The NAPSTER Case
In December 1999 the Recording Industry Association of America RIAA on behalf of every major record label in the music industry initiated legal actions against Napster for the following copyright infringements on the plaintiffs exclusive rights for reproduction and distribution of their copyright works:
1. Napster users were directly infringing the plaintiff’s copyright.
2. Napster was liable for contributory infringement of the plaintiff’s copyright.
3. Napster was liable for vicarious infringement of the plaintiff’s copyright.
Legal Arguments used in the Napster case
Napster did not dispute the allegations of direct infringement by its users. Therefore the court held that at least some of Napsters’ users were direct infringers through their activities of reproducing and distributing copyright music without permission.
Contributory infringement of copyright requires that the defendant has knowledge or reasonably should have had knowledge of the direct infringement undertaken by the exterior party and must have materially contributed to the direct infringement. The court had already determined that Napsters users directly infringed the plaintiff’s copyright. Napster’s knowledge of these infringing activities was proven by a list of 12,000 files that had been subject to copyright violations via Napster, the down loading activities of company executives and the appearance of well-known song titles in promotion screens. Finally, material contribution was demonstrated via Napster’s provision of the site and facilities used in directly infringing activities. The court consequently held that Napster was liable for contributory infringement of the plaintiff’s copyright.
Vicarious liability arises when financial benefit is gained via the failure to control or supervise a direct infringement of copyright where there is the ability to do so. The court held that Napster was liable for vicarious infringement as it retained the right to block a user from accessing the network. The retainment of this right amounted to the ability of Napster to control infringing activities. However, Napster failed to wield this right for this purpose. Napster was found to rely on the infringing activities of its users as a major attraction for the use of the system. Considering that the systems financial viability related directly to the size of its user base the court found that Napster obtained direct financial benefit from the infringement of users.
Defenses used by Napster
Napster unsuccessfully argued four defenses to the allegations made against them. Firstly Napster argued that their right to free speech allowed the legal continuance of their system. The courts determined that free speech is inapplicable to the illegal down loading of files in the absence of a redeeming purpose. Secondly, Napster argued that the placement of any injunction against the company would result in significant financial hardship. However the court held that the hardship borne by Napster did not ‘trump’ the interest of the copyright holder. Thirdly, Napster relied on a legal principle (the Betamax Defenses) that states that creators of new technology should not bear the burden of preventing copyright infringement where technology is capable of substantial non-infringing use. The courts determined that despite Napster non-infringing uses, this principle did not apply as Napster possessed actual knowledge of specific infringements and maintained the ability to control them without doing so. Finally Napster attempted to rely on section 512(a) Digital Millennium Copyright Act (DMCA)This piece of American legislation allows an Internet service provider to provide connections for material that is temporarily stored on its service with impunity under certain conditions. However, Napster failed to prove to the court that it fell under the classification of a service provider under the Act.
The Decision
The District Court ordered Napster to monitor the activities of its network and to block access to infringing material when notified of the materials location. Napster was unable to do this and consequently shut down its service in July 2001. Due to the outcome of the case Napster eventually declared bankruptcy in 2002 and sold it’s assets despite having already been offline since the previous year. The Napster trademark was sold to Roxio and a new subscription service using the name was launched in October 2003.
Conclusion
NAPSTER is a popular internet site in 1999 that allow s computer users to share high-quality digital (MP3) music recordings. This site serves as the clearinghouse of the 15 million (in less than a year) members logged on to download music for free and share to others. The users can download the digital music recordings even from the computer‘s hard drive of other users. Because of its high demand in student populace, some universities blocked NAPSTER in order to regain their bandwidth.
After a year of its launching in 1999, the NAPSTER was sued by the Recording Industry Association of America (RIAA) by violating the copyright laws. This violation occurs because NAPSTER allows its members to swap recordings for free. Another separate lawsuit was filed against NAPSTER by the Metallica band and rap star Dr. Dre for direct infringement and racketeering. Metallica’s drummer accused NAPSTER of stealing.
