Vanderbilt Journal of Entertainment & Technology Law Volume 4 Issue 1 Issue 1 - 2002 Article 6 2002 The Peer-to-Peer Revolution: A Post-Napster Analysis of the Rapidly Developing File Sharing Technology Joseph A. Sifferd Follow this and additional works at: https://scholarship.law.vanderbilt.edu/jetlaw Part of the Intellectual Property Law Commons, and the Internet Law Commons Recommended Citation Joseph A. Sifferd, The Peer-to-Peer Revolution: A Post-Napster Analysis of the Rapidly Developing File Sharing Technology, 4 Vanderbilt Journal of Entertainment and Technology Law 92 (2020) Available at: https://scholarship.law.vanderbilt.edu/jetlaw/vol4/iss1/6 This Note is brought to you for free and open access by Scholarship@Vanderbilt Law. It has been accepted for inclusion in Vanderbilt Journal of Entertainment & Technology Law by an authorized editor of Scholarship@Vanderbilt Law. For more information, please contact [email protected]. A -Music Introduction an Internet chat-room friend, founded Napster, Inc., In its dispute with peer-to-peer file sharing develop- a peer-to-peer file sharing business that enabled its ers such as Napster, the music industry is using the users to trade and share music files for free over the 4 legal system, most notably existing copyright law, to Internet. -_:- maintain its chokehold on music distribution. His- Napster provided its members with free MusicShare tory has shown that the entertainment industry will software,5 allowing them to connect to Napster s serv- oppose any technology that has the potential to upset ers. Once connected, MusicShare scanned the MP3 its monopoly over artists and consumers. Throughout files available on the hard drive of any user connected the development of copyright law in the United States, to the Napster site, adding those file names or song Congress has made an effort to balance legitimate titles (not the actual files themselves) to the directory of technological advances and the rights of individual available songs on Napster s server index. Napster also copyright holders, as required by the Constitution.' allowed its users to play the music they downloaded Likewise, the courts, in interpreting these statutes, and provided a chat room for members to interact.6 have tried to separate justifiable versus unjustifiable MusicShare was an integral part of the protocol for uses of creative works. Napster file-sharing, and its user-friendly simplicity This Note will focus on A&M Records, Inc. v. Napster, was largely responsible for Napster s global popular Inc. 2 and will include an analysis of copyright law ty First, a user sent a particular song request to applicable to the legality of the incipient peer-to- the Napster server. The server then combed the peer file-sharing technology. The first Section will hard drive of other users who were online to locate provide a brief factual his- that selection. If the server tory and introduction to found a match, Napster the Napster legal discussion. E users instantly then linked the searching The second Section of this INTERF 4 Efell in love with computer with the com- Note will include a survey puter holding the file.7 The of relevant copyright doc Napster The number ofNapster users soared to over 20 million file was then downloaded trines, followed by a discus- in just over a year afterNapster's inception and peaked at around directly from the host's sion of the Ninth Circuit's 90 million prior to its shut down on July I, 2001. personal computer ("PC") analysis of these doctrines to the requesting user's as applied to the facts pre PC.8 Once music files were sented in Napster Finally, I will address the future of downloaded, users had the freedom to use the songs the peer-to-peer phenomenon, including a review and as they pleased, which included using other computer -analysis of different types of peer-to-peer networks capabilities unrelated to the Napster software to transfer that are experiencing continued use and development. songs from their hard drive onto compact discs ("CDs"), Some Napster offspring are constructed in a way that a process known as "burning." Napster never actually makes them seemingly immune to copyright liability touched the copyrighted materials. 9 However, it did Thus, using post-Napster copyright law I will address post the names of the songs and users screen names whether the judicial system will be able to control on its indices. online music piracy, or whether Congress will be forced Internet users instantly fell in love with Napster. to address the issue with additional legislation. Ulti- The number of Napster users soared to over 20 mil- mately, the evolution of peer-to-peer networks may lion in just over a year after Napster s inception and spark a congressional response that will reshape copy- peaked at around 90'million prior to its shut down right law to more effectively deal with Internet-related on July 1, 2001.'