By William Fisher and Christopher Yang
Updated 6/1/2003: Dotan Oliar
Table of Contents
Introduction
Case Studies
Readings
Discussion Topics
Additional Resources
Introduction
Most Internet content today is "served" from a central system that takes
requests from a user's "client." Typically, the user asks for access
to information or other data; the requested content is then "pushed" from
the central system to the user. In this model, the various visitors
to a given web site do not interact. By contrast, peer-to-peer technology
(commonly known as "P2P") creates conversations among individual personal
computers (PCs). In this respect, P2P systems resemble an affiliate
network where information (rather than referrals) is passed along many
people.
P2P interactions are often initiated when one computer asks several other
individual personal computers whether they have a specified file or type
of information. Each computer to which the search request is sent
either responds or, more commonly, forwards the request on to a second
tier of computers, each of which may pass the request onto a third tier,
and so forth. As the request "cascades," content across a wide network
of machines is searched. When a "match" is made, the sought-after
file is transmitted directly to the original requester.
Most applications of P2P technology are wholly benign. Problems
arise, however, when the material flowing through networks of this sort
is copyrighted and is being reproduced without the permission of the copyright
owners. For two reasons, nonpermissive P2P file-sharing of copyrighted
materials is extremely difficult to police. First, the structure
of P2P systems makes it hard for either copyright owners or government
officials to track the movement of copyrighted materials as they pass
from user to user. Second, because P2P systems usually do not employ
centralized transmission nodes or distribution points, they are very difficult
to shut down.
While both the digitization of information and the concept of file sharing
have existed for many years, the advent of the Internet has made P2P copying
possible on a scale never before imaginable. The industry that,
thus far, has been affected most dramatically and visibly by the new technology
is the music industry. The main reason why the action in this field
has been especially intense is that musical files -- especially when compressed
using the popular MP3 format -- occupy relatively little space and thus are
easily transmitted through P2P networks. That circumstance underlay
the enormous popularity of Napster , a modified P2P system,
and Gnutella (a
“purer” example of the P2P model without an intervening server).
Using these systems, it is possible for individuals to create libraries
of their favorite songs by downloading free copies of them from the Internet.
Alternatively, individuals can "rip" MP3 files from their own CDs using
inexpensive or, in many cases, free
software designed exclusively for that purpose. Users can then
play-back these files in a variety of ways. They can listen to them
on a variety of portable MP3 devices or directly from their hard drives,
they can send their files via email to other music fans, or they can upload
their files to the Internet for anyone to enjoy. And because the
music is in digital form, each successive copy sounds as good as the original.
The net result has been a radical and rapid shift in the way music is
distributed and consumed. But music is only the first industry to
feel the force of this technological revolution. As the bandwidth
available to ordinary computer users grows, as file-compression technologies
for other types of media proliferate, and as the size of hard drives increases,
all other entertainment industries will likely be transformed in similar
ways.
This module examines the legal and policy implications of P2P technology.
Is it beneficial or pernicious? Is it legal or illegal? Which,
if any, of the participants in the new networks should be liable to the
owners of the copyrights in material that is transmitted and reproduced
without permission?
It is crucial that, before beginning the module, you have at least a
rough understanding of the relevant technology and the principal doctrines
of copyright law. If you feel uncomfortable in either dimension,
you should consult the attached primers on digital music and the basics of copyright . You should then peruse the case studies , which focus on the legal battle over Napster
and the legal status of alternatives to Napster. Next, we suggest
that you examine the Readings associated with the module, following as many of
the associated links as you find interesting. At that point, you
should be well prepared to consider -- either on your own or, better yet,
in one of our electronic fora -- the Discussion Topics . The module concludes with a
substantial body of Optional Related Material .
Back to Top | Intro | Case Studies | Readings | Discussion Topics | Additional Resources
Case Study 1: Napster
The Internet-related controversy that generated the most heat and light
during the past two years was the titanic struggle between the Recording
Industry Association of America (RIAA) and Napster.com . Napster
is not a traditional search engine, but a protocol that enables individual computer users to share information concerning
the contents of their hard drives . Specifically, it enables
a user interested in obtaining an MP3 copy of a particular song to search
the drives of other Napster participants for the song in question -- and
then, after locating a copy, to download it to his or her own drive.
The service proved extraordinarily popular, espcially (but by no means
exclusively) among college students. During the period of maximum
usage of the system (winter 2001), a high percentage of the traffic on many university networks consisted of Napster
searches and downloads.
Aware that its system facilitated the nonpermissive reproduction of copyrighted
material, Napster employed various tactics to minimize its exposure to
liability: it neither stored nor cached any digital music (infringing or
otherwise) on its servers; it trumpeted a " Copyright Policy " in which it disclaimed responsibility
for the activities of its subscribers and insisted that they promise
not to violate the law; and it promised to "respond expeditiously to claims
of copyright infringement committed using [its] service." Unimpressed,
the RIAA
filed suit , accusing Napster of both contributory and vicarious copyright
infringement.
In its defense, Napster made three legal arguments. First, it invoked
the protection of sections 512(a) and 512(d) of the Digital Millennium Copyright Act
(DMCA), which provides to the operators of "transitory digital network
connections" and "Information Location Tools" "safe harbors" against liability
for copyright infringement. Second, Napster argued that peer-to-peer copying
of digital files using its system constitutes ""the noncommercial use
by a consumer" of "a digital audio recording device," which, pursuant
to section 1008 of the Audio Home Recording Act , cannot constitute
copyright infringement. Because its members are not engaged in copyright
infringement, Napster argued, it plainly could not be liable for contributory
copyright infringement. Finally, Napster insisted that a significant percentage of the uses of its system involves
lawful copying of musical files -- either because the owners of the copyrights
in the songs in question do not object to (indeed, encourage) the duplication
of their works or because the character of the copying is such as to make
it a "fair use." Consequently, Napster argued, its system is manifestly
"capable of substantial noninfringing uses," and thus is immunized against
liability for contributory copyright infringement by the decision of the
United States Supreme Court in the Sony case.
