April 21, 2006.
        • Re:Precedent! (Score:5, Informative)

          by NewYorkCountryLawyer (912032) * on Sunday September 23 2007, @08:44AM (#20718455) Homepage Journal

          Actually, this "court" doesn't set any precedent at all. Magistrate "judges" aren't actually judges: they're Article II employees, created by Congress, who serve at the whim of actual judges, i.e. Article III Judges. Magistrate Judges cannot actually do anything: their entire power comes from their parent district court's approval.
          1. They certainly are judges. They are not life tenure judges, but they are judges.

          2. They do not serve at anybody's "whim".

          3. Magistrate decisions are ctied all the time.

          4. There are many instances in which they have binding authority in the matter before them.

          5. As the underlying article [blogspot.com] makes perfectly clear, this was not a binding authority, but awaits approval by the District Judge.

          6. I'm not saying it doesn't happen, but in 34 years of working in the litigation field I cannot recall ever having seen a District Judge reject the Magistrate Judge's findings. Usually Magistrate's "recommendations" -- like this 15-page decision -- are extremely thorough.
      • Re:Precedent! (Score:4, Insightful)

        by the eric conspiracy (20178) on Sunday September 23 2007, @12:50PM (#20720029)
        Poppycock. Common law embodies a heritage of freedom. Code Napoleon embodies a heritage of state dictatorship. Instead of a body of of laws imposed by a central authority to govern every possible situation (and no doubt to the benefit of those with the money or position to influence the shape of those laws) Common Law provides a mechanism where laws arise from the lower levels of the legal system and percolate upwards through the system. And the idea the precedent is immutable is fatuous. Precedent is a living body.

        Louisiana has been using the Napoleonic system since it joined the US. I can tell you from having lived and worked in that state that their legal system is no better or worse than any other state- it is in fact the implementation and administrators that govern the effectiveness of the system. And in Louisiana they certainly have no special competence.

        Yes, common law is more chaotic. It is also a far older system which has a much longer track record of success.

  • by User 956 (568564) on Sunday September 23 2007, @04:31AM (#20717635) Homepage
    when plaintiffs dismissed their claims in June 2007, they apparently had no more material evidence to support their claims than they did when they first contacted defendant in February 2005

    You'd think it would take them a lot less than two years to fabricate the proper evidence. Maybe their "research" team is running a backlog of cases and this one fell through the cracks.
      • by User 956 (568564) on Sunday September 23 2007, @05:01AM (#20717749) Homepage
        Something you have to realise is that the RIAA thinks they're the good guys here, defending their historical industry against the eeeevil pirates.

        They do think they're the "good guys", which is more of a motive than you might think [slashdot.org]. When you're the "good guy", your own misdeeds can be morally justified (at least in your own mind) because your overall mission is "good", not "evil".
        • I think this applies: Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end, for they do so with the approval of their consciences. -- C. S. Lewis
            • by ScrewMaster (602015) on Sunday September 23 2007, @12:48PM (#20720011)
              Well, either way I'd say the robber baron appellation is a good fit. Give us your stuff, or we'll just bop you on the head and take it.

              Speaking of money, I had always thought the RIAA was funded by the various member corporations, and was to some degree subject to their will. With the RIAA extracting substantial sums from these settlements, are they functioning now as an independent profit-making enterprise? Are they operating this lawsuit mill at a loss? If not ... where does the money go, anyway?
  • by Nymz (905908) on Sunday September 23 2007, @04:52AM (#20717725) Journal
    Most everyone already knew that settling for a few thousand is worth it, versus the incalcuable time and money and headaches of fighting the RIAA extortion racket. So while I'm glad a single judge was able to figure it out eventually, will this case really have any significant impact upon future threats from the RIAA? Without some explicit legislation (a law) that protects citizens fair-use rights, paired with reasonable copyright protections, I just can't imagine any court procedings fixing our societal dilemma.
        • by Nymz (905908) on Sunday September 23 2007, @07:11AM (#20718079) Journal

