However, on Wednesday U.S. District Court Judge Michael Davis overturned the verdict, telling the parties he had committed a "manifest error of law" during the trial. Specifically, Davis said he was wrong to instruct the jury that it could find Thomas liable without any proof that "actual distribution" of copyrighted material had taken place.

"Jury Instruction No. 15 was erroneous," Davis said, "and that error substantially prejudiced Thomas' rights. Based on the court's error in instructing the jury, it grants Thomas a new trial."

The RIAA will now have to decide whether to pursue its claim against Thomas again or negotiate an out-of-court settlement. So far, the Thomas case is the only P2P infringement case to go to trial; according to a study by Wired magazine, most of the 30,000 lawsuits filed by the RIAA against individual file sharers have been settled out of court.

What Proof Is Required?

The issue troubling Davis is one that courts have wrestled with repeatedly. Is it sufficient for the RIAA to show that a defendant made copyrighted materials available for P2P users to access, or should the RIAA be required to show that an actual transfer of copyrighted music took place?

As proof of actual distribution, RIAA offered evidence that its investigator, Media Sentry, had downloaded copyrighted materials from Thomas' computer. However, Davis rejected that evidence, stating that a copyright owner (or its agents) cannot violate its own copyrights.

The RIAA was unavailable for comment and has not issued a statement about the decision yet. But in the organization's memorandum to Davis, it argued that requiring proof of actual distribution would make copyright enforcement impossible.

"Because the transfer of files occurs in direct connection between the distributor's computer and the recipient's, there is currently no way to capture the transfer as it happens," RIAA attorney Timothy Reynolds said. "Requiring proof of actual transfers would cripple efforts to enforce copyright owners' rights online -- and would solely benefit those who seek to freeload off [the RIAA's] investment."

The issue of proof is much more difficult for the RIAA because Kazaa, unlike the early file-sharing service Napster, does not maintain a central directory of shared files. (continued...)

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