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Music Media

Judge Orders MP3.com to Pay $118M Damages 385

jbridleman writes "Fox News is reporting that MP3 must pay $118M to Universal Music Group for copyright violation. Much less than the $450M UMG wanted." They're calling it willful copyright violation. Says that if MP3.com is forced to pay this much for every album they made available with their beam box software, it could cost them over 3 billion dollars.
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Judge Orders MP3.com to Pay $118M Damages

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  • by lytles ( 24756 ) on Wednesday September 06, 2000 @10:40AM (#800255) Homepage
    first off, most of the (>=+2) comments so far seem to agree with the judge, think that the ruling is fair (perhaps the fine is high). these people and the moderators, need to spend less time sucking on the mass media pipe, and more time thinking for themselves - better yet, given the results so far, they might be better off not thinking for themselves and just spend a bit more time listening to rms, because they have become victims of the riaa/bsa/... propaganda he has cautioned about. you are thinking way inside the box.

    beam it allowed:
    a user to listen to his/her collection of music

    that is all. the judge, and the fools that agree with the decision, have been caught up in the concept that mechanism matters. it does not. so long as the owner is the listener, any number of miles of wire, copper or aluminum or fiber, any transport format, any means of display (speaker or eg braile), is fair use.

    the complaint is that beamit was a performance because it played music from cds mp3.com owned. this is bull. totb.

    beamit's use of the cd serial number is nothing more than a means of compression.

    the copyrighted data was read from the cd, sent to the remote site where it was stored, and then sent to the owner in another location. the format and the compression scheme changed along the way, but the end result is that the owner is listening to his own music
  • MP3.com infringed on UMG's copyrights when it copied CDs to onto Mp3.com's disk drives.

    I'm allowed to copy CDs onto my disk drive. What's the difference?
    --

  • by Luminous ( 192747 ) on Wednesday September 06, 2000 @10:04AM (#800257) Journal
    Actually the figure is based off of a maximum punitive damage of $15,000 per cd. The damage is punitive due to the piracy charge, not simply preventing sales of cd's.

    The judge reduced the amount drastically because mp3.com was acting with much more care and responsibility than other internet start ups. And I believe the fact that UMG was the only label not to settle out of court, the judge made a ruling comparable to those other settlements.

    The ruling, while sucking big time, is relatively fair.

  • by brokeninside ( 34168 ) on Wednesday September 06, 2000 @10:41AM (#800258)
    MP3.com absolutely did not broadcast the music.

    mp3.com did broadcast the music, albeit to a selected audience. However, according to current copyright law, it does not matter whether the person being distributed to has a valid license. It only matters whether the person doing the distributing has a valid license.

    I repeat: under current copyright law, there is no such thing as a 'right to listen.' The only right that copyright law effects is the 'right to distribute.' And without an explicit right to distribute (such as that purchased through ASCAP or a similiar group), the only distribution rights that anybody has are those that fall under the notion of 'fair use.'

    I don't buy for one second that my.mp3.com falls under any sort of fair use. And apparently, the courts did not either.

  • It's a $250 million aware, not $118 million. I'm not sure where people got the 118 number from. It's not in the article anywhere....
  • When I say comparable, I am saying within the same realm as the other settlements, which were actually around $20 million. $118 million is considerably more than that, but drastically less than the $450 million UMG was originally asking for.
  • That, in my book, is not "honest business".
    Technically, yes, it seems they broke the law. But many people think that what my.mp3.com did with their Beam-It app should not be illegal. The law is wrong. Distributing copyrighted material to people that have already paid for the copyrighed material should not be illegal.

    I think that MP3.com was trying to be an honest business, but the IP laws in this country are so screwed up that they made an honest mistake.

    Torrey Hoffman (Azog)
  • As much as I hate to say it, MP3.com was engaging in distributing copyrighted material without permission and deserve to lose the case

    They distributed it to whom? People who had already paid for use of the copyrighted material. Does this require permission from the copyright holders?
    --

  • Well lets be honest now... Earthlink had the permission of the copyright holders to do that.

    Yes, in a way, by putting it up for all to see, CNN (for example) is giving permission for the data to be copied anywhere.

    That's not quite right though. What if I printed off the CNN.com website and started handing out the copies to people? And charging enough to make a small profit since I'm giving them a more portable copy? Would that be okay? I'm guessing "no". So how is this different from the ISP case? I don't think it is.
    --

  • They're playing this game of whack-a-mole. Wonder if they'll manage to whack all the moles...
  • MP3.com infringed on UMG's copyrights when it copied CDs to onto Mp3.com's disk drives

    Nonsense. Ass/u/ming that mp3.com owned the CDs, they can copy them all they want, put them on hard disks, etc. without owing a dime. Copying the data to other media wasn't infringement. Sharing/redistributing ("beaming") the data, on the other hand, was infringement.


    ---
  • Too late buddy. The MP3 owner has actually bought this one. Check.
  • I guess that proves that if you go against the grain and say "Good verdict" in the subject, you can get marked up no matter what you say.

    Anyway, with mp3.com, copyright holders see the money for every person that listens to the music. Big diff' 'tween napster and mp3.com.
    --

  • by rw2 ( 17419 )
    They should send them $118M in Holiday in towels. Think they'll get it?
  • I don't like this ruling, but I think it's probably "right" in the eyes of the DMCA. On the other hand, I think the judge missed a perfect opportunity to apply some real Solomonesque justice here. There is clearly an enormous desire on the part of the consuming public to be able to download music via the web. The RIAA and friends have been unable or unwilling to meet this demand, and thus companies like MP3.com and Napster have appeared to fill the vacuum. I think the ideal resolution for this court case would have been to find MP3.com guilty as charged, but set aside the damages until the RIAA supplied a viable, approved method of distributing digital music via the web.
  • I should have been more specific. There are two copyrights, the copyright on the composition and the copyright on the phonogram (record/tape/CD). The phonogram copyright holder does not get royalties, only the composition copyright holder.

    If I record a cover of Purple Haze, and it hits the top 40 on radio, the Hendrix family gets royalties and I get nothing.

  • Radio stations pay royalties to the composers via ASCAP and BMI. The performers and copyright holders do not get royalties.
  • by Speare ( 84249 ) on Wednesday September 06, 2000 @10:14AM (#800284) Homepage Journal

    The artists don't see enough of the profits from a CD. And that's why we've flocked to Napster and Gnutella and the like.