At the trial-court level, Napter's arguments fared badly. In April of
2000, Judge Marilyn
Patel rejected Napster's invocation of DMCA 512(a) . On August 10,
2000, Judge Patel rejected all of Napster's remaining arguments
and granted a preliminary injunction against the continued operation
of the system . The Court of Appeals for the Ninth Circuit was somewhat
less hostile. One day after Judge Patel's second ruling, the Court of
Appeals stayed the imposition of the injunction pending an appeal. Oral
argument on the appeal was heard on October 2, 2000. The tenor of the
questions asked by the three-judge panel suggested that they were more
receptive than Judge Patel to Napster's position.
On February 12, 2001, the Court of Appeals handed down its much anticipated
ruling. The three-judge panel declared that Napster must stop trading in copyrighted material
and may be held liable for vicarious copyright infringement. The
company was allowed to stay in business until Judge Patel modified her
injunction, which the appellate court labeled "overly broad."
During the next several months, a complex set of maneuvers erratically
but seemingly inexorably tightened the noose on Napster. In March,
Napster agreed voluntarily to halt illegal song trades by implementing a
filtering system designed to catch copyrighted materials. In response,
Judge Patel opted not to shut down the service and ordered the record
labels to assist Napster in identifying individual infringing file names,
as well as song titles and artist names to be blocked. Within a
week of setting up its filters, the average number of MP3 files shared by Napster users fell close
to 60% according to analysts at Webnoize. By early April, this
number had stabilized to 36% and Napster had blocked 311,000 individual
songs, as well as 142,000 various misspellings of those song names or
artist names. But in a hearing on April 10, 2001, Judge Patel described
Napster's filtering efforts as "disgraceful." Patel suggested that
"maybe the system needs to be closed down" if it was unable to catch all
copyrighted material. Nevertheless, Judge Patel failed to take any
further action against Napster and instead opted to await testimony from
the newly appointed court mediator, A.J. "Nick" Nichols , who also served
as the court expert in Sun Microsystems' suit against Microsoft.
In late April, Judge Patel issued a memorandum requiring the record
labels to identify at least one infringing file on the ever-changing network
before Napster is obligated to block copies of the song. In July,
Napster voluntarily shut down its system entirely in order to retool it.
The record companies argued that Napster should not be permitted to resume
operations until it could guarantee "100% compliance" with Patel's prohibition
against infringing activities. Judge Patel agreed, announcing a
"zero-tolerance" policy regarding the transmission of infringing files.
In March
the Court of Appeals
affirmed her order. Meanwhile, in September 2001, Napster settled
a secondary lawsuit against it by the National Music Publishers Association
(which represents the owners of copyright in musical compositions, not
to be confused with copyrights in sound recordings) for $26 million.
Almost all of the ligitation up to this point had involved struggles
over the issuance of a preliminary injunction. In August 2001, the
record companies sought to move the case forward, requesting Judge Patel
to grant them summary judgment in their substantive case against Napster.
In response, Napster argued that three independent circumstances made
summary judgment inappropriate: (1) the record companies had not
adequately identified and proved their ownership of thousands of songs
that they claim were unlawfully transmitted over the Napster system; (2)
that Napster should be afforded an opportunity to show their entitlement
to one or more of the "safe-harbor" provisions in the Digital Millennium
Copyright Act; and (3) that the record companies have themselves engaged
in various forms of illegal behavior -- most importantly, price-fixing
and other kinds of anti-competitive conduct vis-a-vis music on the Internet.
Judge Patel showed little interest in the first two of Napster's arguments.
She took considerable interest, however, in the third. This was
a potentially explosive development in the case. A finding that
the record companies have engaged in anti-competitive behavior could have
benefitted Napster in several ways. At a minimum, it could have
reduced the damages that the company must pay (on the ground that the
profits that the record companies claim to have lost were based upon monopolistic
pricing). More radically, such a finding could have supported a
judgment that the record companies have engaged in "copyright misuse,"
which could prevent them from recovering at all. Finally, the record
companies could have been held liable to Napster for damages based upon
a violation of the antitrust laws. A ruling by Patel that Napster
could pursue discovery of the music companies' documents relevant to this
issue raised the stakes even further.
Meanwhile, the Napster executives sought to remake the company in two
ways. First, they participated in a consortium of companies that
recently began offering music over the Internet under the trademark "
MusicNet ." Second, they developed plans for resuming operations
on a subscription basis. Money collected from subscribers would,
they hoped, enable them to obtain licenses from the record companies to
use their sound recordings legitimately. In the end, however, these
various efforts to sustain the company as an independent enterprise came
to nought. In May of 2002, Bertelsmann , the music company
that had previously propped up Napster's shaky finances, saved the company
from bankruptcy by buying the remainder of it for $8 million.
Professional and popular reaction to the litigation and to the (pen)ultimate
decision of the Court of Appeals has varied widely. Some members
of the music industry clearly sympathize with the RIAA. According
to Ron Stone of Gold Mountain Management, which represents such artists
as Bonnie Raitt and Tracy Chapman, "[i]t is the single most insidious
website I've ever seen… its like a burglar’s tool."
Prominent individual artists and groups are speaking out as well.
One of the most outspoken critics of Napster is the heavy metal rock group
Metallica, which sued Napster in U.S. District Court in Los Angeles for
copyright infringement and racketeering in April 2000. In a surprising
move, the band delivered to Napster 13 boxes containing 60,000 pages of
documents identifying usernames of people who allegedly made Metallica
songs available online and demanded that Napster "boot" them from the
service. Napster complied , blocking 317,377 user names from its service
in early May of 2000.
In his interview with Slashdot, Metallica drummer Lars Ulrich stated,
"I don't want to sound too combative here, but you know, when somebody
f---s with what we do, we go after them." In his testimony to Congress , Lars commented that "if you're not
fortunate enough to own a computer, there's only one way to assemble a
music collection the equivalent of a Napster user's: theft." Likewise,
Sean "Puffy" Combs, CEO of Bad Boy Entertainment, Inc. was horrified at
the infringement activities he alleges to have discovered transpiring
over the Napster site:
I couldn't believe it when I found out that this Napster was
linking thousands of people to the new Notorious BIG album "Born Again,"
a week before it even hit the streets. This album is a labor of
love from Notorious BIG's friends to the man, his kids, the rest of his
family and everyone else whose lives will never be the same since BIG
passed. BIG and every other artist Napster abuses deserve respect
for what they give us.
