Volume 9 Issue 1 Article 4 2002 Napster: The Case for the Need for a Missing Direct Infringer Llewellyn Joseph Gibbons Follow this and additional works at: https://digitalcommons.law.villanova.edu/mslj Part of the Entertainment, Arts, and Sports Law Commons, and the Intellectual Property Law Commons Recommended Citation Llewellyn J. Gibbons, Napster: The Case for the Need for a Missing Direct Infringer, 9 Jeffrey S. Moorad Sports L.J. 57 (2002). Available at: https://digitalcommons.law.villanova.edu/mslj/vol9/iss1/4 This Symposia is brought to you for free and open access by Villanova University Charles Widger School of Law Digital Repository. It has been accepted for inclusion in Jeffrey S. Moorad Sports Law Journal by an authorized editor of Villanova University Charles Widger School of Law Digital Repository. Gibbons: Napster: The Case for the Need for a Missing Direct Infringer NAPSTER: THE CASE FOR THE NEED FOR A MISSING DIRECT INFRINGER LLEWELLYN JOSEPH GIBBONS* I. INTRODUCTION I would like to thank the editors of the Villanova Sports & En- tertainmentLaw Journalfor inviting me to participate with this distin- guished panel of academic and industry experts. The topic of the symposium, "Napster: Innocent Innovation or Egregious Infringe- ment?," is timely and the underlying issue, the use of copyright law to regulate technology, will remain relevant for the foreseeable fu- ture. In the long run, however, to paraphrase the immortal words of Abraham Lincoln, the world will little note, nor long remember A & M Records, Inc. v. Napster, Inc.' and the controversy surround- ing this case. 2 Instead, this case resulted in merely the striking down of one variant of a peer-to-peer file sharing technology and future lawyers and legal commentators will consider the decision an anomaly. Conversely, had the courts held in favor of Napster, it would have been a watershed moment in copyright jurisprudence, on par with Sony Corp. of America v. Universal City Studios, Inc. 3 As in Sony, Napster could have marked the birth of a new industry. * Assistant Professor, College of Law, University of Toledo. Professor Gib- bons would also like to thank Ann Bartow, Thomas G. Field, Jr., Theresa McMa- hon, William Richman, Lars Smith, Daniel Steinbock, John Kheit, Joseph Slater and Chopin Yen for their comments. Professor Gibbons would like to thank the College of Law for a faculty research grant. 1. 14 F. Supp. 2d 896 (N.D. Cal. 2000) ("Napster I"), affd in part, rev'd in part, 239 F.3d 1004 (9th Cir. 2001) ("Napster II") (concerning boundary between shar- ing and theft, personal use and unauthorized worldwide distribution of copy- righted music and sound recordings). A & M Records and seventeen other record companies filed a complaint for contributory and vicarious copyright infringe- ment, violations of section 980(a) (2) of the California Civil Code, and unfair com- petition against Napster, Inc., an Internet start-up that enables users to download MP3 music files without payment. See id. 2. See Abraham Lincoln, The Gettysburg Address, Delivered at Gettysburg on Novem- ber 19, 1863, available at http://www.loc.gov./exhibits/gadd/gadrft.html (last vis- ited Nov. 18, 2001). 3. 464 U.S. 417 (1984) (ruling on legality of Video Cassette Recorders). In Sony, Universal Studios, Inc. and Walt Disney Productions brought a copyright in- fringement suit against Sony and several of its retailers for manufacturing and sell- ing Betamax video tape recorders (VTR). See id. Universal and Disney claimed that because the Betamax VTR was capable of recording off the air television broadcasts, Sony was liable as a contributory infringer. See id. The United States Supreme Court adopted the "staple article of commerce" doctrine from patent law and held in favor of Sony. Id. at 417-18. (57) Published by Villanova University Charles Widger School of Law Digital Repository, 2002 1 Jeffrey S. Moorad Sports Law Journal, Vol. 9, Iss. 1 [2002], Art. 4 58 VILLANOVA SPORTS & ENT. LAW JOURNAL [Vol. 9: p. 57 Each new technology displaces or causes changes in dominant economic and legal models governing its predecessor. 4 New tech- nology, unless co-opted by existing economic interests, always re- sults in a call for regulation or prohibition.5 This strident call is often based on Chicken Little's claim that, "the sky is falling," and further fortified with predictions of dire economic effects. 