    While I agree with the overall tone of the poster, that line is so full of baloney.

    People "flocked" to Napster because they could finally used their dormroom ethernet or cablemodem for something other than Porn or MMORPGs. People "flocked" to Napster because they could listen to music and decide if they liked the music without buying the CD [some did buy, some didn't buy].

    You don't find ways of spending zero, if you're worried that one of the two selling parties is already getting shafted when you spend non-zero.

  • I still think the BeamIT software was not a copyright infringement. How can it be an infringement if I can listen to only things that I own? They are just adding value to my CDs, for no cost to me. How does that infringe on a copyright? They are like my own radio station. Radio stations don't infringe on copyright. but I digress....
  • Not the same thing. Copyright holders of Internet content have - in general - permitted the publishing of their words for viewers to download and read. I think Universal (and the judge) are wrong in this case. However, Universal did not permit my.mp3.com to publish their (Universal's) content to the web.

    --
  • by Anonymous Coward
    Note to self: do not buy MP4 domain name. Wouldn't be able to cover court costs.
  • Clubs/bars pay royalties to ASCAP BMI and the like.
  • by Platinum Dragon ( 34829 ) on Wednesday September 06, 2000 @11:29AM (#800293) Journal
    I have a collection here at home, it is on CDs. Many radio stations digitize their CDs by loading them onto harddrives as part of their daily program. It is cheaper.

    At this point, I guaran-damn-tee someone will bring up the "radio stations pay royalties" point.

    Why do they pay royalties? Because the listeners might not have purchased a copy of the music being broadcast, and the station is running advertisements to make money. That first is especially important here. With radio, the listener more often than not does not have a legally-acquired copy of the songs being played, therefore the station has to pay for public broadcast of that music to people who haven't paid for the music.

    Now, we come to my.mp3.com. I didn't use it, so I don't know if the client and any web pages involved in selecting songs had ads, or if the service itself cost anything - if so, mp3.com loses on that point for profiting from to copyrighted works without providing proper royalties to the copyright holders.. I'll come back to this point with regard to the punishment.

    my.mp3.com and each listener legally purchased the CDs. Each listener had to prove they had the CDs before they could stream the songs from mp3.com. Therefore, both streamer and listener have legal copies, unlike traditional radio. This is where the radio argument falls down; my.mp3.com is not like radio. I can do the same thing by ripping my own CDs, setting up a shoutcast/icecast streamer, but requiring a password to activate the streaming so that not just any joe schmoe can abuse my collection. It's not public broadcast, and as long as no advertising without copyright holder approval is inserted, it can't be subject to broadcast royalties; you're all listening to the same song, it's a private directcast unlike radio that no one else can tap into, and all parties involved have paid for their copies and associated fair use rights. The only potential extra copy being made is the bits being sent from my.mp3.com to the listener, and those fall right back into the ether as soon as the player is done with them; they are not being stored.

    Of course, the bigger reason the record cartel is going after MP3.com for this is so that they don't have any outside competition in the streaming arena; just watch as they all throw up their own Beam-it style services Real Soon Now. And you can bet they'll cost money to use.

    mp3.com should be forced to compensate companies for any ad revenue/subscription fees they made in relation to my.mp3.com. On this point, I don't think "copyright infringment" is the proper term here. Unfortunately, I'm not sure there's a proper legal term for "unlawful profit from use of a copyrighted work". Copyright infringment sounds too much like selling extra copies, while here everyone had a copy, paid for them, and the only extra "copy" was a stream of bits that disappeared after passing through the player software.

    Cyberspace is not meatspace, and should not be defined or limited by meatspace rules, because there are about 6 billion things you can do in cyberspace that are impractical or impossible in meatspace. Millions of copies of a chunk of data can be made and wiped out in a matter of seconds; this, I think, is the reality that nearly everyone - record execs, real-worlders, and geeks - still haven't come to fully realize. It works by different rules by default; therefore, it's absurd to force ethereal, ever-changing and infinitely malleable cyberspace to conform completely to meatspace rules. The implementation shouldn't be the problem here, only proper compensation. I don't think compensation here = $25k/CD, not by a long shot. A better solution would be to determine the ad revenue from my.mp3.com, double that, there's your punishment to be divided between all plaintiffs. Anything more is improper.

    my.mp3.com was a great idea. If there hadn't been an ad near any part of the service, the record companies wouldn't have a legal leg to stand on. Never mind that a lot of legal wisdom and commonly-used analogy collapses when applied to bits, bytes and data structures that can be created and destroyed at will; law and the human habit of making bad comparisons will have the hardest time adjusting to the new world. As it stands, the cartel (actually, the artists, but that's another hill of beans) has a right to be properly compensated for money made off their holdings, but not for any sort of "piracy"; all copies (with the possible exception of one) were meatspace-defined legal.

    What a mess. I guess in closing, I think lot of IP law will have to be rethought and retooled to ensure that what can be done in cyberspace isn't stifled by meatspace rules that make no sense in the ethereal. As long as the holders have been paid for copies and fair use rights, and are being compensated for any ad/subscription revenue, there shouldn't be a problem.
  • PALO ALTO, CA 2:33pm - A 9th circuit judge has ruled that Xerox's photocopy machine is responsible for the last 40 years of piracy of literary works and has ordered Xeros to pay $118 billion in damages to BPAA (Book Publishers Association of America). The judge has further ordered all photocopy machines destroyed as well as the destruction of all information on their construction.

    The case on the RIAA/MPAA vs. God for creating organisms with ears, eyes, and memory, is still pending.

  • .

    --- As I understand it, it's legal for the individual to copy their own CD in this manner, and it is legal for them to pay for a service that acts to fulfill this function. In other words, I can make a profit from copying others work.---

    Well you understand it wrong.
    I also thought this would be a good idea. I wanted to start a franchise called Mp3-to-go in malls, where people would walk in with their CD collection, drop them off at my counter, and much like a one-hour photomart, could come back after shopping and pick up their originals, and their newly made MP3 CD-R's.

    I could sell sound cards, nice computer speakers, maybe some portable mp3 players, etc. Have brochures, booklets, etc to help educate people with the world of MP3's. (for those who need it, like mom).

    The fun part of the research was looking into components needed to RIP and convert MP3's quick enough to do about 100 CD's an hour. (Average person's collection).

