Reducing MP3 copyright risks

MP3 music files likely take up a nontrivial amount of a corporation's shared file-server resources. This not only constitutes misuse of corporate resources but also, at its worst, could expose the company to copyright-infringement violations for inadvertent housing of illegally obtained MP3 files.

The challenge is in identifying MP3 files on network-attached storage (NAS) devices and shared file servers and removing these files in a timely fashion. Since file-share data grows by more than 70% annually, according to analyst estimates, this type of cleanup is difficult to conduct on a routine basis. For this reason, the need for continuous monitoring and auditing of file-share data use is equally important.

By identifying MP3 file usage, businesses can reduce the risk of copyright infringement. While each scenario is unique, the simple example below illustrates how implementation of technology that generates a regularly scheduled data-use report can help keep companies from being exposed to $750,000 in damages and tens to hundreds of thousands of dollars in legal fees.

Click to see: Detailed Access Summary report showing MP3 file accesses for a given day in April 2006.

Why is it important for businesses to detect and remove MP3 music files? The American recording industry and its trade representative, the Recording Industry Association of America (RIAA), are actively targeting individuals and businesses around the world they suspect of copyright infringement. Consider the following:

* Last October, the RIAA won a jury trial that required a woman to pay $220,000 in damages to six record companies because she illegally downloaded 24 copyrighted songs. (See “RIAA Victory Sends Message But Won't Stop File-Sharing”).

* In September, the RIAA sent “403 pre-litigation settlement letters to 22 universities nationwide” concerning “evidence of significant abuse of campus computer networks for the purpose of copyright infringement.” 

* In December 2006 the four largest music companies accused a Russian site of copyright infringement, seeking $1.7 trillion in damages.

While fines have varied, U.S. copyright law indicates penalties that range from $750 to $150,000 per song. The RIAA Web site also details guidelines and penalties in the section entitled “The Law.” Of course, in addition to these penalties, any business forced to defend itself against copyright infringement will face legal fees even if the issue is resolved outside of a courtroom.

Consider an example of an employee who uses the company network to store and share a collection of 1,000 songs, or the equivalent of about 80 to 90 CDs worth of music. Based on the minimum penalty amount of $750, this translates to potential penalties of $750,000. (Note: the lawsuit the RIAA won in October 2007 placed a value of $9,250 on each song, so the $750/song estimate used here may be conservative.)

A business would also have legal costs whether it settled or litigated. Work conducted by an outside law firm — one that specializes in copyright infringement and litigation — at typical rates of $400 to $700 per hour -- would add tens to hundreds of thousands of dollars in legal costs.