However, not all artists are opposed to Napster. Notable supporters
include Rap singer Chuck D and modern rock bands Smashing Pumpkins, Limp
Bizkit, the Rosenbergs, and Ben Folds Five. Billy Joe Armstrong of
Green Day says, "I just want my music to be out, and that's always been
the main priority."
From the beginning, some industry observers suggested that, even if the
RIAA ultimately prevailed in its lawsuit, it would gain little.
Napster lawyer David Boies was quoted in a 60 Minutes II interview as
stating, "This is a case that the record industry can't win. If
they shut down Napster today in the United States, it pops up in a different
country totally outside their control." (Whether Boies was right
will be considered in the next section.)
In April of 2001, the five major recording labels launched two competing
initiatives to tap into the subscription model for downloadable music.
In one corner, RealNetworks became the technology partner for MusicNet (backed by AOL Time Warner, Bertelsmann and EMI
Group). The remaining two labels, Universal Music Group and Sony
Music Entertainment, opted to partner with Yahoo! to launch Duet. Recently
a few more services affiliated to the entertainment companies have appeared,
most notiably pressplay for music and Movielink for movies. The various services
took some time to get off the ground, but seem to have acquired significant
groups of subscribers. Still many consumers have complained about
the limited selections and usage restrictions. The entertainment industry
blames the persisting file-sharing systems for the unenthusiastic response.
How these ventures will ultimately fare in the battle for the loyalty
of online music and other content consumers remains to be seen.
Is Napster passe? Not quite so. First, the legal battles over
it are still ongoing. Bertelsmann, who first sued
Napster for copyright infringement and later invested more than $100M
in attempts to prevent it from going belly up, is now facing a $17B suit from music
publishers for its role in prolonging Napster's life. One record company
has already asked to join this
pursuit of a deeper pocket. Other Napster investors are being
sued for similar reasons. Second, the service's resurrection seems
forthcoming. Roxio, the CD-burning
software manufacturer, which bought Napster's
technological assets from Bertelsmann for $5M in a bankruptcy auction
in November 2002, recruited Napster-mastermind
Sean Fanning in February 2003, and purchased
Pressplay from the music groups of Universal and Sony for $40M in May
2003, announced
plans to launch a legal version of Napster by the end of 2003. Although
only time will tell whether this version of the service ends up being
as successful as the original, Roxio's willingness to pay this hefty sum
for probably not much more than the Napster trademark is a vivid reminder
of the immense success Napster had, the way it revolutionized the world
of online music and the enormous goodwill it still enjoys today, more
than two years past its heyday.
Case Study 2: The Next
Generation
The demise of Napster has contributed to the development and populaization
of second-generation P2P systems. The first and best known of these
is Gnutella, a program developed by Justin Frankel at Nullsoft (AOL's
development house that is credited with creating the MP3 player WinAmp.)
The name, "Gnutella," is partly a tribute to the Free Software Foundation’s
"GNU" project and partly a play on "
Nutella ," Europe's popular chocolate-hazelnut spread. Executives
at AOL shut down the original Gnutella service one day after a limited
beta was released, denouncing it as an "unauthorized freelance project."
(Some observers pointed to AOL's announced merger with Time-Warner as
the driving force behind this decision. CNN describes Time-Warner
as having been "one of the loudest critics of Napster and MP3 piracy as
a whole.") Soon afterwards, however, the project was adopted by
bands of open-source programmers, and a variety of unofficial sites across
the Internet began offering the program for download. (For
more information about Gnutella, please visit the additional resources section .) The
original Gnutella program was far less user-friendly than Napster and
suffered from scalability limitations. Recently,
however, several new services -- BearShare, LimeWire, Gnucleus, and others -- have begun offering
to consumers improved versions of the program, as well as convenient ways
to obtain them.
Other, similar programs included Madster, which "piggybacks" on AOL's popular
instant messenger (estimated to have over 21 million users by Media Metrix
in November 2000), and Audiogalaxy , which offered the highly popular
"Satellite" software. The most sophisticated of the second-generation
P2P systems is FastTrack (now "temporarily
unavailable"), developed by a Dutch company. Fastrack is and
was used by the most rapidly growing new services, Grokster (based in Nevis, West Indies), StreamCast
Networks (formerly known as MusicCity
networks) (offering the widely hailed "Morpheus" software [which in the
meantime switched to using the Gnutella technology]), and KaZaA .
All of these new systems differ from Napster in two respects. First,
they permit exchanges of many types of material other than MP3 files:
photographs, movies, books, etc. Consequently, they can argue more
plausibly than could Napster that their systems are susceptible of significant
noninfringing uses (a fact whose signficance will become apparent soon).
Second, unlike Napster, they have no central servers that keep track of
the files that users are transmitting. Consequently, they can argue
more plausibly than could Napster that they are unaware of and cannot
control infringing activities by their users.
The increase in the usage of these systems has been extraordinary, particularly
in the United States. Peer-to-peer copying of music in Europe remains
significantly less common that it was during the heydey of Napster.
In the U.S., by contrast, the total number of songs copied per month now
exceeds the number copied during February 2001, the time of maximum Napster
traffic.
Fearing erosion of their markets, the record companies have initiated
lawsuits against several of the new companies. The Aimster (Madster) litigation
saw a September 2002 preliminary injunction issued
by the district court based on the causes of contributory and vicarious
copyright infringement. It is now on
appeal before the 7th Circuit, oral argument set
for June 4th, 2003. EFF's amicus
brief is based, inter alia, on the April 2003 MGM v. Grokster ruling
(see below). On May 24th 2002, RIAA Filed a Napster-like lawsuit against
Audigalaxy in a federal court in New York claiming that the two cases
are identical. By mid June a
settlement was reached according to which Audiogalaxy was to pay "a
substantial sum" and block out copyrighted songs from its service.