    The very UN-fun part of the research was looking into the copyright laws and seeing if I had a leg to stand on.

    Unfortunately, it looked good to start with, but digital backups of copyrighted media don't seem to fall under... well... common sense and logic.
    The only thing that temporarily looked promising was if I turned the business into a library, since they are allowed special scenarios of digital archiving of copyrighted media... but that went no where fast, also.

    The sad truth is, even if someone could come up with a solid plan, the RIAA is going to go after you if you make any kind of revenue based on their copyright material. They spend what... $50 million a year on legal fees alone? They've got the money, and the time.

    The only thing I regret, is that I would have made a secret copy of every CD that a customer would have brought in. I imagine it would have added up quite quickly.

    Rader

  • Where'd $118M come from anyway? When I read it, the article's title says:
    • Judge: MP3.com Violated Music Copyrights, Owes Universal $250M Wednesday

    --
  • Any lawyer could have told them that what they were up to was illegal before they did the R&D - betting your company's existance on beating a legal challenge is not good business practice.

    mp3.com knew the risks...

    Of course they did get all the free PR - something that legal systems like myplay.com seem to be3 missing out on. So much so that I keep seeing posts on /. about how innovative my.mp3.com was despite all their technology having been depolyed months before my.mp3.com by myplay.com.

    give credit where credit is due....
  • In dimes, that is One billion one hundred eighty million dimes.

    Now do a quick calculation how much room a stack of dimes takes up. 10 Dollars in dimes is 100 dimes right. So that leaves us with 11 million dime rolls.

    From there it dont take rocket science to realize that even if that was just 1 cubic inch (seems about right) we are talking 11 million CUBIC inches okay that is about 916 thousand cubic feet. Heh my apartment has about 1200 Square feet and the ceiling is about 8 feet high soo what 9600 Cubic feet, which means it would take roughly 100 of my apartments.. or.. my entire apartment compelx full of dimes right?

    Yes that would be truly amusing to pull up 10 semis full of dimes.

    Jeremy 11,800,000
  • Fine, is there a cddb.com like database we can check to see if the CD we're about to buy is represented by UMG?
  • Would it be viable if we only went to Cheapo Records from now on and only bought USED CDs? I mean, money's changed hands already, and I don't see how they'd profit off a sale of a used CD for less.

  • I still think the BeamIT software was not a copyright infringement. How can it be an infringement if I can listen to only things that I own?


    I HAVE IT! What we need to do is work with BeamIT and patent the idea of identifying serial numbers of owned copyrighted material, and making that material available through the web only to the owner.. We could abstract the concept to just about anything, including DVDs, OS backups, etc.

    Now here's the genious.. NEVER implement it officially. Sure, give the go-ahead to rogue intranets, since we're not monsters. The trick is that MS, AOL or even better yet, some other major member of RIAA or MPAA is going to someday get a CLUE and figure this out. Charge them out the wazoo.. We're talking Billons to the patent holder, since MPAA and friends will learn that they either do it this way, or lose everything in time. :)

    Better yet, screw you all, I'll do it myself. :P

    -Michael
    Making a better world..
    For me!
  • by weston ( 16146 ) <(westonsd) (at) (canncentral.org)> on Wednesday September 06, 2000 @10:19AM (#800310) Homepage
    Mp3.com may very well be guilty under the law of copyright infringement. They do indeed seem to have distributed copyrighted works they didn't secure a license for.

    However, compensatory damages could arguably be a sum total of.... $0. Why? If you're looking at lost revenues, then EVERYONE they distributed to ALREADY had the CD in hand. Everyone distributed to either already had purchased, or had the power to create unauthorized copies without the help of mp3.com. There is no such thing as the sale of a recording lost to mp3.com's service. So why any judge should award compensatory damages is beyond me. Absolute worst case scenario should be that mp3.com might have to give up the some large portion of an estimate of the amount of revenue they received from the BeamIt service.

    Now, punitive damages might be different story....
  • by Chris Johnson ( 580 ) on Wednesday September 06, 2000 @11:37AM (#800314) Homepage Journal
    mp3.com paid me :) I got a check which I _ran_ to deposit, for a bit over $250. (Supposed to be over $400 but that was before taxes... I'm not even going to ask, lucky to have anything.)

    I never did agree to their new artist agreement- slashdotter mp3.com artists, don't agree to it, it gives mp3.com perpetual rights to your stuff and is unilaterally changeable by mp3.com on five days notice and _you_ have to keep hunting for notices, they won't actually _inform_ you of a change. Anyhow _I_ didn't agree to this and I'm now busily taking over for what they used to do for me, with a twist.

    I'll be getting rid of the mp3.com site ASAP- go ahead and download anything if you want but I don't expect to get a cent from this or from any current CD sales. The other local bands ought to be happy 'cos I tend to monopolise the top 20 charts in my town *g* sometimes my stuff has _been_ the top 20. Now they can feel like rockstars- paying a damned high price for it with that dangerous artist agreement. Again, mp3.com is no longer safe to host your music at- they're not as bad as farmclub but they could be just as bad in five days flat with no direct notice to you.

    I've ordered a CD burner- and I'm making an order for 100 Mitsui gold/gold _printed_ CD-Rs. We're talking over three dollar media here- $3.29 _per_ _blank_. I'm setting up a situation where I have a 'house label' with _extremely_ posh impressive media and packaging- which has a lighter area, to silkscreen or simply _write_ in specific information about the CD. The place I'm getting the CDs from is synthemedia.com, let me get my orders in first now ;) there are some lovely details about this arrangement, for instance the full-bleed printed-white-surface CDs not only look terrific but Mitsui gold/gold is supposed to have better archival status than even commercial aluminum CDs, lasting for over 100 simulated years in destructive climate testing.

    The neatest part is- instant super small pressing runs with flashy packaging. I'm going to start fishing for recording studio business at my usual $75 an hour- and each hour gets a free fancy CD of the final project. (haven't worked out the details on stuff like 'burn time' for large numbers of CDs- should talk to my bank about financing a duplicator if it becomes a serious constraint). For advertisement I can have a bunch of the CDs around town, with an audio demo recorded on it.

