Napster Says Its Song-Sharing Service Is as Legal as a VCR
Napster Inc., whose song-swapping software is reshaping the music industry, insists that pulling music off the Net for personal use and not paying for it is legal.
That position was detailed in a rebuttal filed Monday in U.S. District Court in San Francisco to a recording industry lawsuit. Napster asserts that what its members do--sharing with each other their own copies of copyrighted materials--is as legal as people using a VCR to watch a borrowed movie.
The recording industry suit has charged the company with creating an illegal online marketplace for bootlegged music.
Napster’s defense, outlined for the first time, is an aggressive gamble and a strong shift in legal strategy. The man behind this change is Napster’s lead attorney David Boies, most recently known for his success as the government’s chief litigator in its antitrust suit against Microsoft Corp.
Boies dismissed the Recording Industry Assn. of America suit as a misuse of copyright law and a misunderstanding of how Napster can boost rather than diminish record sales. “It’s the kind of new technology that can threaten the economic control of a dominant trade association based on the existing technology, and the RIAA is trying very fast to catch up and shut down Napster until they can dominate,” Boies said at a news conference Monday.
Legal experts are calling the Napster case one of the first great battles over intellectual property rights in the Digital Age, and are closely watching the case.
The suit, which is not expected to go to trial until later in the year, is set to have its first preliminary hearing July 26.
Recently, the RIAA filed a motion for a preliminary injunction against Napster, seeking to remove all the songs owned by the trade group’s members from Napster’s song directories.
If the injunction is granted, Napster as a company would essentially be shut down, as the bulk of the material currently downloaded by Napster users is by mainstream artists.
But technology experts insist that, even if Napster loses in court, fans of its service will continue to happily swap pirated songs, thanks to a bounty of Napster-inspired copycats that flourish on the Web.
More than 10 million people have downloaded Napster’s free proprietary software, which allows users to scour each others’ computers in search of digital music. Napster’s technology acts as a means for users to find each other and exchange music, but does not actually store copies of the audio files on its own corporate computer system.
Initially, Napster sought protection in the Digital Millennium Copyright Act, which blocks some Internet service providers from liability for the illegal acts of their subscribers.
But U.S. District Judge Marilyn Hall Patel ruled in May that Napster did not meet certain criteria of being an ISP, and therefore didn’t qualify to such legal safe-harbor.
Instead, the highly anticipated case will hinge on whether Napster users themselves are violating copyright law by using the company’s software, Boies said.
“If they are not [breaking the law], then we are not,” Boies said. “A person who shares [music] with a friend is protected” by federal law.
But not everyone agrees with that logic--especially not the record labels. Claiming that Napster is making it easy to steal tunes, the RIAA and the National Music Publishers Assn. filed suit against the company late last year in U.S. District Court in San Francisco.
In court documents, the recording industry quotes e-mail and other internal memorandums in which Napster executives--specifically co-founders Shawn Fanning, 19, and Sean Parker, 20--allegedly talked about copyright infringement being key to Napster’s model from the moment the company drafted its first business plan.
A to-do list, according to the filing, allegedly included such corporate goals as bringing about the death of the CD and forcing record stores such as Tower Records out of business.
Boies dismissed such exchanges as “colorful . . . but irrelevant” because what Napster’s users are doing isn’t illegal.
Instead, Boies said, they are merely participating on a large scale in a way that is widely accepted on a smaller scale today.
Like photocopy machines and VCRs, Napster’s software program--unto itself--is a legal product that most people will use for legitimate purposes, company officials said.
“What people are using Napster for is no different” than swapping homemade audio tapes or letting a friend borrow a copy of a VHS movie, Boies said. “It’s noncommercial use by a consumer.”
Napster’s defense draws heavily on the 1984 Supreme Court case between Sony Corp., which made one of the first popular VCRs, and Universal Studios Inc.
Known as the Betamax case, the movie industry fought to block VCR technology, arguing that individual consumers who used the devices to tape movies from broadcast or cable channels were guilty of copyright infringement. And like the current Napster case, the entertainment studios claimed that consumer electronics companies who manufactured the VCRs were guilty of contributory infringement.
The Supreme Court shocked Hollywood when it ruled that Sony was not guilty of contributory infringement. The decision was tied to several key conditions, the most important being that a product with “significant non-infringing uses” was considered to be OK.
The VCR, for example, could be used to make massive amounts of bootlegged copies of movies, which could then be sold. But most consumers bought a VCR in order to play films they rented or bought at a legitimate store, or to make and playback home movies.
Napster officials insist that most people use the service to “sample” music--or listen to a track--and then go buy the tunes they like. Boies cited a recent survey of Napster users, which found that 70% have purchased records after hearing the songs via Napster.
The service also carries tracks by 17,000 unsigned bands who are using the service as a promotional tool, said Napster interim Chief Executive Hank Barry.
But the question remains whether Napster users primarily use the software for getting a taste of new tunes, or for making perfect copies and eliminating the need to buy music on CDs.
Critics insist that Napster’s survey findings do not reflect true sales figures. In court documents, the RIAA cited a study by the Field Research Corp. of 2,555 college students who are Internet users that showed a correlation between Napster use and decreased CD sales. “[Nearly half] of Napster users . . . described the nature of its impact on their music purchases in a way which either explicitly indicated or suggested that Napster displaces CD sales,” the study said.