RIAA’s request of restricting the users of NAPSTER was officially granted and the NAPSTER was ordered to shut down their service by pulling the plug on its most popular feature on July 26, 2000. However, just two days after the order, in July 28, 2000, the 9th Circuit Court of Appeals reprieves NAPSTER for the last minute to try the case in court.
In its battle with the RIAA in the court, Napster turned to three past rulings on copyright infringement to support its defense: Sony Betamax, the 1992 Audio Home Recording Act, and the 1998 Digital Millennium Copyright Act.
Despite its claims, NAPSTER was held guilty for direct infringement of the RIAA’s music in January 12, 2001. The District Court of Appeals refuted all of Napster’s defense tactics and ordered the company to stop allowing its millions of users to download and share copyrighted material without properly compensating the owners of the material. The court determined the Audio Home Recording Act was irrelevant because it did not address the downloading of MP3 files or digital audio recording devices. The court also rejected Napster’s reliance on the Digital Millennium Copyright Act, stating simply that it does not include contributory infringers.
After the rulings, the executives of NAPSTERS releases statements that they are still committed to finding solutions to the controversy and acknowledges their negotiations with Bertelsmann AG, NAPSTER’s strategic partner. The NAPSTER has its goal of prohibiting pirated music transfers and counting the number of song downloads in order to properly reimburse their artists; for their plans of improvements and expansion.
The NAPSTER still failed on their negotiation with the RIAA regarding their lawsuit against NAPSTER. Though, their service was not forced to totally shut down because doing so could violate the rights of those artists who gave permission to the NAPSTER to trade their songs. But the company was required to block all songs on a list of 5,000 provided by the RIAA.
In late September 2001 Napster agreed to pay $26 million for distribution of unauthorized music in the past and made a proposal that could let songwriters and musicians distribute their music on Napster for a fee. This agreement could cover as many as 700,000 songs but Napster still needs an agreement before the company can legally distribute it. However, with failed attempts to reach a suitable compromise with the recording industry and litigation expenses mounting, the company filed for Chapter 11 reorganization in June 2002 as a last grasp effort to try and reach a deal with Bertelsmann AG, Napster's strategic partner.
The final nail in the coffin for Napster came on September 3, 2002, when a Delaware
Shortly after the judge's ruling, Napster lay off nearly its entire 42-person staff and proceeded to convert its Chapter 11 reorganization into Chapter 7 liquidation, closing its doors forever.
My Personal Point of View
The NAPSTER may have a point in their effort of contributing a new experience for their members by bringing new technology in the modernizing world; but, there are so many things that they are supposed to consider. A free download and sharing of music recordings in the internet is of great advantage for the users, in which the main point of the existence of NAPSTER aside from income generation.
The NAPSTER may have reached their goals but; was ruined because of the following violations that are supposedly be prevented ahead and not resulted to its destructions; First, .NAPSTER users were directly infringing the plaintiff’s copyright, the Recording Industry Association of America (RIAA). Secondly, NAPSTER was liable for contributory infringement of the plaintiff’s copyright. And, NAPSTER was liable for vicarious infringement of the plaintiff’s copyright.
For me, NAPSTER has made a mistake that has a corresponding penalty especially that there are laws being violated. With the evidences and justification against them presented, I strongly believe that the NAPSTER has made their mistakes and the decision of the court against the NAPSTER is acceptable. And what they did to the Recording Industry Association of America (RIAA) together with other group/s or individual singer is unethical.
References
Douglas, G.(2004)"Copyright and Peer-to-Peer Music File Sharing: The Napster Case and the Argument Against Legislative Reform" in Murodch University
Frith, S., and Marshall, L.(eds)(2004)Music and Copyright. Edinburgh : Edinburgh
Heim-Smith, M.(2004)"Peer-to-Peer File Sharing Since Napster". Georgia State University College of Law: Law and the Internet accessed 3 October 2004. URL:1
http://www.e-businessethics.com/napster.htm
WILONA V. ISRAEL
BS in Information Technology