    The overall idea is to assault the major label industry machine on a basis of quality- hit them with the appearance of indie CDs coming out, that are not only higher quality audio, but are flashier CD prints (a lot of major label CD prints seem to be one or two color prints! Cheap bastards...) and a range of music availability that (due to extremely low production runs) can afford to be absurdly eclectic and specialised- and the media is rated to last much longer under normal conditions- AND you're allowed to copy it and make mp3s of it and put it on your computer for noncommercial use- 'fair use'. (*g* I'm tempted to start talking in terms of warranty replacement of media. What kind of warranty do you get on major label releases? ;) )

    Looks like airwindows will finally start to come into its own with all this- I have to be grateful to mp3.com for going down in flames at this time, because it gave me the massive kick in the butt to stop thinking like a musician (wanting to buy a Yamaha DX7 and rebuild my fretless electric guitar) and start thinking like a studio owner/indie label (buying the MEANS OF PRODUCTION). Looks like it's about time to revise airwindows.com to focus on the stuff I'll be doing along these lines, too. It's more fun sweeping the floor when it's your own store ;) and I hope to be doing stuff that slashdotters will find insanely cool.

    Thanks mp3.com- it's been real- hope your bigwigs have good golden parachutes. Thanks for the $260, keep the change, and who _did_ you get to write up that new artists' agreement? Universal lawyers?

  • by Sloppy ( 14984 ) on Wednesday September 06, 2000 @10:55AM (#800315) Homepage Journal

    MP3.com did have an honest business distributing music in the MP3 format, and the RIAA was unable to touch them. That business involved distributing MP3s by musicians with the musicians' permission. It was great, too, and it openly defied the "music industry" while the industry could only look on in total frustration and impotence, not having a single legal argument against them.

    And then mp3.com did something incredibly stupid: they started their my.mp3.com service, and "beamed" MP3s by musicians who were not signed with mp3.com. That was begging for trouble. I wish they had spun this ridiculous idea off to another company, since now the totally legitimate parts of mp3.com are now endangered by huge settlements.


    ---
  • While there is indeed a big demand for better distribution of music via the internet, this is entirely up to the record companies to decide. You can't legally force the way they want to distribute their music.

    Sure you can; it's called compulsory licensing, and it's why radio stations pay a fixed fee when they broadcast a song instead of individually negotiating with each record label.

    However, that would be something Congress would have to add to the copyright code. Perhaps they should.
  • Well... Musicians usually _don't_ get paid: instead they are given services in exchange for their work. These services include going and recording the work in the first place- the best analogy would be if you, as a computer programmer, were paid by being allowed to use the computer which you were programming on. To make this a better argument let's imagine it's a Cray supercomputer. Then you would be paid by being allowed to program on the Cray supercomputer, and if you do a really good job you lose ownership of your program but don't necessarily end up owing the owner of the Cray a lot of money :)

    There's a reason why programmers buy houses in Silicon Valley and major label musicians file for bankruptcy- programmers are paid for what they do, and major label musicians are not (if they have attack dog lawyers, like Metallica, and a really hard-nosed business sense, they have a better chance, though they still won't be in the same income bracket as the comparable tech professional)

    Oh, and musicians don't necessarily get money from their works after they die, either. Though the power-grab assigning copyright to the labels forever seems to have been disabled AFAIK (due to much lobbying by high profile artists like Don Henley), artists still don't own their mechanicals- the 'masters'- just (hopefully) ownership of the song itself- and even then, only after 20 years when the label can't hang onto it any longer.

    Frankly I think we'd be better off paid _your_ way: a flat salary, something nice and cushy but nothing like winning the lottery. We already have the 'my work belongs to the company' part ;) (no, I'm not actually a major label artist _really_ ;) )

  • I have to disagree. Straight from the horse's mouth: [riaa.com]:
    • The lawsuit is not about any particular format. MP3.com copied 45,000 copyrighted CDs onto computer servers. Whether the copies on the servers are in MP3 or any other format is irrelevant -- the suit is about the unauthorized copying and has little to do with technology at all.

      ...

      However, MP3.com does not own the rights to most, if any, of those 45,000 albums, and it had no right to copy them into a digital music library without getting authority from the people who own the copyrights.

    (emphasis mine)
    --
  • Argh, I can't find the text of Rakoff's ruling anymore, but yes, he agreed with the RIAA on that point.
    --
  • Don't distribute music (you don't have rights to) to people who already paid for the music?
    --
  • Oh, rubbish. When you form a company you get a lawyer. They knew they were breaking the law, they just went ahead and did it anyway. The fact that you and countless others think this law is wrong is irrelevant. You don't break the law as a business unless you're a damned idiot or a plain crook. Either way, MP3.com is hardly coming out of this smelling of roses.
  • by Angst Badger ( 8636 ) on Wednesday September 06, 2000 @11:41AM (#800323)
    Where this really sucks has squat to do with the boring crap produced by the big record companies. I dunno how many of you have looked at what MP3.com does for small acts with their DAM CD program, but it's a pretty cool (and largely cost-free) way for everyone with an unsigned band, be they a big local act or just some kids in the garage, to market and sell CDs of their stuff. I've probably spent more on DAM CDs this year than on anything I've seen in stores.

    Yes, Sturgeon's Law still applies, and most unsigned acts are unsigned because they suck. But with thousands and thousands of acts to choose from, and the option of pre-listening via MP3 (with the artists' explicit consent), it's not hard to find the good stuff, either.

    What the record companies are afraid of isn't piracy. It's the loss of mindshare and their inability, as large bureaucracies, to manage a future music business full of tens of thousands of performers with relatively small audiences instead of a hundred or so industry acts. What we're seeing is the battle between the music industry and the emergence of net-empowered musicians. The future belongs not to a few acts with millions of fans, but to many acts with thousands of fans.

    It will be a shame if this is delayed -- it can hardly be stopped at this point -- by the music "industry".

    --

  • Another situation where people profit from other's copyrighted works without permission:

    Used CD's. The store gets paid for their effort in bringing buyers and sellers together, and they get a bit more on top of that. This is completely legitimate. Yet they're still profiting from other's copyrighted works without permission.
    --

  • They did not have permission to copy and distribute the music in the first place

    There is something called FAIR USE

    That's right... there IS something called fair use, but it doesn't allow redistribution, which is exactly what mp3.com was doing.

    MP3.com may not have had the right to copy this music...

    That's not the point. They have that right under fair use. What they don't have the right to do is redistribute the music, UNDER ANY CIRCUMSTANCES. That is why they were sued and lost.

