The Ups and Downs of the Revolution

Mia Garlick provides a thoughtful analysts of the Napster revolution.

usic has long been associated copyright infringement (the band owns Napster enables a user to designate a with revolutions but the all of its masters and songs), unlawful use folder in the harddrive of their own revolution which we are of a digital audio interface device and computer which is shared with the rest Mcurrently experiencing is about musicracketeering. 3 of the world. The user then stores their itself. It is a revolution about how we MP3 files in that folder and when they enjoy music and how people make money Another band, the Tabloids, is critical of next log onto the , the list of files out of creating and selling music. At the Napster because of the practical effect it stored in that folder is sent to Napster’s heart of this latest revolution is the search says that Napster has on signed artists. central servers. Other Napster users can and swap software called Napster, The band claims that Napster only sends then search the directory at the Napster although the revolution has not been artists deeper into debt with their record site to locate the MP3 files they want and caused by Napster per se but the attitude labels by cutting into record sales. The go to the user’s computer which has the which the Internet, and Napster, Tabloids response has been to encourage desired file and download it. epitomise. people to create Trojan horse files and swap them through Napster, to frustrate Since Napster, several other programs This article explores the Napster the search and swap system.4 have been written which further improve phenomenon to date. It briefly discusses on the speed and reliability of locating the evolution of the Napster phenomenon However, not all artists see Napster as the and swapping MP3 files on the Internet. and then reviews the Record Industry harbinger of doom. At the same time as Association of America’s recent Metallica was inflaming its fans, Limp One of these programs is which preliminary injunction and the Bizkit spoke out in support of Napster was posted to the back pages of AOL’s subsequent appeal which stayed the saying that Napster was an amazing way website while merger discussions were injunction. to market and promote music to a massive underway between AOL and Time audience.3 Rap artist Chuck D has also Warner, one of the “Big 5” record STUDENTS AND ARTISTS spoken out in support of Napster.6 companies. Gnutella was posted on an REVOLT AOL subsidiary’s pages for only 24 hours. NAPSTER’S BEGINNINGS It was quickly removed when AOL As with many revolutions, university became aware of it amid mutterings that students have been heavily involved with The Napster phenomenon is about a it was an “unauthorised freelance the Napster revolution. In fact, university technology that has evolved gradually and project”. However, during Gnutella’s students have been so involved with continues to evolve to improve the ability limited online life, hundreds of free- Napster that many universities and of Internet users to locate and download software fans had downloaded the colleges around the US blocked their music online. software and it is now circulating widely.9 students’ access to Napster in February Due to its open source nature, this year.1 Arguably, one of the first steps towards programmers are able to continually improving the ability of Internet users to improve Gnutella. Students and Napster fans have also been search for and locate music online was taking political action in defence of taken by the search engine Lycos. Lycos The AOL subsidiary which developed Napster. In response to the university developed an “MP3 Search” function as Gnutella, , was founded in 1997 bans, the Students Against University part of its website, which assisted music by Justin Frankel who, shortly after he Censorship (“SAUC”) group formed to fans to locate MP3 files on the Internet.7 dropped out of the , collect signatures for a petition against developed , a very popular tire bans.3 Several other protest sites have However, the MP3 searches which were program which allowed users to play appeared more recently including anti- available via search engines such as Lycos music in the MP3 format. Nullsoft, was fan.com, which calls for boycotts against were unreliable and incredibly slow. The acquired by AOL 2 years later for artists who have spoken out against ability of “MP3 Search” to locate music approximately $80 million in stock. Napster. files was limited to those files of which it became aware, either by registration or As Napster was developed to improve on Also, when the US Senate recently began webcrawling. Lycos-style searches, Nullsoft developed its hearings into music and copyright Gnutella to resolve some of the bandwidth laws, hundreds of students bombarded the As a direct result of the frustration issues experienced in relation to Senators who were participating