6 "Exam- ples of such historically threatening technology include piano rolls, phonographs, motion pictures, cable television, photocopiers, vide- ocassette recorders ("VCRs") and Digital Audio Tapes ("DATs") ."7 Amazingly, when courts ignore these predictions, the sky never falls. Instead, some businesses quickly adapt to the new technology, develop new business models and become even more prosperous.8 [I]t is interesting to note that the Supreme Court found against copyright owners in Sony despite claims that doing so would seriously undermine the movie industry. For ex- ample, Jack Valenti, President of the Motion Picture Asso- ciation of America, has been quoted as saying that the 4. See Damien A. Reihl, Peer-to-PeerDistribution Systems: Will Napster, Gnutella, and Freenet Create a Copyright Nirvana or Gehenna?, 27 WM. MITCHELL L. REv. 1761, 1762 (2001). See generally Sarah H. McWane, Comment, Hollywood v. Silicon Val- ley: DeCSS Down, Napster To Go?, 9 COMMLAW CONSPECTUS 87 (2001). 5. See Reihl, supra note 4 at 1762. 6. See James M. Burger, "Rock 'n Roll Is Here to Stay:" Napster and Online Music Distribution, 19 COMM. LAW. 1, 32 (2001) (noting new technologies open up new markets and applications for existing works and such technologies may lead to use of such works in ways that were not contemplated, let alone legally authorized, by works' owners). "[B]oth the law and the marketplace historically have adapted to new technologies while still allowing content owners to prosper." Id. 7. Reihl, supra note 4, at 1762-63 (citing White-Smith Music Publ'g Co. v. Apollo Co., 209 U.S. 1, 18 (1908)) (holding creation of piano rolls using copy- righted music not infringing act); see also Sony, 464 U.S. at 417; Williams & Wilkins Co. v. United States, 487 F.2d 1345, 1362, affid 420 U.S. 376 (1975) (holding medi- cal journal publisher's photocopying is considered "fair use" because it is non- profit institution devoted to advancement of medical knowledge); Fortnightly Corp. v. United Artists Television, Inc., 392 U.S. 390, 399 (1968) (holding cable television company that relayed copyrighted material did not "perform" work and did not infringe upon Copyright Act of 1909); Kalem Co. v. Harper Bros., 222 U.S. 55, 63 (1911) (holding "the film BEN HUR was photographic interpretation of copyrighted story, the public exhibition of which constituted infringement"); Edison v. Lubin, 122 F. 240, 242 (3d Cir. 1903) (holding motion pictures are simi- lar to photographs, and therefore copyrightable); Stern v. Rosey, 17 App. D.C. 562, 565 (1901) (holding "phonograph reproduction did not violate copyright act, since act is not 'publishing' or 'copying' within meaning of statute"); NATIONAL RESEARCH COUNCIL, THE DIGITAL DILEMMA - INTELLECTUAL PROPERTY IN THE DIGI- TAL AGE, ch. 2, at http://books.nap.edu/html/digital-dilemma/ch2.html (lending libraries viewed as threatening bookstores and publishers). 8. See, e.g., Sony, 464 U.S. at 417 (ruling on legality of VCRs). Videocassette sales and rentals are a ten billion dollar a year market with a total of $250 billion invested in VCRs and VHS programming. See Joe Ryan, Blank Video Tape Market Trends, PRC NEws, Jan. 11, 1999, at 5. https://digitalcommons.law.villanova.edu/mslj/vol9/iss1/4 2 Gibbons: Napster: The Case for the Need for a Missing Direct Infringer 2002] NAPSTER AND THE NEED FOR A DIRECT INFRINGER 59 video cassette recorder "is to the American film producer and the American public as the Boston Strangler is to the woman alone." Perhaps telling for the dispute over Nap- ster, those claims of doom have proven unsubstantiated. 9 This adaptive process promotes legitimate aims of copyright policy in the United States.' 0 Innovative technologies such as Napster re- sult in authors creating more works. These new works, along with prior works, are distributed more broadly at a lower cost so that the public has greater access to the intellectual heritage of the human race. This process of course requires new business models and re- wards courageous innovators at the possible expense of entrenched interests. Egregious infringers merely free ride on the works of others without even the possibility of a substantial non-infringing use and without adding value or creating new markets." 1 9. Alfred C. Yen, A PreliminaryEconomic Analysis of Napster: Internet Technology, Copyright Liability, and the Possibility Of Coasean Bargaining,26 U. DAYrON L. REv. 247, 252 n.20 (2001) (citing Adam Liptak and Diane Lahneer Zimmerman). 10. See, e.g., Fogerty v. Fantasy, Inc., 510 U.S. 517, 526-27 (1994) (explaining goals and effects of copyright law). While it is true that one of the goals of the Copyright Act is to discourage infringement, it is by no means the only goal of that Act .... The imme- diate effect of our copyright law is to secure a fair return for an 'author's' creative labor. But the ultimate aim is, by this incentive, to stimulate artis- tic creativity. Id. (quoting Twentieth Century Music Corp. v. Aiken, 422 U.S. 151, 156 (1975); see also Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539, 546 (1985) (holding "[tihe rights conferred by copyright are designed to assure contributors to the store of knowledge a fair return for their labors"); American Geophysical Union v. Texaco Inc., 60 F.3d 913, 941 (2d Cir.