    Radio stations pay good money to broadcast music, regardless of how many people listen to them, and how many of those own, or don't own, their own copy of that music. It's nice that my.mp3.com was trying to cover their butts by insisting that you have the CD in your CD-ROM drive (once... which brings up the whole borrowing a CD for a couple minutes issue), but they were still redistributing the music without consent.

    I don't like the implications, but they really blew the pooch by not consulting with a knowledgable copyright/IP lawyer first.

    Eric

  • 1) isn't the tax on recording media?

    2) My intention was to point out a case where it's legal to profit from someone else's copyrighted songs.

    Yes, the laws say that mp3.com was wrong. I think the laws should be changed.
    --

  • See www.mp3licensing.com [mp3licensing.com] if you don't believe that. If you're distributing YOUR OWN stuff commercially, these clowns will come demanding a penny per download- minimum of $15,000. This is a very real threat, and I personally cannot wait for Mac ports of Ogg Vorbis and hosting services that appreciate ogg files.

    Until then, I will continue scouting for mp3 hosting sites to let _them_ deal with the risk of this kind of squeeze- if there are any out there which don't have insane clickthrough contracts. I'm a dangerous client- I can read. *g* I swear, too many of these damned contracts and agreements seem to assume the artist doesn't have a functioning brain...

  • What a load. Pennies and nickels are legal tender [snopes.com] according to popular myth debunking site, snopes.com. I worked at a cafe that carted our electric bill in pennies in wheelbarrows to the 'lectric company HQ and dumped it on the floor to protest a nuclear power issue locally.

  • My understanding was that Beam-It software only provided MP3's for CD's users already had. It confirmed the users' ownership by having them place the CD's in and verify the serial number.

    It doesn't matter whether or not the users of Beam-It had the 'right to listen' to the music, what matters is whether or not mp3.com had the right to distribute the music. Your 'right to listen' is non-existent as a legal concept. The only right the court is concerning itself with is the right to broadcast, which mp3.com (rather stupidly) neglected to acquire.

    Think about it, when radio stations broadcast, they don't care whether or not the listeners already have a license to listen to the tunes, but you can bet your sweet hind end that they care about whether or not they have a right to broadcast those same tunes over the air

  • by TheReverand ( 95620 ) on Wednesday September 06, 2000 @10:26AM (#800345) Homepage
    I've got an idea,

    Why don't we go for 15 minutes without thinking about Microsoft? Is that ok with you? Think you can handle it? Different case, different situation, different judge, different crime. Got it?

  • 1) MP3 does have a right to distribute from the ASCAP (see here [audioamigo.com])

    2) Do I have to be licensed from the ASCAP to sell a used CD on ebay? I'm distributing someone's copyright without their permission, and profiting from it.
    --

  • by eddy the lip ( 20794 ) on Wednesday September 06, 2000 @10:27AM (#800348)

    If I only had access to first-tier music distribution, I'd:

    • buy less music ('cause more of what I'd be exposed to would be pure crap)
    • have much more predictable buying habits ('cause I'd be exposed to fewer choices)

    In the end, that's probably a win for the big music distributors. What little they'd lose in revenue from the non-mainstream music loving public they'd more than make up for in being able to more accurately predict music buying trends.

    I'm pretty sure this is what they've figured out too, and they're working on that future.

    Gotta go have some doubleplus goodthoughts.

  • by interiot ( 50685 ) on Wednesday September 06, 2000 @10:27AM (#800350) Homepage
    I bought a portable CD player the other day. I wouldn't have bought it if it weren't for the CD's that RIAA produces. The manufacturer profited from the RIAA's music by allowing me to listen to the RIAA's music in more places. The manufacturer didn't have an agreement with the RIAA to profit from their works. Yet they did it anyway.
    --
  • C'mon siggy use your brain. If a person copies a CD to a hard disk, that is fair use under copyright law. If a business does the same thing in the course of making a bunch of money, that is definitely not fair use.

    The only way the my.mp3.com service could be legal would be if it was operated by a not-for-profit entity, and even then, it would be heavily challenged in court.

  • Kinda for the same reason I can't hold a party in which is sponsors where I make money and play a bunch of music foreveryone, even if I check to see if they bought the cd's themselves.

    I don't know what world you live in, but my people call them bars or dance clubs.

    ---
  • I produce IP on a fixed salary, but both me and the company are opposed to copy protection. Why? Mainly because it's a pain in the ass.

    Also, if someone is unable to backup their software because of copy protection, then when their hard disk goes bad, or the monthly Windoze reinstall reformats it, and they lose their stuff, it would be our fault instead of theirs.

    You can't have copy protection and still allow for Fair Use. There just isn't any way to do it, whether it's software, music, movies, or whatever.

    Note: if someone took advantage of the lack of copy protection in our products, and actually went ahead and infringed, and we found out about it, we'd be all over them like make up on Tammy Faye Baker.


    ---
  • Does anyone know if MP3.com was charged per-CD in their MyMP3 database or was it per download of songs? IMO it seems that an infringement would have occurred only when the song was downloaded but it seems from reading the news stories that they were charged for every title in their database, regardless of whether the CD or song was actually used or not. Doesn't distribution have to occur to commit infringement?
    --
  • You have it essentially correct. I can upload my mp3's into personal lockers to be able to listen wherever I want. But when the company takes it upon themselves to copy all the music without license to make available to whomever proves they have the cd (whether it was bought, borrowed, or stolen) is quite another.

    Of course the next step is to shut down those personal storage sites, which will occur right about when someone realizes they can transfer files between the lockers and suddenly you don't have to worry about download times on Napster anymore.

  • by Galois ( 37155 ) on Wednesday September 06, 2000 @10:31AM (#800356) Homepage
    . . . and the artists will see $0 of it.

    free money for the labels, but since this isn't from the sale of records, it won't go to the artists, and they will get fucked yet again.


    - daniel

  • I wasn't arguing what the reality is, I was arguing what the law is. AFAIK, It's perfectly legal for me to manufacture a CD player and not give any money to the record companies.
    --
  • If the 18yo could PROVE beyond a shadow of a doubt that they're buying the beer for a 21yo, and they could PROVE that they're going to immediately give the beer to the 21yo without doing anything else, shouldn't it be legal for the 18yo to buy the beer for you?

    Of course, it's nearly impossible for the 18yo to prove they won't drink it themselves, thus the law. But if they could, I don't see any problem with it.
    --

  • And if the RIAA were to get wind of it, you'd have lawyers up your ass so fast you wouldn't have time to gasp. As long as it's digital transmission, the content providers want to squash it dead or demand that they get to "control the vertical and the horizontal".