in the experienced with Web-based search Napster.10 Unlike Napster, Gnutella does hearings with emails in support of engines such as .lycos.com, Shawn not require users to connect to each other Napster. Fanning, who had recently dropped out through a central computer. Gnutella of university and had never written a enables a peer-to-peer network to develop, Artists have also been lining up in support computer program before, bought a basically linking users’ computers and of and against Napster. Metallica manual about programming and wrote his making the searching and swapping of announced in April this year it was first Windows program. That program music files quicker and easier. bringing an action against Napster for was called Napster.8

Communications Law Bulletin, Vol 19 No 3 2000 Page 13 Napster has to date been more popular a person can, for example, copy or “THE DOWN” - THE than Gnutella precisely because it docs broadcast or transmit their recordings NAPSTER INJUNCTION have a central server. Gnutella servers over the Internet. Publisher and change and migrate several times a day. songwriter organisations can do the same On 26 July 2000, the same Judge Patel This means that a person wanting to use in relation to the songs which make up who had heard Napster’s motion for Gnutella must know the numeric IP such recordings. This means that if, for summary judgement, heard oral address of a Gnutella server in order to example, someone copies or transmit a arguments in relation to the record be able to use the application. sound recording over the Internet without companies' application for a preliminary the permission of the rightsholder, that injunction. In practical terms, the record Already, new and varied software person is infringing copyright. companies were seeking an order against programs are being developed which aim Napster to stop music files being swapped to improve on both Napster and Gnutella, However, it is also an infringement of via the Napster service, until its action such as the services MojoNation, copyright to “authorise” someone else to against Napster had been fully heard.14 Scour.net (which is currently being sued infringe copyright. In other words, if you by the Motion Picture Association of direct someone to infringe copyright or Somewhat dramatically, the attorney for Amercia in an action similar to the action if you let them do it or provide them with the record companies, Russell Frackman, against Napster) and Free.net. the facilities on which to infringe, and opened his arguments with the claim that do not take reasonable steps to prevent within the few minutes it took people to The most recent application which them from infringing copyright, you will find their seats in the courtroom that improves on Gnutella is Aimster. also be guilty of infringement. morning, 30,000 songs, the majority of Aimster combines AOL’s instant Essentially, this is record companies' which were protected by copyright, were messaging (“IM”) software with complaint against Napster. dow nloaded using the Napster service.15 Gnutella. This new application is like a Frackman emphasised the historical “skin” for an AOL IM user which reads In July this year, Napster sought to importance of the injunction, saying; tire Internet addresses of “buddies” as they dismiss the case against them on the come online. Buddies can then share grounds that they were similar to an ISP “this is just the beginning and your their music files amongst each other. and therefore came within the special honour has the ability to nip this in AOL has not yet commented on exception provisions, also know n as "safe the bud"16 ' Aimster.” harbours", of the Digital Millennium Copyright Act 1999 (“DMCA”)12. The Essentially, the record companies' case Amidst the variety of file swapping DMCA was enacted in the US to provide was that its members would suffer systems, Napster’s centralised server is specifically for copyright laws as they irreparable harm if Napster was allowed its main point of difference and also the apply to the Internet. Part of the DMCA to continue until llic‘'conclusion of the reason for the current action against it. provides that ‘mere conduits’ such as trial. The record companies claimed that ISPs, are not liable if copyright infringing 87% of all files swapped via Napster were BACKGROUND TO THE material is on their networks or passes unauthorised copies. In conjunction with NAPSTER INJUNCTION through their networks. To come within this statistic, the record companies this exception, an organisation must estimated that Napster would have 75 The major US record companies, satisfy the definition of a ‘service million users by the end of the year. including Universal, Sony, Warners, and provider’ under the DMCA as well as BMC commenced an action against other conditions, such as removing any To be successful in the injunction, the Napster in December 1999 alleging material if and when the