The outcome was a major abandonment of users and the end of Audiogalaxy
as a file-sharing service. Recently, the RIAA, joined by the Motion Picture
Association of America and several individual movie studios, have brought
suit against the developer and various corporate users of FastTrack, claiming
that, by assisting consumers in copying vast numbers of songs and movies,
the defendants have engaged in both contributory and vicarious copyright
infringement. On Jan 10th 2003 Judge Wilson of the federal District Court
ruled
as part of these proceedings that the lawsuit against Sharman Networks
based in Australia and incorporated in the Pacific island nation of Vanuatu
could proceed since Kazaa software had been downloaded and used by millions
of Californians. Sharman responded with a counterclaim alleging copyright
misuse, monopolisation, and deceptive acts and practices by the entertainment
companies. It will be at least several months before this suit
reaches judgment.
Meanwhile there were interesting development in other countries. Late
in March 2002, in a surprise decision
, the Amsterdam court of appeal in the Netherlands overturned a lower
court ruling that had held file-trading company Kazaa liable for contributory
copyright infringement. The court ruled that Kazaa is not liable
for the illegal actions of people using its software, saying that:
1. "The KaZaA application does not depend on any intervention by KaZaA
bv. The program is expanded and functions even better by means of the
services provided by KaZaA… These services, however, are not necessary
for the locating and exchanging of files. Putting an end to these services
may well result in the fact that unlawful use does not abide, but that
it becomes more difficult to detect and trace."
2."It is not possible to technically detect which files are copyrighted
and which are not. Thus, it is not possible for KaZaA (or any other software)
to incorporate a blockage against the unlawful exchange of files."
3. "Providing the means for publication or reproduction of copyrighted
works is not an act of publication or reproduction in its own right. Also,
it is not true that the KaZaA computer program is exclusively used for
downloading copyrighted works."
This decision was the first anywhere to protect a file-swapping company
against copyright liability and formed an important precedent. But it
was not the last. Its spirit crossed the Atlantic and in April 2003 Judge
Wilson ruled
in MGM v. Grokster that defendants StreamCast and Grokster were not secondarily
liable for copyright infringements by users of their software, marking
the first legitimating act of peer-to-peer technology in the U.S.
The Court noted that since their services were capable of substantial
non-infringing uses, to be liable for contributory copyright infringement
defendants had to have actual knowledge of specific acts of infringement
to which they were materially contributing contemporaneously. In finding
that defendants did not contribute materially to the infringing activity,
the Court relied on the fact that users' file-swapping was managed without
defendants' involvement. Thus, the lack of causality between defendants'
conduct and instances of infringement was central to the Court's reasoning:
even if defendants ceased operation, infringing activities using their
software would still be possible. Although finding that defendants gained
from use of their software for infringing purposes (through advertisement
proceeds), the Court relieved them from vicarious liability since they
did not have the right or ability to supervise users' conduct. In its
conclusion, the Court recognized the possibility that defendants may have
constructed their services deliberately as to gain financially from some
users' unlawful conduct while avoiding secondary liability in copyright,
but implied that such conduct is legal under current law.
The future of P2P technology now seems much more promising than it was
a short time ago. To be sure, the legal battle, in the judiciary
and legislative,
is far from being over. In the meantime, Internet-based P2P traffic continues
to grow in the U.S. and the EU.
Even more worrisome to the record companies is that millions of copies
of the file-sharing programs have already been distributed,
and, as noted by Judge Wilson, are likely to operate even if the services
are shut down. The new
generation of P2P services, offering greater efficiency and higher
transfer rates, exemplified by eDonkey,
eMule and BitTorrent,
is already here and paving the way for easy video file-sharing.What will
the future hold? It is hard to tell at this point. One trend, though,
is already surfacing: the entertainment industry is turning to target
individual infringers rather than focus on commercial technology facilitators
exclusively - a step it was reluctant to take previously. In April 2003,
the RIAA sued for the first
time four college students for operating services that allowed students
to search and share files on-campus. The suits settled quickly with
the students agreeing
to pay the Industry between $12,000 and $17,000 each. Will the RIAA,
in light of Judge Wilson's ruling, go further to sue individual end-users?
And would the legalization of P2P technology eventually make music production
and enjoyment more open, diverse, distributed, rich, creative, or, in
one word - free? We shall have to watch future developments closely to
answer these questions, but we hope that you will share your thoughts
with us using iLaw's
discussion forum.
Back to Top | Intro | Case Studies | Readings | Discussion Topics | Additional Resources
Readings
The statutes and judicial decisions relevant to copyright law on the
Internet are numerous and complex. In this section, we will deal
primarily with the statutory law that is most relevant to the distribution
of online music (and other digital media). This module assumes that
you have some background training in, or at least familiarity with, the
fundamental principles of copyright law. If this is not the case,
we suggest that you first explore some basic copyright
tutorials .
Copyright Act
The Copyright Act of 1976, 17 U.S.C. §§
101 et. seq. , provides copyright protection both to "musical compositions"
and to "sound recordings." Thus, there will generally be two copyrights
associated with any single recorded song that is not yet sufficiently
old to have passed into the public domain. However, even if the
musical composition copyright has fallen into the public domain, a modern
recording of it will still be copyrighted.
Under 17 U.S.C. § 201 , copyright originates
with the author of a work. This author may freely transfer any or
all of the exclusive rights that make up the copyright grant (such as
the right of reproduction and the right of distribution). Authors
of musical compositions and creators of sound recordings often transfer
their exclusive rights to music publishers and record companies.
Composers and publishers are represented by a variety of institutions,
some of which license activities that otherwise would violate the copyright
laws -- such as the broadcast of musical compositions by radio stations.
Other institutions engage in lobbying and anti-piracy efforts on behalf
of the artists and publishers. The Recording
Industry Association of America (RIAA) performs a variety of such
functions on behalf of its membership, which includes the largest record
labels in the world. The RIAA routinely patrols the Internet, searching
for pirated files, and sends cease-and-desist letters to apparent copyright
violators. The RIAA also initiates lawsuits on behalf of its
membership.