    They can growl and flex their muscles all they want, but would they be legally allowed to squash it?
    --

  • MP3.com was charging for copyrighted materials which they did not own. No trading ever took place, and mechanisms were in place to ensure, at least ostensibly, that no unauthorised trading ever took place.

    That having been said, I personally think the $118M is awfully high (and should be knocked down on appeals). A copyright violation should only be considered when a my.mp3.com user downloaded an mp3. I imagine the damages in that case would be much lower. But what do I know. Turning lead into gold (turning "copyright violations" into cash) isn't my area of expertise.

    - A.P.
    --


    "One World, one Web, one Program" - Microsoft promotional ad

  • > Does he not realize that the "Internet Community" is millions strong, and includes his neighbors,
    > friends, co-workers, kids, and what not? These are the people using services like BeamIT.

    Well-said.

    In a spirit of vicious irony, I present the following sample from NWA's "100 Miles and Runnin'":

    But we got ten thousand niggaz strong,

    we got everybody singin' ma "Fuck da Police" song,
    and while you treatin' my group like dirt
    yo' whole fuckin' family is wearin' ma T-shirt
    For you young 'uns who don't remember, NWA is where Dr. Dre's got his start in 1989-1990. What goes around comes around.
  • I mean, there goes a ton of their investment capital into the pocket of Universal.

    Then again, they couldn't have been too bright in the first place if they thought they were going to get away with this.
  • MP3.com absolutely did not broadcast the music. They gave copies of music to people who had already paid the copyright holders for the right to listen to it whenever and wherever they wanted.
    --
  • Exactly. While people may like to look at the poor shareholders (who admittedly got screwed by mp3.com's poor decision), I'm feeling more sorry for those independent artists who were using mp3.com to distribute (or just give people a place to hear) their music. I personally have found plenty of very good stuff there (like Basque [basquemusic.com]...mmmm) If this ends up being the end of mp3.com they're the ones who are really getting hurt.

    Gee... you'd almost think the RIAA had some sort of interest in seeing mp3.com fail and just happened to get lucky thanks to my.mp3.com....

  • mp3.com should be forced to compensate companies for any ad revenue/subscription fees they made in relation to my.mp3.com.

    Used CD stores profit from songs without having to pay the copyright owners a single cent. Profiting without reimbursement is fine in some cases, I think it should okay in this one too.

    My.mp3.com is adding value to your CD... it tries to allow you to play it more conveniently. As such, it's adding value, and so it should be able to make money from that if people find it valuable.
    --

  • They don't need permission from anyone to copy the music for their own internal use, according to non-RIAA fair-use interpretation (and contrary to YOUR opinion, fully in line with society & court decisions).

    They DID violate distribution rights (from what I've read, they were trying the "quantum" version of information theory - if you can't tell the difference between US doing the copy, or the USER doing the copy, then there is no difference) - which the judge laughed at, just before he threw the book at them...
  • The difference is that myplay only provided the space for people to store mp3's which they extracted on their own. The copyright violation takes place during the distribution and unauthorisded ripping.

    The share feature is like a radio station, your playlist sequencing has to comply with the radio rules i.e. you can't legally put up the whole of dark side of the moon or some similar album.

    Oh.... and myplay is usable over netscape on linux - my.mp3.com kept crashing on me.....

    Hey... they even use icecast - so I'm happy ;-)
  • by Signal 11 ( 7608 ) on Wednesday September 06, 2000 @09:25AM (#800384)
    Somebody mail this judge a clue!

    The reason for the large damages? The judge wants to deter other people from "infringing on copyrighted materials". Anyone notice a drop in music sharing? Anyone? Bueller?

    This is really stupid and I hope MP3.com approves it. There was already an analysis of the My MP3 protocol put up. There was no way to infringe. Period. MP3 is shelling out twenty five thousand dollars per CD - payment for what? If this is the modern definition of compensatory damages, I'm shocked.

  • by Lumpy ( 12016 ) on Wednesday September 06, 2000 @10:32AM (#800385) Homepage
    It is currently very trendy in the legal circles to slam a technology company. These judges want to get a name. (I defended copyrights, can I be a Supreme court judge?) to get higher in their career as poloticians. Is it very obvious as to what is happening, and the mp3.com case was very weak at best. Napster is going to get slammed hard, and then they will try to go after hotline, and all the other "sharing" and "warez" systems that have been here a long time. NOW, if gnutella is able to Hash the searches and transfers or make it impossible to pin down who is offering what (disallow any identity in the system and set up "reflectors" for requests) things will go smoothly.

    I dont care what judge you are and what army you have, you will never stop the sharing of music. We will always have tapes, cd-burners, etc... and the poor teenagers and college students, that when they get older will buy more audio, will probably think twice about actually buying that CD, based on the actions of the industry.

    I know that I will never give money to a Country Club again, after the crap pulled on me in college. (Golfers are snooty buttheads anyways) and my son will think twice about giving a RIAA company money, after the shaft they give to the fans and artists.

    It's a choice of the lesser of two evils.. and they are more evil than copying.
  • by MindStalker ( 22827 ) <mindstalker@gmai ... com minus distro> on Wednesday September 06, 2000 @09:25AM (#800386) Journal
    Maybe they should see if they could pay in stock options! that way Universal would atleast to be forced to take a look at MP3.com's buisness model, something they have obviously not done yet :)
  • 1) Yes, MP3.com, as a business, copied the MP3's. However, I think this should only be illegal if they subsequently give copies of the songs to employees or non-employees who don't already own a copy. I think the "business use" is put there because distributing music internally could cause large financial damages.

    2) Businesses ARE allowed to make money from the RIAA's music without permission. For instance:


    --
  • So does mp3.com. (see here [audioamigo.com]).
    --
  • They knew they were breaking the law, they just went ahead and did it anyway
    I don't think you are correct. If they knew they were breaking the law, I'm sure they knew that the RIAA would be coming after them. And they certainly knew that the RIAA had more money for lawyers, and would sue them until they were a smoking crater in the ground.

    The investors behind the company would have considered these things too, and nixed the project if they thought it was illegal and therefore a financial risk. I'm sure they had lawyers look at it. Maybe they should sue their own lawyers for giving them bad advice.