service provider record companies needed to show that contributory and vicarious copyright becomes aware that such material they' wuuld suffer irreparable harm, which infringement. US record companies' own infringes copyright. could not be remedied by monetary the rights to many of the sound compensation, if Napster was not recordings which appear on CDs and Judge Patel of the US District Court, stopped. The record companies also had which are being swapped and Northern District, dismissed Napster’s to show* that it was reasonably likely to downloaded on Napster, motion on the grounds that Napster did win at trial. not satisfy the elements of the definition The rights in the underlying songs are of‘sendee provider’ and also, because she Judge Patel found that the record owned, generally, by music publisher and considered that the record companies companies were not only reasonably songwriter representative organisations. raised genuine issues that Napster did not likely to be successful at trial but had a These organisations, such as Frank Music comply with the other requirements for a strong chance of success. She granted Corporation, have also brought an action service provider to be exempt from the injunction and gave Napster until against Napster for contributory and infringements, namely that Napster did midnight two days later to remove all vicarious copyright infringement. Their not have a policy of terminating repeat copyright material from its service. action has been joined with the record copyright infringers. companies' action because the same In response to Napster’s protests that the issues arise in both cases. It is against this background that the effect of such a ruling was to cause record companies sought a preliminary Napster to shut down its service, Patel Essentially, the basis for these actions injunction to shut Napster down on the commented that “You have other against Napster is that Napster is grounds that, before a full trial of the substantial, non-infringing uses that you authorising copyright infringements. As issues was concluded, Napster would tried to convince me of and further, that the owners of the rights in the sound have 75 million users, “a user base which “ That‘s the system you created Napster recordings, the record companies' would irreparably harm the industry and wrote the original software. It's up to members control whether and how much drive down CD sales" ,n Napster to write software which will

Pag* 14 Communications Law Bulletin, Vol 19 No 3 2000 remove the copyright material. They've created the monster."17

As well as making the ruling against $ Gwt we a where, -ft*. Napster, Patel ordered that the record companies pay $5 million dollars to protect Napster against any damage it Vi£Ocl\ess chtos ro^rw ancHhev* may suffer in the event that the record companies were not successful at trial. bar M wa copf (# f*j£- Napster’s arguments seem to have held little sway for Judge Patel. In particular, early internal documents of the company supported Patel’s view that Napster not only knew about the infringements which were occurring via their service but actually encouraged and participated in them.

A key piece of evidence for Patel in reaching her decision was an internal memo written by Fanning which stated that Napster users had to remain anonymous because they were engaged in copying files illegally. Also, the fact that some Napster executives were former music industry executives, who, thejudge found, were aware of copyright laws and knew what their users were doing but nevertheless downloaded copyright songs from the Napster service themselves and did not act to prevent Napster users doing the same.

Patel dismissed each of Napster’s not do substantial harm to Universal’s out of business. She considered that these defences and found that Napster interests. two arguments were inconsistent. employees and executives knew that direct infringement was occurring on David Boies, Napster’s attorney, argued Napster’s other defence, that it was their service. This made Napster liable that Napster was similar to the VCR entitled to a fair use defence was similarly for authorising the infringements because because it could be used for non­ given short shrill. Under US copyright the company failed to take reasonable infringing purposes. Boies cited as law, a person is not liable for infringing steps, or indeed any steps, to stop the examples the ability' of users to “space copyright where it can show that its use infringements its users were committing. shift" their collections from CDs to their was fair. Fair use of copyright work is Patel also found that Napster was likely computers, to sample a CD before buying use which is for a “fair use” purpose, such to be guilty of vicarious infringement to it or to find out about and search for new as criticism, comment, reporting the the extent that it had the ability to artists on Napster’s New Artist Program. news, study