One of the earliest and most influential decisions pertaining to the
digital reproduction of copyrighted materials came from the Supreme Court
in a 1984 case challenging the legality of the video cassette recorder
(VCR). In Sony Corp. v. Universal Studios, Inc., 464 U.S. 417 (1984)
, the Supreme Court held that copying a television
program for noncommercial use within the home did not infringe the copyright
in the program. More specifically, the Court determined that the
practice of "time-shifting" -- i.e., recording a television program for
viewing once and only once at a later time -- was permissible under the
fair use doctrine. The Court then ruled that, because one of the
major uses of VCRs is time-shifting, the manufacturers of the machines
were not liable for "contributory copyright infringement," even if the
VCRs were sometimes used for illegal purposes. To escape liability,
the manufacturers needed only to show that their products were "susceptible
of a significant noninfringing use," which they had done.
Audio Home Recording Act of 1992
The current struggle over peer-to-peer copying is not the first copyright
battle that has been waged on the digital music front. In 1986,
digital audio cassettes (DATs) were first introduced, and many believed
that this technology would take the place of the traditional and ubiquitous
analog audio cassette tape. Because the new machines recorded music
in digital form, they created a new threat of large-scale high-quality
piracy. Records and cassette tapes are subject to wear and tear,
and second- or third-generation copies created from one of these analog
devices are often scratchy and of poor quality. Digital audio tapes,
by contrast, allow for "perfect" reproduction, in which each successive
copy is identical to its predecessor. The recording industry, consequently,
lobbied against the introduction of the DAT into the United States.
(Some industry commentators believe that the resultant delay is responsible
for the failure of the technology to gain consumer interest. Others
blame the lack of consumer enthusiasm on relatively high equipment costs
and consumer loyalty to pre-existing audio cassette collections.)
Despite the fact that the threat of mass piracy supposedly posed by DAT
technology never materialized, the recording industry's lobbying efforts
did pay off in the form of a piece of legislation specifically designed
to appease copyright holders' concerns. The Audio Home Recording Act of 1992 (AHRA), 17 U.S.C. §§1001-1010
, mandates the inclusion in DAT machines of copy-control devices that
limit the ability of would-be profiteers to create serial copies of protected
works. Under AHRA §1002(a) , a "digital audio
recording device" must conform to a Serial Copy Management System (SCMS)
designed to prevent multiple copies being created from a single work.
A "digital audio recording device" is defined
as a device capable of rendering a "digital audio copied recording."
To trigger the statute, a copy must be a digital reproduction of a "digital
music recording" and must be produced either directly or from a transmission.
See AHRA §1001 . Finally, under AHRA §1002(c) , it is unlawful to attempt to circumvent
the SCMS. Consumers, however, also benefited from the Act.
AHRA §1008
provides that consumers who make noncommercial copies of musical recordings
utilizing a covered device or medium shall not be made liable under a
copyright infringement theory.
The AHRA has already been interpreted once in the MP3 context -- specifically
in a suit against the manufacturers of a portable MP3 player. In
that case, the RIAA brought suit against Diamond Multimedia, a company
that produces the Rio, an MP3 playback device. The Rio is similar
to a walkman and allows an MP3 user to download sixty minutes worth of
music files from his or her hard drive and listen to the music remotely.
In Recording Industry Association of America v. Diamond Multimedia
Systems, Inc., 180 F.3d 1072, 1074 (9th Cir. 1999) , the Court
of Appeals for the Ninth Circuit found in favor of the defendant, ruling
that the AHRA did not apply to the Rio device, because the computer hard
drive from which the Rio records could not be considered either a digital
audio recording device or a digital music recording within the meaning
of the Act. Moreover, according to the court, because MP3 files
are not coded with generation status or other copyright information, and
because copies cannot be made of the files downloaded to the Rio, the
SCMS would serve no useful function.
SDMI
Despite its victory in court, Diamond Rio and other hardware vendors
recently have been involved in the Secure Digital Music Initiative (SDMI) to introduce copyright
protection mechanisms to their portable MP3 players. The SDMI is
a working group composed of over one hundred
and eighty businesses and organizations that are trying to develop
specifications for the secure distribution of music over the Internet.
The specifications are intended to be cross-platform, so that they will
be compatible with many different hardware and software products.
SDMI has already fallen behind its initial proposed deadlines (it had
hoped to have had its specifications ready for incorporation into merchandise
by Christmas 1999), but it has selected a watermarking scheme and guidelines
for an encryption scheme that is designed to make copyright information
readable from digital music files. This information will be readable
by SDMI-compliant portable devices that eventually will refuse to play
pirated music files encoded with the copyright protection specifications.
We will discuss technological protection mechanisms, including SDMI, in
further detail in a later module. For more information about technical
alternatives in the context of digital music, check out these resources .
Digital Millennium Copyright Act (DMCA)
Where copyright protections are in place, it may be unlawful to design
a product that will circumvent that technology. The DMCA §1201(a) prohibits the manufacture and distribution
of certain devices that circumvent technological protection mechanisms
designed to prevent the unauthorized access of protected materials.
Prohibitions on the unauthorized access itself came into effect on the
second anniversary of the Act. Jonathan Band, a lawyer in Washington
D.C., has written a helpful memo
on the DMCA. If you are interested in further details
about this protection, take a look at the RealNetworks v. Streambox materials -- a case that has recently
been settled.
The DMCA raises additional issues for Online Service Providers (OSPs)
that maintain pirated files on their servers or that link to pirated materials.
Under the DMCA §512(c)(1) (and, indeed, under all but one paragraph
of the section), "the term ‘service provider’ means a provider
of online services or network access, or the operator of facilities therefor."
The DMCA §512(c)(1) exempts an OSP from liability for housing on
its servers copyright infringing material unless the OSP has notice of
infringing material and fails to move expeditiously to remove it.
Thus, unless the OSP knows that a site hosted by one of its servers contains
pirated MP3 files, it is under no obligation to search out such infringing
materials on its servers. The OSP must, however, provide a contact
person to whom copyright holders can express concerns about possible infringing
materials. Once a copyright holder puts the OSP on notice that the
infringing materials are present, the OSP must quickly remove them.
