Effects of These Lawsuits

New devices such as the iPod and XM’s Inno allow consumers to enjoy music in ways that were not possible with previous devices and can increase revenue streams for copyright owners. Yet, large copyright owners often view these devices as a threat to their revenue stream and sue device makers in hopes that the law will side with them. Many commentators point out that such lawsuits chill innovation because statutory damages could be awarded against device makers and these awards could easily add up to a huge amount. For example in the lawsuits against XM, both the RIAA and the music publishers claimed statutory damages of $150,000 per song infringed. As Fred vonLohmann of the Electronic Frontier Foundation points out, the RIAA’s claim alone, could add up to $37.5 million! Few device manufacturers would be willing to manufacture and market a device in the face of such massive potential damages.