    And if they really didn't think about it until they got sued, well, even then they could have bailed out, shut the service down, and settled out of court with the RIAA. If they knew they were breaking the law and had no chance of winning the lawsuit, that's the only thing that would have made sense.

    Therefore, even after they were sued, they must have believed they would win in court. Nothing else makes sense!

    If you believe they knew they were breaking the law and would lose the lawsuit, maybe you can explain: Why would they do anything that suicidal? Why didn't they settle out of court? What did they possibly hope to gain?

    Torrey Hoffman (Azog)
  • But it really sucks to be a mole...
  • As much as I hate to say it, MP3.com was engaging in distributing copyrighted material without permission and deserve to lose the case. I think it can be easily argued however that the penalty was too large. I also believe that the fault lies with the government and its inability to establish laws dealing with these issues before they erupt like they have. At the same time however it doesn't give someone the right to violate other's rights because it's over the internet.
  • Yeah, the law does exist. See here [brouhaha.com] for commentary.

    For the actual law, see the Audio Home Recording Act of 1992, Chapter 10, Section 1004(b) [brouhaha.com].
    --

  • Oh, that's simple. People were downloading music.

    Someone said "Hey, this is wrong"

    People suddenly came up with a lame excuse, "Uhh, yeah.... well we're doing it because you ain't giving enough profits to the artists!"

    Some other dude said "Yeah! Yeah! What he said."

  • My understanding was that Beam-It software only provided MP3's for CD's users already had. It confirmed the users' ownership by having them place the CD's in and verify the serial number.

    Granted, this could be hacked pretty easily. But I'm sure the majority of users wouldn't know how, so I'm at a bit of a loss to see where the willful loss is here.

  • Jesus, so now I have to put "the opinions expressed don't reflect those of my employer" just to stave off dickheads like you? If you want to know Naughty Dog's relationship with Universal why don't you email me and ask, instead of showing your ignorance off to the world? Universal published Crash, they don't own this company, and they certainly don't own my opinions.

    Get a fucking life, Mr Whois. We all have to make a living somehow.

  • So they used technology to save space but isn't it like they leased (without cost) space on their server to store music you already own. Guess they (mp3.com) might as well have removed the restriction and stolen some thunder from Napster.

    Founder's Camp [founderscamp.com]

  • Yeah.
  • It wasn't public performance.

    Yes it is. 'Public' is not necessarily plural. Go follow the link and learn what words mean in this context.
  • by Anonymous Coward
    Thank God this Judge had some common sense. The advent of MP3 has been nothing more than a world wide conspiracy of THEFT of artistic rights from copyright holders. How dare MP3.com feel that they could wrench away control of an artist's work. The arrogance of it all makes me sick. Artists deserve the right to control their intellectual property, i.e., their art. Napster & MP3.com have been the #1 enemy of those that create by stealing those creations and giving it to those that feel everything in life should be free -- and making a buck to boot off that theft!!!
  • Well, the horse you're quoting is the RIAA, not the judge, and it's quite contrary to the law as written. If the judge's opinion turns out to be based on the above statements, then Mp3.com's appeal should be pretty easy.

    Again, this assumes that mp3.com owns the CDs that they used to build their library. If they built their library by other means, then I am wrong.


    ---
  • by Anonymous Coward
    You're missing the point here.

    The copyright infringement was because MP3.com copied many CDs themselves. Sure, you can listen to the CDs you own, and the backups of those CDs that you own, but you cannot listen to backups other people made.

    I don't agree with it, but it's the law, and the judge has the follow the laws.
  • The RIAA went ape-shit over them sending electronic version of CD's they owned in streaming form to consumers.

    Streaming audio to those consumers who have paid for it is obviously where the industry is going. The simple solution to the RIAA's problem of people ripping/sharing CD's is not to sell CD's any more! Instead, the consumer will buy a license to stream the audio off some server whenever they like.

    Now whoever offers this service will make a mint of money as people pay various monthly fees for various "packages" as per cable TV, etc. And the RIAA obviously wants to be the only game in town when that day comes, so you can count on them jumping hard, onto the spine of anyone who tries to set up any service similar to this.
  • by mindstrm ( 20013 ) on Wednesday September 06, 2000 @09:26AM (#800426)
    Because.
    mp3.com, internally, bought and copied tons of music to theri servers, to be served over beam-it.

    Yes, it makes sense technically that only you can listen to music you own.. however....
    The fact that you have the right to copy and listen to your own album does not mean that mp3.com has the right to profit off copying others work.
    It's twisted.. but it's fairly straightforward as well.
    They DID copy the artists music, and they DID distribute it, albeit selectively, to other people, and they did NOT have the express permission from the copyright holders.

  • Do NOT try to go into an honest business distributing music in the MP3 format. It will only get you sued into oblivion. Instead, trade MP3s illegally.

    Or so this case would make it seem.
  • by NMerriam ( 15122 ) <NMerriam@artboy.org> on Wednesday September 06, 2000 @09:30AM (#800492) Homepage
    I've always wondered, is there a difference in penalty for WILLFUL and UNWILLFUL violations? Really, I imagine there isn't..

    Of course there's a difference. We recognize the motive in many crimes that are prosecuted -- if you kill someone by accident you'll probably get less time than if you do it on purpose.

    Similarly, if you accidentally copy something (say you don't realize that what you're doing is a copyright violation), you'll likely be told to stop doing it.

    If you do it over and over after being told to stop (and being informed it's a violation of copyright), it's pretty clear you're doing it IN SPITE of the law, and you'll get a harsher penalty...

    I'm an investigator. I followed a trail there.
    Q.Tell me what the trail was.
  • While I agree with you that it shouldn't be copywrite infringment, let me explain to you why it is. While it was of no cost to you, and you paid MP3 no money, and you could only use your own cd's. From the MP3.com side, they were making a profit (from advertising) from other peoples music that they wern't given any rights to. Kinda for the same reason I can't hold a party in which is sponsors where I make money and play a bunch of music foreveryone, even if I check to see if they bought the cd's themselves. Anyways, I digress, btw the reason its different from radio is that radio stations pay cd labels money for the rights to play the records. Its not a huge sum (nowhere close to $118M) but still pretty large.
  • by tjwhaynes ( 114792 ) on Wednesday September 06, 2000 @09:40AM (#800557)

    $118M in fines sounds like a lot of damages - in fact it sound like a lot more money that can conceivably have been incurred by UMG. So are these punitive damages then? Given that market sales continue to rocket up despite all the RIAA media spin that seems to give the impression that the arrival of MP3s is the end of the world as they know it and that they are already having to beg on street corners in order to pay for the Ferrari, I'm not sure where this figure has come from.