Thus, if a group such as the RIAA gives notice to an online provider that
MP3 files are being transmitted across its systems, it can put pressure
on the system administrator take some kind of action to curtail the alleged
piracy.
Similarly, liability under the DMCA §512(d) is limited where an
online provider is "unwittingly linking or referring users to sites containing
infringing materials." The liability exemption for "unwittingly
linking" is limited to the circumstance where provider is unaware of the
infringement. If a search engine provides an indexed list of links
to counterfeit MP3 files, the RIAA could argue that the fact that so many
MP3 files are pirated gave notice, or at least constructive notice, to
the provider that it was linking to infringing material. Relying
on this provision, the RIAA has already taken issue with at least one
indexed MP3 search engine. According to the RIAA:
We have communicated with Lycos about their new MP3 search engine,
and they have committed to work with us to develop procedures to eliminate
infringing sites from their directory. They also indicated their intent
to fulfill their obligations under the newly enacted Digital Millennium
Copyright Act, which requires them to take appropriate action whenever
they become aware of an infringing musical recording.
The Lycos search engine has since been reduced to little more than a collection
of dead links, a common problem encountered when searching for MP3 files
on the Internet. However, other sites have sprung up offering sleeker
indices and claiming to minimize the number of dead links encountered when
searching for MP3 files.
The most prominent and important aspects of the DMCA, however, involves
not its provisions pertaining to OSPs, but its prohibitions of anti-circumvention
technology. These will be considered in detail in the next module.
Finally, there are three additional U.S. statutory sections of which
you should be aware. Please skim the summaries of the following:
the Digital Performance Right in Sound Recordings Act of 1995
, the No Electronic Theft Act and the Federal Anti-Bootleg Statute .
International Dimensions of the Issue
For an introduction to international copyright law, begin by reviewing
Findlaw's doctrinal summary entitled " International Copyright Protection ." Then, please
review the following articles from the Berne Convention, which provides
copyright law protection to foreign nationals in signatory states:
Berne Article 2 (defining the scope of copyright protection
granted under the treaty)
Berne
Article 9 (right of reproduction)
Berne Article 13 (sound recordings)
Berne Article 14 (cinematographic rights)
For more information on the International Dimensions of online music
distribution, see the additional resources section .
Back to Top | Intro | Case Studies | Readings | Discussion Topics | Additional Resources
Discussion Topics
1. RIAA v. Napster : Suppose that the United States Supreme
Court had decided to review the decision of the Ninth Circuit Court of
Appeals. How do you think the Court would have ruled? How
should it have ruled?
2. Will the second-generation P2P systems suffer the same fate
as Napster? Should they?
3. Many of the more vocal proponents of MP3 argue that
some music pirating is justified, because music companies are already
"ripping consumers off" through enormously high profit margins on CDs
and other non-Internet music sales. In fact, the major labels have
recently settled with the FTC to end policies that are estimated to
have added $500 million to CD prices since 1997. Other observers
disagree, suggesting instead that music companies lose a great deal of
money each year on the unsuccessful CDs they produce, making some subsidy
derived from high profit margins on better selling items necessary to
enable the record label to continue production of more financially risky
projects ("portfolio diversification"). Who do you believe has the
more persuasive argument? Can or should the legitimacy of music
piracy be evaluated by economic observations such as these?
4. For the past few years, many people have been arguing
that the Internet will cause "disintermediation" (cutting out the middleman
in many consumer transactions) and therefore cause consumer prices to
fall. At least one record company executive predicts just the opposite
for the future of online music. According to an interview with Jeremy Silver of EMI, digital music creates
reintermediation, citing such increased cost factors as web hosting, music
directories, streaming technology, security, watermarking, and transaction
companies. Which view do you think is more persuasive? How
do you think the current spate of lawsuits are likely to impact this "supply
chain?"
5. Some observers believe that digital media will resurrect
the idea of micropayments, small charges for online activities or purchases
that accrue over time before payment becomes due. Because individual
record tracks are often too inexpensive to purchase separately, would
micropayments make more sense? Would you support such a system?
Do you believe that the major labels would support such a system and would
their support be necessary?
6. The WIPO Copyright
Treaty of 1996 provides that it shall be illegal to attempt to circumvent
technological protection measures implemented by copyright owners.
With the jurisdictional enforcement problems created by the Internet,
is international copyright law the only remaining method through which
countries can see that copyright laws will be effective?
7. The first-sale doctrine in copyright law provides that
once a copyright holder has sold the tangible embodiment of his work,
he or she ordinarily will not be allowed to control its future disposition.
Some critics of SDMI argue that watermarking and encryption technologies
will in effect allow the copyright holder to prevent any future sales
or transfers of the work and will thereby frustrate the first-sale doctrine.
Should the SDMI be required to insure that the original purchaser of a
digital music file be able to dispose of it as he sees fit, or will the
market force the price of digital music down to compensate for the reduced
value of the file to the purchaser who cannot resell or transfer it in
the future?
8. To what extent should piracy be curbed by law and
to what extent should it be curbed through code (e.g., the implementation
of technological protection schemes)? How useful are the two enforcement
mechanisms likely to be in the context of digital media distribution?
This may become increasingly important as content owners have recently
shifted emphasis from encryption to tracking of file sharing - raising
fundamental questions about privacy and monitoring. (Each of these
issues will be reconsidered later in the month.)
