The King of Pop, Inc.

Time author Adam Smith recently reported on the debt of the late King of Pop, Michael Jackson. This short, yet reveling, story can be found on Yahoo by clicking here. It is sad when a person of Michael Jackson's vast talent passes on with such staggering debt--reported to be between 300 million and close to 600 million dollars. While much of the reporting on Michael Jackson's debt at the time of his passing is speculation, we do know that he lost his Neverland Ranch to foreclosure as a result of defaulting on substantial loans and that the debt was huge.

Yet, much of the reporting only tells half of the financial story. Michael Jackson enjoyed two valuable commodities during his life that survived his death--(1) intellectual property in the form of music and song catalogs and (2) his name and likeness (i.e., publicity rights). The ability to monetize these assets is legally and financially more significant than the hefty debt his lifestyle created. His estate's earning power will play out in the next few months and years. The income-generating property of Michael Jackson's estate could rival or even surpass that of the other Music King, the King of Rock Elvis Presley.

A playlist for the ages

For those of you who are curious after reading my last post, here are the 24 songs for which Ms. Thomas-Rasset was ordered to pay 1.92 million dollars. This is, without a doubt, the most expensive play list ever created. Yet, you can purchase all of these songs from iTunes for around $23.76. In other words, the judgment was a little more than 80,000 times the actual damages (the lost revenue of the record labels).

1. Cryin by Aerosmith
2. Somebody by Bryan Adams
   
3. Pour Some Sugar on Me by Def Leppard
4. Bills, Bills, Bills by Destiny’s Child
5. Here We Are by Gloria Estefan
   
6. Coming Out of the Dark by Gloria Estefan
   
7. Rhythm Is Gonna Get You by Gloria Estefan
8. Iris by the Goo Goo Dolls
9. Basket Case by Green Day
10. Welcome to the Jungle by Guns N' Roses
11. November Rain by Guns N' Roses
12. Let's Wait Awhile by Janet Jackson
13. Faithfully by Journey
    
14. Don't Stop Believing by Journey
15. One Step Closer by Linkin Park
16. Bathwater by No Doubt
    
17. Hella Good by No Doubt
18. Different People by No Doubt
19. One Honest Heart by Reba McEntire
20. Now and Forever by Richard Marx
21. Possession by Sarah McLachlan
22. Building a Mystery by Sarah McLachlan
23. Run Baby Run by Sheryl Crow
24. Save the Best for Last by Vanessa Williams

$1.92 Million ... Wow

O.K. Let me first say I'm sorry for the lack of postings for the last few months. I have had a lot on my plate this past 6 weeks, for which I will spare you all the details. But I promise I am going to make up for the missing posts over the remainder of the summer.

For those of you who have been following the Jammie Thomas-Rasset saga, a jury has yet again found her guilty of willful copyright infringement--this time, however, they have awarded the labels who sued her $1.92 million. (For those of you unfamiliar with this case please Click here and here.) In her prior trial, which was overturned by the trial judge for an erroneous jury instruction, Ms. Thomas-Rasset was ordered to pay $222,000 in statutory damages. This recent result greatly increases the stakes of this very dramatic test case.

There are so many interesting facets of this case, it is hard for me to pick one to blog upon. One of the recent plot twists that caught my attention was the post-judgment statements of the Recording Industry representatives. The Associated Press has reported that the RIAA has made statements that settlement is still a possibility (see the second link above).

While I believe that such a settlement would be in all the parties' best interests, it will not be in the best interests of the law. Why might a settlement between two private litigants not be in the best interest of the law? Because such settlement agreements almost always contain a clause requiring the defendant (Ms. Thomas-Rasset in this case) to waive any right to appeal the verdict and in return she will have to pay a small amount (around the $3,000 to $5,000 others have paid to settle their file-sharing cases) to the Plaintiffs. Such a settlement will keep the constitutional issues of whether such extremely large statutory-damage awards, ones that are disproportionately large compared with the actual damage done by the file sharing, are unconstitutional.

Many of us in the legal community have been eagerly awaiting a copyright case of sufficiently high statutory damages to trigger an appellate battle that could get the attention of the U.S. Supreme Court. There is little in the way of case law to offer guidance to the intellectual property bar or the trial judges. This could indeed be the case that settles this important constitutional issue--but only if Ms. Thomas-Rasset is willing to continue the fight. Part of me hopes she will and part of me hopes she will come to her senses.