Napster Savages RIAA, Sony

Communications Today, July 6, 2000

Napster on Monday filed its rebuttal against the Recording Industry Association of America's effort to get the U.S. District Court for the Northern District of California to shut down the upstart online music-trading service.

Napster's argument is a doozy, although it's based on a couple of assumptions the court may not buy. Attorney David Boies (the Justice Department's lead attorney in its antitrust case against Microsoft [MSFT]) argues that, noncommercial recording, which is protected by the Audio Home Recording Act of 1992 and court cases over the Betamax video recorder and Diamond's RIO MP3 player, is personal even if it's done simultaneously by thousands of Internet users.

For that argument to stick, Napster must convince the court that the trading is also noncommercial - that it's being done by Napster users, rather than Napster, which is a commercial venture. That issue is what makes Napster vulnerable where Gnutella, a file-sharing program with no commercial core, is not.

But Napster's brief also points out that trading copies of songs on tape, which users have always done, has never been prosecuted as a violation of copyright.

"The use of the Napster service to sample a song is analogous to visiting a listening station or borrowing a CD from a friend, in order to decide whether to make a purchase," Napster said in a Friday release. That seems like a big claim because music trading on Napster is a large-scale affair. But Congress and the courts have held the right of personal copying to be technology neutral, Boies argued.

The big surprise in Napster's rebuttal, however, was its attack on the recording industry. Boies accused Sony [SNE] of accepting MP3 trading when it can make money off it.

"While Sony Music now claims that Napster is harming its bottom line, Sony Electronics is seeking to profit from the vast number of MP3s currently available on the Internet," Napster argued. "Indeed, Sony's advertising encourages its customers to 'Log-on and download ATRAC3, MP3 or WAV files from your favorite music Web sites.'"

The obvious weak spot in the Napster brief comes on page 18: "Napster has no specific knowledge that any particular use of a file through its system is unauthorized." In other words, Napster, like Internet-service providers, can't monitor specific files.

The problem with that argument is that the RIAA has claimed examples of specific copyright-violation knowledge by Napster execs. Much of the case could hinge on how important the court considers the issue of such knowledge.

Paul Coe Clark III