Jammie Thomas said she expects the record companies to appeal and that the issue of how to interpret copyright law could go all the way to the Supreme Court. (Julia Cheng/Associated Press)

A federal judge granted a new trial to a Minnesota woman convicted of pirating music files in the first file-sharing trial in the U.S., ruling on Wednesday he made an error in the jury instructions that "substantially prejudiced" her rights.

Jammie Thomas was convicted last October and a jury in Duluth found her guilty of copyright infringement for offering to share 24 songs on the Kazaa file sharing network. She was ordered to pay $222,000 US to six record companies.

On Wednesday, U.S. District Judge Michael J. Davis granted her motion for a new trial, while also imploring Congress to change copyright laws to prevent excessive awards in similar cases.

At issue was whether the record companies had to prove anyone else actually downloaded their copyrighted songs, as Thomas's lawyer argued, or whether it was enough to argue, as the industry did, that a defendant simply made copyrighted music available for copying.

Relying on a 1993 appeals court decision, Davis concluded in his 44-page ruling Wednesday that the law requires that actual distribution be shown. In his jury instructions, he had said it didn't.

Thomas said she was "very happy" with the decision, although she said she is not looking forward to going back to court. She was the first of thousands sued by the industry to go to trial.

"Now they're going to have to prove their claims," Thomas said. "They never had to prove anything before. Now they do. It kind of levels the playing field a little bit."

Thomas said she expects the companies to appeal, and that the issue of how to interpret copyright law could go all the way to the Supreme Court.

Judge's ruling could be 'very persuasive' in other courts

Her lawyer, Brian Toder, called the ruling "brilliant" and said that if the case does go to the 8th Circuit Court of Appeals or the U.S. Supreme Court, "having the benefit of Judge Davis's opinion will make my client's case exponentially more compelling."

Andrew Bridges, a San Francisco lawyer and frequent participant in internet music litigation, said Davis's reasoning is likely to be "very persuasive" in other courts.

"This decision is extremely important," Bridges said. "This is the most thoughtful decision by a court yet on these issues."

A spokesman for the Recording Industry Association of America, Jonathan Lamy, said Davis's decision was "not unexpected" given his previous public comments that he thought he had made an error. He said the plaintiffs were still assessing their legal options.

"Regardless of this narrow issue, a jury of her own peers unanimously found Ms. Thomas liable for copyright theft and for causing significant harm to the music community," Lamy said. "We have confidence in our case and the facts assembled against the defendant."

Because he ordered a new trial, Davis didn't directly rule on Thomas's request that he void the $222,000 US damage award as excessive. But he called on Congress to change the federal Copyright Act to address liability and damages in similar peer-to-peer file-sharing network cases.

Davis wrote that he didn't discount the industry's claim that illegal downloading has hurt the recording business, but called the award "wholly disproportionate" to the plaintiff's damages.

The judge said Thomas, of Brainerd, allegedly infringed on the copyrights of 24 songs, which he said was the equivalent of around three CDs that would cost less than $54 US. He said the total award was more than 4,000 times the cost of three CDs.

"The Court does not condone Thomas's actions, but it would be a farce to say that a single mother's acts of using Kazaa are the equivalent, for example, to the acts of global financial firms illegally infringing on copyrights in order to profit in the securities market," he wrote, referring to another case he cited.

Davis suggested that damages that are more than 100 times the costs of the works would serve as a "sufficient deterrent" to illegal downloading. He also stressed that Thomas had sought no profits from her alleged illegal activities.

"Unfortunately, by using Kazaa, Thomas acted like countless other Internet users," he wrote. "Her alleged acts were illegal, but common. Her status as a consumer who was not seeking to harm her competitors or make a profit does not excuse her behaviour. But it does make the award of hundreds of thousands of dollars in damages unprecedented and oppressive."