Go
to the Discussion Board
Back to Top | Intro | Case Studies | Readings | Discussion Topics | Additional Resources
Additional Resources
Index:
- Technological Alternatives
- International and Comparative Law
- Personalities
- Related Conferences
Copyright Law
Copyright tutorials
Betsy Rosenblatt, "Copyright Basics", Spring 1998
BitLaw Primer
Cornell
Copyright Primer
Federal
Copyright Office Primer
Timeline:
A History of Copyright in the U.S
UT System Digital Library: Crash Course in Copyright
Copyright link sites
Directory of National Copyright Administrations
Stanford University Copyright & Fair Use site
Articles related to copyright and the Internet
Don Biederman, "Copyright Trends: With Friends Like These...,"
Fall, 1999 : Written by the vice president and general
counsel for Warner/Chappel Music, the article explores a number of
changes in copyright law which occured during the last decade of the
twentieth century
Anne K. Fujita, "The Great Internet Panic: How Digitization is
Deforming Copyright Law," 2 J. TECH. L. & POL'Y 1, 1996
Mark A. Lemley, "Dealing with Overlapping Copyrights on the Internet:"
Article is available for download from the site
Bob Kohn,
"Primer on the Law of Webcasting and Digital Music Delivery," September,
1998:" Article detailing the music licensing process and
the legal complexities introduced by the phenonmenon of webcasting
Brad Templeton,
"10 Big Myths about Copyright Explained:"
Music Licensing Organizations
ASCAP
: American Society of Composers, Authors and Publishers
BMI : Broadcast
Music, Inc.
Harry Fox Agency
SESAC
Statutory Law
The Copyright Act, 17 U.S.C. §§ 101 et. seq.
Audio
Home Recording Act
Full text of the Digital Millennium Copyright Act
Legislative History
of the Digital Millennium Copyright Act: Maintained by
the Home Recording Rights Coalition (HRRC), an advocacy group organized
"to protect the right to use VCRs, audio recorders and computers for
private, non-commercial purposes"
Ronald G. Dunn,
Information Industry Association , H.R. 2281 and H.R. 2180 Hearings
before House Courts and Intellectual Property Subcommittee (Sep.16,
1997)
Mike Kirk, American
Intellectual Property Association , H.R. 2281 and H.R. 2180
Hearings before House Courts and Intellectual Property Subcommittee
(Sep.16, 1997)
Honorable Bruce
Lehman , Assistant Secretary of Commerce and Commissioner of
Patents and Trademarks, H.R. 2281 and H.R. 2180 Hearings before
House Courts and Intellectual Property Subcommittee (Sep.16, 1997)
Roy Neel, United
States Telephone Association , H.R. 2281 and H.R. 2180 Hearings
before House Courts and Intellectual Property Subcommittee (Sep.16,
1997)
Jonathan Band,
"The Digital Millennium Copyright Act:" Memorandum summarizing
key points of the Act
Digital Performance Right in Sound Recordings Act of 1995, 17 U.S.C.
106(6) and 114
No Electronic
Theft Act
Federal Anti-Bootleg
Statute
Miscellaneous
Home Recording
Rights Coalition
Kohn on Music Licensing
Major Cases
Sony
Sony Corp. v. Universal Studios, Inc., 464 U.S. 417
(1984) ( summary | full text )
Rio
Recording Industry Ass'n of America v. Diamond Multimedia
Systems, Inc., 180 F.3d 1072, 1074 (9th Cir. 1999) ( summary | full text )
MP3.com
"MP3.com Files Suit Against RIAA:" From MP3.com; MP3.com
files a responsive suit against the RIAA
"MP3.com Stores Your CDs": Describes the MP3.com services
that are now under attack from the RIAA
Christopher Jones, "RIAA Sues MP3.com": Provides some
legal analysis of MP3.com's potential liability
Courtney Macavinta, "RIAA Sues MP3.com, Alleges Copyright Violations":
Estimates the damages MP3.com may owe should it be found liable
for copyright infringement
Jim Hu, "MP3.com's New Features Get Mixed Reception":
Describes MP3.com personalization services, Beam-It and the Instant
Listening Service
Napster
Napster Lawsuit Q&A: As provided by the RIAA
Declaration of Michael Robertson, CEO and Chairman of MP3.com,
Inc.
Transcript from Napster Hearing on July 26, 2000
Judge Marilyn H. Patel's Opinion on Napster Preliminary Injunction
Janelle Brown, "MP3 Crackdown": Discusses the RIAA's
allegations against Napster as well as RIAA crackdowns on university
piracy
Robert Lemos, "Napster Plays Dodgeball with Music Biz":
Discusses some of the copyright claims that could be brought against
the Napster service
Courtney Macavinta, "Recording Industry Sues Music Start-Up,
Cites Black Market": Explains some of the Napster features and
describes some of the copyright complexities raised by the suit
Chris Oakes, "Time for a Napster Rest?": Describes
Internet traffic bottlenecks on university computer systems attributable
to wide-scale Napster use on campus networks and efforts to block
access to the site by some university administrators
Scott Rosenberg, "The Napster Files" : Provides some
detail on how the Napster service operates
John Borland, "Napster Can Play On, but Threat Looms:"
Napster decision could result in the shut-down of the service, particularly
if it is found liable for major financial damages
Bevin Cummings, "Vox Populi on Napster:" The Industry Standard
scoured Internet message boards for the public's reaction to the federal
court's ruling
Mike Drummond, "Napster, BMG Skinny on Details:" Though
a major announcement, few questions answered after the announced alliance
between Napster and Bertelsmann
Benny Evangelista, "Napster Users Turn Down the Volume:"
Report of 80% drop in number of music files shared on the Napster
service as new filters are blocking an estimated 1.6 billion song
files
Brad King, "Music Sites Like Napster Pay Plan:" Companies
such as Emusic and Listen.com are encouraged by the idea of a subscription
based model for Napster because it allows them to charge for their
own services
Brad King, "Study: Napster Use Isn't Stealing:" A recent
study indicates that both Internet and non-Internet users felt downloading
music was not stealing
Hane Lee, "Napster Won't Remain the Same:" A subscription based
model for Napster may not work because users expect the service to
be free but viable alternatives may not exist
Andrew Morse, "Napster Adds Some Political Muscle:" Napster
has hired Manus Cooney, a senior aide for Senator Orrin Hatch (R-Utah)
to advise on policy matters
Andrew Morse, "Sleeping With the Enemy:" Commentary on alliance
