It Ain't Over Till It's Over - Company Business and Marketing

Industry Standard, The, August 7, 2000 by Hane C. Lee

If you think Judge Patel's ruling is the last word on the digital copyright issue, think again.

DISTRICT COURT JUDGE MARILYN Hall Patel's ruling on Napster last week provided a swift win for the music industry in its battle against online piracy. But the fight over the application of existing copyright law to online media has just begun.

David Boies, Napster's lead attorney, will obviously use every available channel to appeal the ruling. And lawsuits by the Recording Industry Association of America are still pending against Scour.net, a multimedia file exchange site, and MP3Board.com, an MP3 search engine. Moreover, legal experts remain deeply divided about how the issue will be resolved -- although most agree that litigation won't solve the problem.

Even Napster's staunchest opponents concede the debate is far from over. "I have yet to read or listen to a coherent defense of Napster," says Walter McDonough, an intellectual-property lawyer and a director of the Future of Music Coalition, an organization that brings together artists and technologists. "But [the injunction] is not necessarily a victory for the RIAA because they haven't developed their own [digital distribution] strategy."

Napster's defense turns on the Audio Home Recording Act of 1992, which Diamond Multimedia invoked last year in its successful defense against an RIAA suit over Diamond's portable MP3 player. The act immunizes consumers from copyright infringement when they make recordings for noncommercial purposes. The Diamond case extends that protection to digital recordings, and Napster argues the law applies to copying and downloading MP3s to a hard drive.

"Napster took an extreme position: that the sharing between consumers of millions of copyrighted music files was not copyright infringement," says Ira Rothken, lead counsel for MP3Board in its legal fight with the RIAA.

MP3Board contends it fits the definition of a search engine under the Digital Millennium Copyright Act, a 1998 law that extends copyright protections from the offline world to the Internet. Safe-harbor provisions exempt certain types of Internet activity -- in particular, ISPs and search engines -- from liability for copyright infringement. MP3Board says its site merely allows people to find MP3 files elsewhere on the Web, noting that it has implemented an automated system that lets copyright owners easily deactivate infringing links at the click of a mouse.

"We're not a specialized software program created for the sole purpose of transferring or copying copyrighted files," says Rothken. "We have a much more sound balance between Internet technology and reasonable protections" for copyright owners than Napster does.

Though Scour's alleged violations more closely resemble those of Napster's, it's unlikely Scour will rely on a fair-use defense. Scour maintains it is protected by the DMCA, and that its software has substantial noninfringing uses -- arguments that were rejected in Napster's case.

Unlike Napster, though, Scour had been working to strike deals for "noninfringing uses" before it was sued. For example, it recently launched a promotion with Dimension Films to offer a downloadable trailer for Scary Movie.

The hardest legal question for the RIAA is how to deal with decentralized, noncommercial file-sharing systems like Gnutella or FreeNet, where there is no easily identifiable entity to target. "If there is an 'undernet' of piracy, that's something our industry has always had to live with," says Gary Sherman, RIAA senior executive VP and general counsel. "That will be another challenge we will face."

Others contend decentralized file-sharing systems could force a change in copyright law. "Systems like Gnutella scream for adjusting the copyright act," says attorney Len Rubin of Gordon & Glickson in Chicago. "The most obvious amendment I can think of would be simply prohibiting the use of a system that can allow for wholesale reproduction of copyrighted works for free without the copyright owners' consent."

Eric Bergner, an intellectual-property and new-media attorney at Moses & Singer in New York, disagrees. "They don't need an amendment; they have the law on their side," he says. "It's a question of how to enforce the law." Bergner doesn't rule out the possibility of going after individual users to send a message.

"It's like speeding," notes Bergner. "Chances are you're not going to get busted, but you know there might be a cop around the corner."

E-mail: hanel@thestandard.com Dan Goodin contributed to this story.

Napster's Cousin: The DeCSS Trial

Napster's courtroom battle might have been the week's big drama, but it wasn't the only digital-media melee to go down. On Tuesday in a federal courtroom in New York, the defense rested in the suit brought by eight major movie studios against hacker/journalist Eric Corley. The studios are trying to block DeCSS, a DVD decryption program; Corley published a link to the offending code on his Web site, 2600.com. Appeals are inevitable, no matter which way Judge Lewis A. Kaplan decides, but here's a picture of the arguments, the possible outcomes and their implications.