and research. As well as j supervise the actions of its users. being for a fair use purpose, the extent of Patel rejected this argument. She found the use must also be fair. This is Napster raised a number of arguments in that Napster differed from to a VCR determined according to a non-exhaustive defence. The first was the decision in because it connected to a vast number of list of factors having regard to the what is popularly known as the Betaines people over the Internet. It did not circumstances. Section 107 of the US case. In Sony Corporation of America v facilitate better personal use of Copyright Act sets out these factors. They Universal City Studios, Inc!S, w hich was copyrighted material but promoted a use are: decided on US legal principles, the US which went beyond any concepts of Supreme Court held that Sony’s Betamex noncommercial or personal use. • the purpose and character of the use, VCRs were not illegal for two reasons including whether the use is of a In commenting on the New Artist despite the fact that users were able to commercial nature; Program, Patel said that the program was use VCRs to make copies of copyright not part of Napster’s main strategy’ but protected films. The reasons for the • the nature of the copyrighted work; something which was developed “late in decision were that VCRs were capable of the game” after the litigation had • the amount and substantiality of the j substantially non-infringing uses and commenced. portion of work used in proportion to j because part of the purpose of using VCRs the w hole of the work; and I to copy films was ‘time shifting’, that is, Also, Patel posed the question that if making copies to enjoy the programs at a Napster is capable of substantial non­ later date. Time shifting was considered infringing use, Napster should not be by the court to be a “fair use” which did arguing that the injunction would put it

Communications Law Bulletin, Vot 19 No 3 2000 Page 15 The Napster case is about establishing die • the effect of the use on the potential “raised substantial questions of first principles to guide businesses about wha market for or the value of the impression going to both the merits they can and can’t do with copyright and the form of the injunction." 2 copyrighted work. protected material. The record companies are seeking to assert that U is illegal to Rather than allow a formal challenge to conduct a business based on a It is clear from the wording of section the injunclion, the Court of Appeals interference with property rights, it is J07, even without considering the eases expediled the hearing. Napster has filed not and can not be about Napster users in which these fair use factors have been its opening brief wilh the court on 18 applied, that it would be difficult for or the way in which people enjoy MP3 or August, the US record companies on 8 Napster to show that the file swapping music in the future. which users engaged in via its service September. satisfied all the conditions. The Napster case will not be effective to It is peculiar if the Court of Appeals change the nature of the use of music granted the stay on the basis of Napster s Patel said that Napster was not entitled online This is evidenced by the fact that, evidence that it would have to close its to a fair use defence because the free within hours of the injunction being business. In a recent decision, eBay, Inc music which was available through granted, the number of unique users ol v Bidder sEdge, Inc.23, the court refused Napster would lead to reduced CD sales. Napster increased by 71%. It is also to allow Bidder’s Edge to crawl and take evidenced by the fact that the main Users downloaded songs from Napster information from eBay’s site on the rather than going out and purchasing it. webpage for Gnutella was forced to shut grounds of trespass saying that down temporarily within hours of the Finally, Napster claimed that it was injunction because of increased file "In the copyright infringement excused from copyright infringement trading, although it was back online later context, once a plaintiff has under the US Audio Home Recording Act with increased capacity. New and ] 99220 The Audio Home Recording Act established a strong likelihood of improved Tile sharing applications arc was enacted to prevent unauthorised success of the merits, any harm to the being developed each week. serial copying of recordings. However, defendants that results from being under the legislation, an infringement preliminarily enjoined from Indeed, the US record industry admitted action cannot be brought for continuing to infringe is legally that its high profile attempts to stop irrelevant...... a defendant who noncommercial digital or analog copying online music piracy were only of sound recordings. However, Patel builds a business model based on a exacerbating the problem. Reports have quickly rejected this claim on the basis clear violation of