Anti-Napster Ruling Draws Mixed Reaction

Napster Cries Fair Use

The Napster service lets users search for MP3 music files on the computers of other users online and download the tracks they want directly from those users, bypassing any central servers, a technique called peer-to-peer computing. The lack of central servers in the system is at the heart of Napster's defense. Because no copyrighted material resides on company servers--which only house directories of files, not the files themselves--Napster argued it was not liable for any infringement being committed.

It can't be held liable, the company further argued, because in trading files its users are simply exercising their right to fair use. Fair use is a consumer right that allows private, noncommercial trading of copyrighted materials among friends and family.

CEA supports Napster's fair use arguments.

"[CEA] can make an argument that those uses--general file sharing--falls into fair use," CEA's Joseph says.

"We recognize that there is a legitimate business here, and legitimate property should be protected," Joseph says. "But rights that existed in the analog age [such as copying cassette tapes] should transfer to the digital age. As a general principle we think that's a good starting point."

Napster further argued that the RIAA's own figures show that music sales increased in 2000 and that Napster, therefore, is not causing harm but rather is spurring sales.

Judge Marilyn H. Patel disagreed and issued an injunction against the company in late July, ordering that the service be shut down immediately, pending resolution of the trial. That injunction was stayed the next day, however, by a U.S. Appeals Court. Monday's decision is the result of oral arguments made before the Ninth Circuit in October.

Internet industry organization NetCoalition.com, whose members include America Online and Yahoo, applaud the part of the decision requiring the lower court to review the applicability of the Digital Millennium Copyright Act to this case.

Dismissing the DMCA from this case could mean Internet service providers would be liable for illegal sharing of copyrighted material by their users.

Picking Sides

One of the more telling stories of division in the Napster case is reaction among recording artists.

Manager Terry McBride, who represents Barenaked Ladies, Dido, and Sarah McLachlan, says he is pleased with the court's ruling.

"I'm thankful copyrights are going to be protected," McBride says. Recognizing that even if Napster is eventually forced to shut down or becomes something less, the ability to protect copyrights is still daunting. "The subscription model is inevitable; the question is what it is going to look like. Now I hope we can move forward and try to find a way to make it work for the artists."

Others think Napster has contributed to their success and the spirit of music.

"Napster can't be shut down," says Paul D. Miller, aka DJ Spooky, a pro-Napster musician. "The Napster-ization of music is an inevitable scenario. If it's not Napster, it will be any one of the ten different music-swapping programs." Rather than trying to curb music-swapping online, he promotes the creation of new licensing schemes. Miller is one of several pro-Napster musicians, along with Limp Bizkit and Ben Folds Five.

Survival of the Fittest

Besides BMG, music companies such as TVT Records and Edel Music AG have also signed agreements with Napster. None of the four remaining major labels, widely seen as being integral to the success of such a service, have yet made any moves toward signing such deals.

And other file-sharing services have faced a similar challenge. After closing down its file-sharing services due to copyright infringement issues, Scour plans to relaunch in March. This time it will incorporate digital rights management technologies.

CenterSpan Communications, which purchased Scour in December, feels today's ruling is "the first step in the legal process--a very strong first step that upholds the rights of copyright holders," says Keith Halasy, Centerspan corporate marketing director.

Halasy says he thinks that adding copyright protection technology will put the new Scour service in a better position to compete with Napster.

Napster, which has an estimated 60 million users, was founded by Northeastern University dropout Shawn Fanning in 1999.