between Napster and Bertelsmann
Andrew Morse, "Where's Napster's Pay Service? Don't Ask:"
Recent activity suggests that Napster and Bertelsmann are not well
coordinated in their efforts to roll out the promised subscription
based model for the service
Roger Parloff, "Court's Rebuke of Napster Gives Superlawyer Boies
Surprising Wiggle Room:" Article suggests that the decision
from the Appeals Court avoided the important issue enforcement
Sue Zeidler,
"Napster CEO Says Millions Still on Service:" Napster CEO
reports that the service still has 8 million users each day
Gnutella
Janelle Brown, "The Gnutella Paradox:" Introduction
to the Gnutella technology and the potential legal difficulties of
shutting down the service
Michael Delio, "Gnutella Development Gnotted:" Conflict
between programmers that have been supporting Gnutella could threaten
the technology
Technological Alternatives
John Borland, "New Technology Could Help Squelch Digital Music
Piracy:" Manufacturers attempting to create safeguards
for data storage that prevent the copying of copyrighted materials
onto their hard drives
Melanie Austria Farmer, "Report: Music Pirates Will Evade Countermeasures:"
Predicts that many technical solutions to thwart illegal copying
will be ineffective
Gwendolyn Mariano, "Attacking Piracy at the Source: CDs:"
The music industry is seeking protection against online piracy
on a variety of fronts
International and Comparative Law
Treaties/International Agreements
Berne Convention (links to full text)
Berne
Article 2 (defining the scope of copyright protection granted
under the treaty)
Berne
Article 9 (right of reproduction)
Berne Article 13 (sound recordings)
Berne Article 14
(cinematographic rights)
Universal Copyright Convention, Paris, 1971
WIPO Copyright Treaty of 1996 ( full text )
WIPO Performances and Phonograms Treaty of 1996
World Trade
Agreement 1994 (establishing the WTO and including GATT 1994)
Articles
Robin D. Gross,
"Swedish Court Exonerates Teen of Internet Music Piracy":
Prosecutorial charges brought against a teenager who was linking to
pirated music files from his website were dismissed after a Swedish
court found that the teen did not "copy, distribute or spread the
pirated music files" and, thus, was not guilty of music piracy
Christopher Jones, "Swedish Retailer Pushes MP3" :
Swedish company claims to be the first in Europe to offer secure digital
music distribution
Patrizia Piccolo, "Music Copyright": Canadian perspective of
music and copyright from a student-at-law
Statutes
Australian Copyright Act of 1968
Informational Sites
Articles, Analysis and Letters from the Dec. 1996 WIPO Diplomatic
Conference in Geneva
World Intellectual
Property Organization
International Copyright: From Bitlaw
International Copyright Protection: From Findlaw.
International Trade Instruments, Treaties, Conventions, Model
Laws, Rules
International Copyright Infringements In Cyberspace: A Conflict-of-laws
Analysis
EU
Amended proposal for Directive on copyright and related rights
Franklin Pierce Intellectual Property Mall : International
intellectual property links
Personalities
Shawn Fanning, Founder of Napster
Business Week e.biz 25 : Fanning chosen by Business
Week as one of the top influential people in eBusiness for 2000
Chris Connelly, "Shawn Fanning Speaks:" Interview
with Fanning conducted by MTV
Nathaniel Fredman, "Napster Founder Shawn Fanning:"
Interview with Fanning conducted by U-Wire
Lynda Gorov, "Hi, I'm Napster:" Profile of Fanning
by the Boston Globe
Giancarlo Varanini, "Q&A with Napster creator Shawn Fanning:"
Interview with Fanning conducted by ZDNet
David Boies, Napster Lawyer
Boies, Schiller & Flexner: Law firm co-founded
by Boies in 1997 that has handled a variety of high-profile cases
Oral Arguments Before the U.S. Court of Appeals for the Ninth
Circuit: MP3 files of key sections of the Napster Oral
Arguments presented by Boies on October 2, 2000
Susan
Garland, The Microsoft Trial: The Best Legal Show in Town:"
Discussion of Boies as one of the two key litigators in the Microsoft
case
John Heilemann, "David Boies: The Wired Interview:"
Interview with Boies conducted by Wired
Hilary Rosen, RIAA president
John Borland, "RIAA chief determined to keep copyright controls:"
Interview with Rosen conducted by CNET
Janelle Brown, "On the Record:" Interview with Rosen
conducted by Salon
Jason McCabe Calacanis, "RIAA CEO Hilary Rosen on the Music Industry's
Reaction to Digital Technology:" Part II of Interview with
Rosen conducted by Silicon Alley Reporter in conjunction with Digital
Coast 2000 Conference
Brad King, "A Chat With Hilary Rosen:" Interview with
Rosen conducted by Wired
Brad King, "RIAA Chief: Piracy Is Doomed:" Interview
with Rosen conducted by Wired available in MP3 format
Julene Snyder, "Jam Session With Music Exec Hilary Rosen:"
Interview with Rosen conducted by The Industry Standard
Michael Robertson, CEO and Founder of MP3
Tom and
David Gardner, "Fool Interview with Michael Robertson, CEO of MP3.com:"
Interview with Robertson conducted by The Motley Fool
Brad King, "He Wants His My.mp3.com:" Interview
with Robertson conducted by Getsigned.com
Beth Lipton, "View From the Eye of the Net Music Storm:"
Interview with Robertson conducted by CNET
Gerri Miller, "A Conversation With MP3.com's Michael Robertson:"
Interview with Robertson conducted by Wired
\Related Conferences
Signal or Noise? A conference co-sponsored by
the Berkman Center and the Electronic Frontier Foundation
that explored the legal and social implications of online music distribution.
The conference was held on February 25, 2000. The proceedings
may be found in a RealVideo archive. For more information on the legal
and social implications MP3 technology, read the briefing book prepared in connection with the conference.
In addition, Harvard's policies regarding Napster and other P2P technologies
are discussed in a November 15, 2000 roundtable discussion .
The Future of Music Policy Summit : held January, 2002
in Washington, D.C. to capture the views of music, business, and technology
All Shook Up - The Music Industry Confronts the Internet and Consolidation:
Conference sponsored by the The Harvard Journal of Law & Technology
on April 21, 2001. Keynote speaker was Nicholas Butterworth, President and CEO of MTVi .
|