the property rights commented on users engaging in a of the definitions of “audio recording of the plaintiff cannot defeat a “downloading binge" in the wake of the devices” in section 1001 of the US preliminary injunction by claimjng injunction. Hilary Rosen, the head of the Copyright Act. Patel said that the Audio the business will be harmed if the R1AA noted that, since the injunction Home Recording Act did not apply to defendant is forced to respect those computers and harddrives, such as property rights".21 “the illegal downloading of copyright Napster. It applied to audio recording More likely is the fact that the Court of music openly encouraged by Napster has probably exceeded all records.' devices, which Napster was not. Appeals considered that the Napster case raises serious and novel questions of law, There is certainly a real danger that if ~ “THE UP” - INJUNCTION in particular in relation to copyright, ______STAYED______and when Napster is shut down, digital which need to be given a full hearing. music pirates will be forced to the Indeed, several trade groups such as the Although the news of the Napster “undcrnci”. shutdown spread like wildfire across the Consumer Electronics Association and globe and, particularly, among online the Digital Media Association have taken Upon hearing of the injunclion, Napster music fans everywhere, the shutdown the opportunity to file submissions with users posted messages to the service the Court on points of the law being lamenting the expected loss of Napster never took place. considered in this case.25 but also encouraging Napster users to The day following the grant of the move to other file-sharing applications. injunction, on 27 July 2000, Napster s For example1®, “Estecaz” wrote “This is attorneys were in the US Circuit Court of WHAT DOES IT ALL MEAN? a sad dav for our community" but then "I encourage all of you who love this Appeals asking that the order be stayed The most telling comment about the case program as I, don I buy label music, and fin other words, postponed) until a formal against Napster was made by the Record challenge to the ruling could take place. go to Gnutellar. “Tcilo” wrote: Industry Association of America ("RIAA") Senior Executive Vice In seeking the stay of the injunction, President, Cary Sherman when he said “Everyone is focusing on Napster. Napster claimed that it would be forced tVhv bother? Napster can be shut to close its services within 48 hours and that: down because it is a company and lay off 40 employees within days in order requires dedicated sewers. Gnutella "This once again establishes that the to comply with the injunction. In is open source and does not require rules of the road are the same online addition, Napster claimed that it would any servers, it cannot be stopped suffer irreparable harm to its business as they are offline and sends a strong without placing individual writs on reputation and customer goodwill. message to other that they cannot, the entire Internet community around build a business based on others copyright works without permission . the world"29 The Court of Appeals granted the stay giving a short decision without reasons. (emphasis added)24 These statements and the proliferation of The decision states that Napster file-sharing applications, indicates that

Communications Law Bulletin, Vol 19 No 3 2000 Page 16 the heart of this revolution is not Napster Another benefit of Napster is that it has Instant Messaging Hybrid, Webnoize, 10 August itself but rather the attitude of music’s brought "old economy" companies 2000, - biggest consumers, the under 18 year kicking and screaming into the "new 12 5 May 2000, US District Court, N.D. Cai Nd. C 99-05183. olds, who are highly technologically economy". Some record companies have literate and have little respect for been slow to embrace digital technologies 13 Cave & Quistgaard, Court to Napster You're Going Down, 27 July 2000. proprietary rights. and incorporate them into their products and businesses. 14 The actual decision of Judge Patel in granting the preliminary injunction against Napster has not The growth of the Internet has seen the yet been published. The following discussion is rise of a hacker mentality and an In 1998, before Napster had been based on a variety of news reports of Judge entitlement philosophy. The majority of developed, the RIAA’s members were Patel's statements during the hearing and when Internet users expect information, and only talking about the security of their giving her decision, such as Judge Rules Against particularly music, to be free. They also Monster Napster to Appeal, Webnoize 27 July product. With the advent of Napster in 2000; King, B Napster's Pie-Trading No More, feel entitled to access such information mid-1999, the RIAA’s members could not Wired News 27 July 2000; Federal Appeals Court or music, regardless of any technological postpone making their catalogues Grants Stay of Napster