The RIAA has settled its lawsuits against four college students, dropping the suits in exchange for a payment of between $12,000 and $17,500 from each student. The settlements did not require the students to admit any wrongdoing.

The students had been accused of direct infringement (for allegedly offering copyrighted files directly from their own computers) and of contributory infringement (for allegedly running search engines that others used to find infringing files).

The RIAA spin appears to be that the students’ decision to settle on these terms indicates that the students expected to lose on the contributory infringement claim. This spin is, to say the least, implausible. Getting out of this lawsuit for $15,000 or so was a great deal for the students, considering the legal expenses involved in going to trial, and the very real possibility that the direct infringement claim alone would have led to a judgment for tens of millions of dollars.

In my view, these lawsuits tell us nothing new about the legal status of the kinds of general-purpose search engines these students were running. The lessons of these suits are simpler: (1) don’t be a direct infringer, and (2) getting sued by the RIAA is expensive.

Eric Rescorla, in response to my previous entry on music economics, offers an analysis of the politics of copyright.

Roughly speaking, there are two camps working to loosen (or at least prevent tightening) of intellectual property. For lack of better words let’s call them Idealists and Pragmatists. The Idealists really don’t want to have any kind of intellectual property at all. They see copyrights and patents as evil and want to do away them altogether. Richard Stallman and the Free Software Foundation are probably the best-known advocates of this point of view.

The Pragmatists tend to view Intellectual Property as a necessary evil. The traditional economic analysis of IP is that it’s required to incentivize people to engage in the kinds of intellectual effort that produce content. (Boldrin and Levine argue against this, but it’s still the majority point of view in economics). In the view of the Pragmatists, the amount of protection given to IP has gone beyond the point of efficiency and so should be reduced. See the “economist’s brief” in the Eldred v. Ashcroft case for a pretty good exposition of this view.

Both sides agree that protection for Intellectual Property is too tight currently, and so they’ve temporarily made common cause for the purposes of fighting the IP lobby (the RIAA and the MPAA primarily) who want to see copyright strengthened. Despite that temporary alliance, [] there are still a lot of people who don’t agree with Ed’s statement [about the need to pay creators somehow]. These people are quite loud (go check out Slashdot) and they naturally scare the hell out of the content producers, who fear a complete loss of control.

[Though I like Eric’s analysis, I’m not thrilled by his terminology. I would instead label the three factions (which he calls the IP Lobby, Pragmatists, and Idealists) as the “Big-IP”, “Small-IP”, and “No-IP” factions.]

So far, the Big-IPs have done a pretty effective job of cementing the alliance between the Small-IPs and the No-IPs, most notably by treating the Small-IPs as if they had taken No-IP positions. Perhaps this is because Big-IPs overestimate the numbers and influence of the No-IPs. Or perhaps it is because some Small-IPs are being cagey about their beliefs, so as not to alienate their No-IP allies.

If I were a Big-IP, I would be wanting all the allies I could get, and I would be looking for a way to pry apart the Small-IPs and the No-IPs. If the Big-IPs decide to do this, things could get very interesting.

Why should the Big-IPs care what the Small-IPs think, given that the Big-IPs can get their way in Congress without any help? Because Congress, by itself, can’t solve their problem. To solve their problem, the Big-IPs need cooperation from their customers, most of whom are still Small-IPs.

In today’s Daily Princetonian, Josh Brodie reports that an “announcement” will be probably made today regarding the RIAA lawsuit against Princeton student Dan Peng. Reading between the lines, it appears the predicted announcement probably involves some kind of settlement of the case.