          Unless the recipient seeks independent legal advice from someone who's actually aware of these cases before settling, the short answer is "Not a lot".
          Serves them right. If they had been reading Slashdot everyday, then they would have known better :-)
  • by Newer Guy (520108) on Sunday September 23 2007, @02:09PM (#20720639)
    That's the attitude the RIAA and MPAA have towards their customers-and they wonder why their customers are voting with their feet in droves! Yes, downloading has a small effect on their sales, but it's their complete lack of customer service that's their biggest problem! Look, if I go to a grocery store and time after time either can't find what I want or the it's packaged so I have to buy five pounds of hamburger or rice when I only want one pound of it, and/or am treated rudely by their staff, I'm simply going to say; "Hasta la Vista, baby!" and go to another store. Yet, that's EXACTLY the way the music and movie industries treat me. Big problem for them is there are OTHER things I can spend my money on that I get enjoyment from. Look at iTunes-they provide music in a user friendly way and provide a no hassle way for me to buy EXACTLY what I want-WHEN I want it! No wonder why they've sold over a billion songs in such a short time. If everyone was pirating content, they'd have NO business! The thing I can't understand is Congress' hard on to pass laws friendly to the music and movie industries. You don't see them passing laws requiring me to shop at Safeway, for example. Are they THAT corrupted?
  • by scottsk (781208) on Sunday September 23 2007, @03:58PM (#20721479) Homepage
    Gotta love the irony ... the RIAA members spent a couple of decades pumping out filthy rap trash as mainstream "entertainment" which encouraged people to break the law in more ways than I ever thought possible. Now, when they need it the most, they can't get anyone to obey the law! Instant karma got 'em!
      • by janrinok (846318) on Sunday September 23 2007, @05:23AM (#20717815)
        Although I shouldn't respond to you - I will. This is nothing about Americans not paying their way. This is about cases being brought to court with inadequate evidence, or simply no significant evidence at all, in a hope that the case will either be settled by the defendants simply to avoid the expense of the case - but not as an admission of their guilt - or as a way of frightening others. If they had adequate evidence then the case should be in court, but they haven't. And recently we have learnt that MediaDefender, the company that collects evidence on behalf of many of these cases, are not beyond fabricating evidence or using very dubious tactics indeed in order to frame individuals.
      • by CRCulver (715279) <crculver@christopherculver.com> on Sunday September 23 2007, @06:35AM (#20717961) Homepage

        Copyright is a fairly recent notion, as it popped up only four hundred years ago or so, and in a small part of the world. Long before that--and today in places were copyright is not respected--culture and content continue to abound.

        Think about all the great poets and philosophers of Greece and Rome. They didn't get a dime when copies were made of their work by amanuenses and sold in the marketplace, but they didn't complain. Indeed, the only time someone had issue with copying, the Roman poet Martial in his Epigrams [amazon.com] , it was because another fellow was putting his name on those copies. And even then, Martial didn't demand legal penalties; he just lampooned the guy.

        In Hong Kong, the film and music industries continue to flourish even though very few pay for content, as creators there have discovered other viable economic models. In the European Union especially, many forms of art couldn't generate a profit even if all copies were sold, but government subsidies ensure culture remains vibrant.

        • by Garwulf (708651) on Sunday September 23 2007, @01:00PM (#20720103) Homepage
          "Copyright is a fairly recent notion, as it popped up only four hundred years ago or so, and in a small part of the world. Long before that--and today in places were copyright is not respected--culture and content continue to abound."

          That is a very simplistic way of looking at things. It assumes, among other things, that all cultures have the same nature, and that therefore copyright isn't necessary. And that is very historically ignorant. The nature of cultures in the past was not the same as it is now.

          "Think about all the great poets and philosophers of Greece and Rome. They didn't get a dime when copies were made of their work by amanuenses and sold in the marketplace, but they didn't complain."