Injunction. Service W& protection measures. This is partly available in a digital format any longer. Continue, Webnoize 28 July 2000; Cave & reflected in the share and swap practices Since Napster’s meteoric rise in fame, Quistgaard, Court to Napster: You're Going Down, Salon.com Technology 27 July 2000. made possible by Napster and the three of the majors have made albums and popularity of MP3. This altitudinal 15 Cave 8 Quistgaard, Court to Napster You 're singles available for download and going down, Salon.com Technology 27 July 2000. change makes the outcome of the Napster numerous other online music initiatives 16 Ibid. decision fairly irrelevant on a practical have been developed, such as 17 Ibid. level, even though Napster epitomises this Garageband.com. change. 18 US Supreme Court, 1983/1984, 21PPR225. On a more humorous note, perhaps the 19 Although there are studies which contradict Napster also epitomises the Internet this finding, see for example Bailey, M Digital real cause for concern in the Napster Delivery: An Eight Fold Path to Digital business model. It has been very revolution is the fact that the prime Enlightenment, Webnoize Research Report, 15 successful in attracting a huge user base, movers of the revolution have had August 2000; King, B Despite Piracy, CD Sales 22 million users, and is widely known. sufficient time to create such a Up Wired News, 24 April 2000. However, the company has not yet earned commotion. It is university drop outs or, 20 It should be noted that the Audio Home any revenue from its service. in the case of Aimster, college trained Recording Act does not have an Australian counterpart. friends, who have given birth to the There is some positive fallout from the applications which have realised file 21 Barnes, C, Napster Seeks Injunction Appeal CNet News.com 27 July 2000. Napster case. Through cases such as the search and swap services. It is university Napster case, copyright laws and their 22 28 July 2000, US State Court of Appeals, 9th students on campus, with the benefit of Circuit, No, 00-16401, No, 00-16403. effect on the Internet and new forms of state of the art connections and high 23 US District Court, N.D. Cal. No C99 technology are clarified. This promotes bandwidth, who have been prime 21200RMW). greater stability for business. There are consumers of search and swap services. 24 at p15. several lawsuits in the US, in addition to Maybe the real issue here is to make 25 King, B Napster's New Friends, Wired News the Napster case, which are currently tertiary studies more interesting with the 25 August 2000. being brought in relation to the DMCA aim of minimising the time which 26 Opsit, at 14. which will give guidance to lawyers and students have to participate in the 27 Foremski, T Napster Dispute Increases businesses about the permitted uses of revolution. Piracy, FT.com 30 July 2000. . copyright protected material in the brave 28 Philipkoski, K Napster Still an Open Issue Wole: This article is current to 9 September 2000, new world of the Internet. Wired News 27 July 2000. 1 Oakes, C, Time for Napster to take a rest, Wired News 10 February 2000. 29 Ibid. . John Potter, director of the Digital Media 2 Kelsey, D, Universities ban Napster 30 King, B Tuning Up Digital Copyright Laws Association when commenting on the Downloads, Bizreport.com, 25 February 2000. Wired News 16 May 2000. current dispute between the record 3 Metallica Takes on Napster, The Standard companies and webcasters, noted that: Media Grok, 14 April 2000. Mia Garlick is a lawyer at the Sydney 4 King, B, Napster Fight Goes to the People law firm Gilbert & Tobin. “ With copyright legislation, there are Wired News 29 July 2000. very strong political interests and the 5 Reuters, Biz kit Bonds with Napster, Wired only way to get things through News, 25 April 2000. Congress is to lea\>e the statutes grey 6 Showbiz reacts to Napster Ruling, Salon.com At the time the DMCA was going Technology 28 July 2000. ' through Congress, the National 7 Similar to the Recording Industry Association of America’s action against Napster, the Association of Broadcasters and the Norwegian company which provides the Recording Industry Association of technology which enables the search, is being America agreed to support the sued by the International Federation of legislation with the understanding Phonographic Industry of Nonway for infringement that there would be some kind of legal of copyright in the music which is made available on the Lycos site. confrontation between the two sides 8 Brown, J MP3 Free-for-all, Salon.com once the law went into effect,"™ Technology, 3 February 2000. With cases like the record industry v 9 Brown, J Did AOL eat Gnutella for lunch7,15 March 2000. Napster, the laws in the US are clarified, 10 Ibid. which may offer guidance in other 11 Breitling, J Start-Up Debuts File Swap, AOL jurisdictions such as Australia.

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