° Napster operated as-a-non-profit technological advances.3 company receiving $15 million in investment funds from the Silicon Valley venture capitalist firm Hummer Napster" Facts and Procedural History Winbald." Most of the money was used for legal fees In 1999, an eighteen year-old college dropout, Shawn and employee salaries. Napster continued to operate as Fanning, developed an idea that sent the music industry a non-profit company throughout its court battles. into a frenzy That year, Fanning and Sean Parker, The Recordink Industry Association of America JOSEPH A. SIFFERD ("RIAA") and eighteen affiliates of the top five record and provide defenses for alleged infringers. In order labels filed suit against Napster on December 6, 1999 to explore the legalities of peer-to-peer file-sharing in the U.S. District Court for the Northern District of networks, it is important to have a basic understand- California. 2 This initial suit was followed by a flurry of ing of copyright law. This Section thus provides a lawsuits by artists seeking to protect their copyrighted brief explanation of the relevant portions of copyright works, including suits brought by heavy metal rock law. This discussion is also crucial to understanding group Metallica and rapper Dr. Dre.13 Anticipating the Ninth Circuit's analysis, which will be discussed Napster's early demise, users flooded the Internet. At immediately following this Section. I will begin with a one point, the Napster.com web site averaged 945,000 review of the theories relied on by the music industry 4 visitors per day. in bringing its suit: contributory and vicarious liability. Napster hired the law firm Fenwick & West and also The analysis will then turn to an expansive body of law recruited prominent attorney David Boies to handle oral from which Napster marshalled its defenses. These arguments before the district court and Ninth Circuit defenses include: the "fair use" defense under the 1976 Court of Appeals.' 5 On July 12, 2000, plaintiffs moved Copyright Act, the "substantial non-infringing use" 6 jointly for a preliminary injunction against Napster1 doctrine established by the Supreme Court in Sony v. Boies lost his first battle with the RIAA on July 26, Universal, "noncommercial" recording associated with 2000 when U.S. District Judge Marilyn Patel granted the Audio Home Recording Act ("AHRA"), "safe har- the music industry's motion for a preliminary injunc- bors" available under the Digital Millennium Copy- tion that would have forced Napster to shut down its right Act ("DMCA") for immunity to Internet-related services based on findings of contributory and vicari- infringement. Finally, a discussion of the No Electronic ous infringement of plaintiffs' copyrighted works. 7 Theft Act ("NETA"), which creates liability for non- However, on July 27, 2000, Napster filed an emergency commercial infringement on the Internet that might motion to stay the injunction, which was granted otherwise go unpunished, will follow. the following day. 8 After hearing oral arguments on October 2, 2000, the Ninth Circuit remanded the case Contributory and Vicarious Infringement and allowed Napster to continue servicing its users To be held liable for contributory infringement, the pending the outcome of the trial. 9 plaintiff must show that the defendant had actual or In February of 2001, the Ninth Circuit determined constructive knowledge of its users infringing activi- that Napster, as it was currently organized, violated ties, and that defendant substantially participated in existing copyright law, but forced the district court to the infringement by inducing, causing, or materially narrow the scope of its injunction. Napster voluntarily contributing to its occurrence.22 To be vicariously shut down its system on July 1, 2001, just four months liable, the plaintiff must demonstrate that defendant 2 after the Ninth Circuit opinion was released. ' Either actually supervised or exercised control over the direct Napster was unable to meet the Ninth Circuit's restric- infringement and that the defendant had a direct finan- tions, or it made a business judgment to restructure cial interest in the infringing activity.23 No actual its system so as to produce a service that would be knowledge of the infringing activity is required for appealing to the music industry for purposes of creating vicarious liability, and no financial motive is needed an Internet music distribution partnership. The latter to establish contributory liability. reason is more likely, as Napster seems to be making In order to prove either contributory or vicarious progress in settlement negotiations with the various copyright infringement, the music industry must show sectors of the music industry. Even after its file-sharing that Napster users were engaged in direct infringement. service was terminated, Napster continues to be one of Direct infringement simply means that one of the 2 the most visited entertainment websites on the Internet.