    Given that MS gets fined $1M dollars for attempting to put a company out of business by pulling a bait-and-switch, doesn't look like the world is flat on a legal basis does it? The software industry easily pulls into the $100Billion dollar category so I can't believe the stakes are 100 times higher for UMG...

    Cheers,

    Toby Haynes

  • by Anonymous Coward on Wednesday September 06, 2000 @09:35AM (#800579)
    No, $118M in CD's purchased from retail stores, opened and with the words "Used CD" written on them in black magic marker.
  • by raygundan ( 16760 ) on Wednesday September 06, 2000 @09:48AM (#800591) Homepage
    There is some truth in what you say, but you miss some important points. First-- developers like myself are paid by salary, not through some enormously complex royalty scheme like the record industry. I am paid the same as long as I do my job. There is no need for me to produce a "hit", and hence no need for a gigantic internet-programmer-record-label system to promote my work to the masses. Why don't musicians get paid salary? Why are they allowed to collect money from their works a zillion years after they die while my work as a programmer is of no use to me after I write it in most cases? I do not depend on copyright for income. Nor does my company. We depend on the ability to sell our custom software services to other people.

    Second, most of my work is web programming that is quite easily available for download and study against the wishes of my company already. That's how the web design works-- my DHTML, javascript, etc... are all right there in your browser whether my company likes it or not.

    Should we sue browser makers for including a "view source" button? All of our pages are copyrighted! What about the "save image to file" button? Or the ability to save the web page source to your hard drive? We are a profitable and quickly growing web company with hundreds of employees and 5 or 6 offices (I can never remember), yet our copyrighted works sit freely downloadable for the entire world.

    Your argument that wages depend on copyright does hold some merit, but our copyrighted works are totally unprotected and my mom could "pirate" them with a mouse click, yet we have a very successful business model.
  • by WayneGayle ( 107802 ) on Wednesday September 06, 2000 @09:40AM (#800607)
    Why didn't MP3.com start a SEPERATE business for my.mp3.com? Wouldn't it have made alot more sense, considering that what they were doing was very questionable legally, and they KNEW that there would be some legal battle over what they were doing. All the damages accrued on behalf of my.mp3.com is going to pull down mp3.com, which is a great service. Could they have legally formed a seperate company that would have done the same thing but not effect the financial status of mp3.com should it all go down like it has? Is this going to bankrupt mp3.com? bah.

    -WG
  • by burris ( 122191 ) on Wednesday September 06, 2000 @10:35AM (#800624)
    This is really stupid and I hope MP3.com approves it. There was already an analysis of the My MP3 protocol put up. There was no way to infringe. Period. MP3 is shelling out twenty five thousand dollars per CD - payment for what?
    You do not understand. Whether or not the protocol was secure or not had nothing to do with it. MP3.com infringed on UMG's copyrights when it copied CDs to onto Mp3.com's disk drives. That's it. You're not allowed to create an online catalog of music without the copyright holders permission. They wilfully violated copyright in order to directly profit from UMG's music. It doesn't matter that they were only going to beam it to people who already bought the CD. They weren't allowed to make the online catalog in the first place.

    Burris

  • by Anonymous Coward on Wednesday September 06, 2000 @10:36AM (#800625)
    how much do Artists see from that penalty fee? Somehow I think I already know it: 0.00$ Thank you. Well at least the fat boss of can now buy another luxury Yacht in Monaco... Another reason not to buy any music anymore as long as artists and consumers are ripped off by mega-corps with lawyers...
  • by Unreal One ( 21453 ) on Wednesday September 06, 2000 @10:36AM (#800627)
    It says that the judge is trying to send a message to the "Internet Community" that copyright infringement can not continue.

    Who exactly does he think the "Internet Community" is? A limited bunch of hacker punks who are going to see this, get scared, and stop trading MP3?!

    Does he not realize that the "Internet Community" is millions strong, and includes his neighbors, friends, co-workers, kids, and what not? These are the people using services like BeamIT.

    As long as it's available, everyone will trade music and other media as long as it's practical to do so.

    And I agree with previous messages that there really isn't any indication that any copyright infringement ever took place.

    This whole situation is just wrong, and MP3.com is getting the shit end of the stick.
  • by Sloppy ( 14984 ) on Wednesday September 06, 2000 @10:37AM (#800628) Homepage Journal

    So are these punitive damages then? Given that market sales continue to rocket up despite all the RIAA media spin that seems to give the impression that the arrival of MP3s is the end of the world as they know it

    My first reaction was that it had to be punitive, since the RIAA's total loss in sales amounted to about $0.00. After all, despite the fact that my.mp3.com was technically distributing copyrighted content without permission, they were sending it to people who already had it. The challenge/response protocol really looked pretty good. I don't think hardly anyone got sent an MP3 from my.mp3.com who didn't already have the CD, unless it involved people sharing accounts, the way some pirates use iDrives, for example.

    The problem is that we're fooling ourselves by just looking at album sales. RIAA didn't lose album sales, but they did lose royalties. For example, when the radio plays a song, they don't get off the hook for paying royalties just because you, the listener, happen to already own the album.

    Could the lost royalties possibly add up to $118M? That's mind-bogglingly hard to believe, and still suggests that most of the damages are punitive. But I dunno... Consider that they are doing point-to-point transmissions instead of, say, MBONE broadcasts. What if each transmission is required to have the same amount of royalty paid that a radio station would pay (even though there's only one listener)? If so, then it is actually conceivable that they could accrue royalty liabilities at a rate several orders of magnitude faster than a radio station would.

    Just something to think about. I don't know if the $118M figure was just pulled out of someone's ass or what, but it seems possible to me that it might be more compensatory that it first appears.


    ---

  • Thank God this Judge had some common sense. The advent of MP3 has been nothing more than a world wide conspiracy of THEFT of artistic rights from copyright holders.

    Come on moderators.. Mark this guy up as funny. You can entertain the general public, and you get better moderator-karma points because it's an obvious non-flaming opinion. :)

    -Michael

As you will see, I told them, in no uncertain terms, to see Figure one. -- Dave "First Strike" Pare

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