          Actually, that's not true. We honestly don't know if they were paid royalties or not. We do not seem to have any defenses from the Athenian law courts regarding copying, but that just means that none survived to us - there may or may not have been any. The current documents that have survived suggest that the Athenians were not suing people over copying, but we honestly don't have enough recovered to know for certain.

          Aside from which, neither ancient Greece or Rome had a concept of individual rights. People would be sued based on a failure to carry out their responsibilities, but the rights of the individual was a concept that was centuries in the future. There was a concept of obligation, and that went right through to Christian times (for example, in terms of religion, the Romans didn't like the Christians because they didn't fulfill their obligation of joining the rest of their community at sacrifices, meaning that they were not "doing the sacred things" (aka "sacra facere") - and meaning that bizarrely to our conception of religion, the Christians were persecuted for being atheists).

          "Indeed, the only time someone had issue with copying, the Roman poet Martial in his Epigrams , it was because another fellow was putting his name on those copies. And even then, Martial didn't demand legal penalties; he just lampooned the guy."

          In fact, there was a law I recently learned about passed by the Emperor Augustus that declared that the content being copied belonged to the copyist. That being said, in Ancient Greece and Rome ridicule was a corrective, and it could be very dangerous to somebody. There is at least one case on record of somebody committing suicide because of slanderous poems being written about them (I know because I've spent the last two years working on a book about ancient Greek and Roman humour with a professor of Classics).

          I can't speak for the law outside of Europe, but my own inquiries into the history of copyright have suggested that in order for a concept of copyright to develop, there needs to be certain factors in play:

          1. A concept of the rights of the individual.
          2. The technology to mass produce copies of the work (without this, copying is not an issue).
          3. A society capable of mass consumption of the work (for literature, a literate society, etc. - and again, copying is pointless if there is no market to consume it).
          4. A free market economy (extremely important, as it means that there is a financial stake for whoever is copying, and whoever creates).

          Without all of these, there can be no development of the concept of copyright. As soon as all four appear, however, copyright follows. The Stationer's Log (the earliest form of copyright in England) was at the dawn of this, but copyright as we know it didn't come until 1705 - and at that point, the patronage system was beginning to disappear, society was literate and the printing press had been around for a while, there was effectively a free market economy, and the rights of the individual had become prevalent enough that two revolutions would occur within the century over them. A lot of people may not like to hear this, but copyright did develop naturally as the circumstances developed so that it became necessary.

          "In Hong Kong, the film and music industries c
          • by totally bogus dude (1040246) on Sunday September 23 2007, @06:48AM (#20718009)

            Because they can. Seriously.

            See, the value of it is very very low. The asking price is considerably more than that. Therefore, most people wouldn't seriously consider buying it at the asking price, and will simply go without, or wait until it comes onto TV and then record it, or buy it second hand, or whatever.

            Digital content provides another option, and one which is quite convenient for many people at that. It's so convenient that many people pay for fast internet connections specifically so they can download things; and many of these people also wear part of the cost of allowing other people to access the content too! Which just goes to show, the content does have some value, it's just much less than the content producers want to charge for it. Also, since the content producers aren't making it available in a convenient and affordable manner, the money is going to those who do: ISP's.

            Previously, Big Media have been able to charge whatever they wanted, because it was impractical for anybody else to distribute it. Now, it's cheap and easy to distribute high-quality copies of the content to hundreds of thousands of people worldwide. Eventually, the content producers will have to accept that they can only charge what the market is willing to pay, but for now they're just throwing a tantrum and calling everyone who doesn't value their content as highly as they do "thieves".

            • It's not just that its too expensive. They are so used to the old system that in many cases I can't even buy what I want.

              I'm the sort of person who buys what he likes.. I prefer to give money to people who provide me with entertainment. My usual MO is to download what I want and if I like it I will look for it on CD or DVD and purchase it. I have a strange collection of movies and many of them were downloaded before I bought them. I make good money and I'm more than willing to share some of it with people who make my life more enjoyable.

