NEW YORK, Sept 28 (Reuters) - In the age of iTunes and an-app-for-everything, Joel Tenenbaum's battle with the music industry over illegal downloading seems as relevant as an eight-track cassette.

But it turns out the fight could produce something surprisingly enduring: a change in copyright law.

Back in 2007, Tenenbaum was one of 35,000 individuals sued by Recording Industry Association of America in a legal assault meant to discourage music lovers from illegally downloading songs. While the vast majority of rogue downloaders settled their cases, only Tenenbaum and one other defendant hung on for a trial.

Over the course of the litigation, Tenenbaum's testimony earned him some notoriety -- he blamed the downloading on burglars, a foster child and his sisters before finally fessing up -- but the digital-rights community continued to support his case. A friend-of-the-court brief supporting Tenenbaum's constitional arguments was co-authored by members of the Electronic Frontier Foundation, a lobbying group, as well as Stanford and Berkeley law school's clinics on technology and public policy. Harvard law professor Charles Nesson, founder of the school's Berkman Center for Internet & Society, took Tenenbaum on as a client and has been representing him pro bono since 2008.

Now, as Tenenbaum's case enters its next stage, those advocates see a renewed opportunity to push for an answer on how copyright laws should be enforced.

"The system is outdated," said Jason Schultz, an assistant clinical professor of law at Berkeley and the co-director of the Samuelson Law, Technology & Public Policy Clinic. While Tenenbaum is an imperfect - and unsympathetic defendant - he is a vehicle for bringing copyright law up to speed. "It's a real case and a real guy that's been run up for [real] money," said Schultz. A court will eventually make a decision on the issue of appropriate copyright damage, he said. "We're trying to help them make the right one."

$22,500 PER SONG

The stage was set two weeks ago when the First Circuit Court of Appeals reinstated a $675,000 judgment against Tenenbaum, or $22,500 for each of 30 charges of illegal downloading -- a reversal of a trial judge's decision to knock the award down to $67,500. The ruling was a blow to Tenenbaum, who had argued that that the Copyright Act was not meant to be applied to consumer copying and that the recording industry was not harmed. He argued that such a large amount for an individual was unconstitutional and unfair.

"I can't afford the $67,000 it was before. I sure as hell can't afford the bigger amount," Tenenbaum, who now is studying physics as a graduate student at Boston University, told Reuters. He said he will declare bankruptcy if the judgment is upheld.

The Copyright Act, last extensively revamped in 1976, allows plaintiffs to take two approaches to damages. They can either ask for the quantifiable amount of harm caused or seek statutory damages. Today, violators can be forced to pay between $750.00 and $150,000.00 per infringement.

The Recording Industry Association of America and its record-company members maintain that the current law is fair, offers jurors flexibility and provides the proper deterrent to would-be violators.

OUT OF SYNC LAW

In the view of digital rights advocates, however, the law is wildly out of sync with contemporary technology, where nearly every device allows users to make and upload copies of nearly anything.

In the Tenenbaum case, Schultz and others pushing for changes to electronic rights, were hoping the First Circuit would rule on whether or not the $22,500 per violation statutory damage award was unconstitutional. Courts should "ensure damages bear a reasonable relationship to actual harm" and provide guidance on how statutory damages will be imposed so creators can "adequately navigate the waters of copyright law," the Electronic Frontier Foundation argued in its friend-of-the-court brief.

The First Circuit, however, didn't rule on that issue. It sent the case back down to the trial court, not on the merits of the due process decision, but because it felt the lower court jumped the gun on addressing the constitutional question. The First Circuit did, however, walk through discussion points of reducing statutory damages versus limiting punitive damages.

GREATER DISCRETION FOR JUDGES?

One potential outcome in the Tenenbaum case is that a court will decide to rely on the model of punitive-damages style evaluation, giving judges greater discretion to reduce statutory damage awards in copyright cases. Unlike a common law reward reduction, the plaintiff would not have the immediate right to demand a new trial on damages. That would be a "significant change in the process," John Chatowski, counsel at Nixon Peabody who specializes in intellectual property litigation.

The issue could also be resolved by the case of the other remaining individual downloader, Jammie Thomas-Rasset. That case is pending before the Eighth Circuit. To date, a jury has twice levied verdicts of over $1 million against Thomas-Rasset; the judge reduced the damages to $54,000 and the RIAA is appealing. Like Tenenbaum's case, Thomas-Rasset's case focuses on the fairness of these types of awards, and could beat Tenebaum's to a decision.

Tenenbaum's options now are to appeal the First Circuit panel's decision to full First Circuit, to the Supreme Court, or to wait and see what happens when the case is sent back to the lower court. Tenenbaum's lawyer, Charles Nesson declined to comment for this story.

The appeals case is: Sony BMG Music Entertainment, et al v. Tenenbaum, U.S. Court of Appeals for the First Circuit, No. 10-1883, 10-1947, 10-2052.

For the plaintiffs/appellants: Paul Clement of Bancroft

For Tenenbaum: Charles Nesson, Harvard Law School & Founder of the Berkman Center for Internet and Society.

For intervenor United States: Jeffrey Clair.

(Reporting by Erin Geiger Smith)

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