              When it comes to TV shows I find I can't even buy what I want. It's just not available. My choices are to either download it or sit during the time they put it on the TV and watch it and there is my problem. My evenings are MINE to decide what to do with. I'm not going to give up hanging out with friends just so I can sit and watch TV. I'm not going to give up making extra money to sit and watch TV. I'm not going to give up weekly church events to sit and watch TV.

              So I download and hope whoever ripped what I want didn't do too bad a job of it. But you know what? My time is expensive. I would happily pay someone to make sure that whatever I got was good quality. But they simply don't provide that service.

              How did things get so completely backwards? What happened to customer convenience? The whole point of capitalism is to provide a SERVICE. When the customer wants a service the customer pays for it and gets what (s)he pays for. Give me what I want(entertainment) and I'll give you what you want(money). Instead we have an organization that expects me to make changes for them and do business at their convenience. And then they have the nerve to feel entitled to this arrangement.

              They need to get over themselves and start providing a service again. Until they do that: I'm stuck downloading.
              • by totally bogus dude (1040246) on Sunday September 23 2007, @11:28AM (#20719375)

                It's not theft, because you're not depriving the producer of anything. In your gadget example, those gadgets a) cost money to produce and b) selling them is the only way for the company to recoup its costs.

                My downloading a copy of a film or whatever doesn't prevent the producer from being able to sell it to other people. The other big difference is that the outcome, for the producer, is the same whether I choose the legal option (don't buy the content, and therefore never see it) or the illegal option (to download it): they get nothing from me, but I also don't cost them anything.

                It's for this reason that it appears "neutral": I'm not directly harming them by downloading something I would've otherwise chosen to ignore.

                This of course, depends on the idea that you only download things you truly wouldn't buy if you couldn't download them. This isn't always the case, and I guess this is where an individual's sense of ethics comes into it, and why distributing copyrighted material without the copyright holder's permission is against the law. On the other hand, quite a few people do buy things they've already acquired by downloading them (myself included), and in many cases had they not being able to try it out "for free" they wouldn't have bought it. There's also the potential for increased word-of-mouth advertising: downloaders telling their friends, who go out and buy the DVD because they actually find it more convenient than downloading, or more people watching it on TV resulting in more advertising revenue. And, since downloading and sharing is an "underground" activity (due to it being illegal), it's nigh impossible to track with any kind of accuracy the nett effect of downloading. So, those in favour of it say it actually helps them sell more stuff, and those opposed say it decreases sales. Both sides are just making stuff up, because nobody actually knows.

                Back to your gadget analogy, it would be more accurate to imagine that someone finds a way to duplicate the gadget for a tiny fraction of the RRP. So, he buys one from the store at full price (maybe splitting the costs between a few friends), then he uses his gadget duplicator technology to make limitless additional copies and sells them for a pittance to cover his costs. The manufacturer of the gadget, rather than embrace this new copying technology, continues to make their gadgets the old fashioned way and sell them at the same price. Conscientious consumers naturally choose the cheaper option.

                Even worse, the manufacturer may in fact embrace the copying technology in order to lower their costs, but sells their now much cheaper to produce gadgets at the same price as before. Or, they sell them a bit cheaper but with built-in self-destruction devices so you end up needing to buy it several times over if you want to keep using it (that's my analogy for certain DRM schemes).

                Now, the manufacturer does still need to defray the R&D costs so they can't sell it as cheaply as the guy who merely copied it, but they need to do it in a way that doesn't make the customer feel like they're being ripped off. That's the tricky bit, and the answer may very well turn out to be that spending millions (or hundreds of millions) of dollars making TV shows or movies just isn't a viable use of resources. For example, Prison Break is a reasonably entertaining programme, but is 42 minutes of reasonably entertaining TV really the best use of two million dollars [wikipedia.org] our society can come up with?