The Napster’s case study

Napster’s copyright infringement is an interesting case study. The technological possibilities that it provided is the biggest revolution in the music industry. Instead of going to the shops to buy a record, users could download any MP3 file that anybody from another end of the world had acquired and stored on their computer. Its peer-to-peer file exchange concept was brilliant except for issues of unauthorised distribution and reproduction. It became a legal issue when someone or an industry losses profit from the revolution. It was mentioned that “Napster was just an easy target instead of going after each and every one of its users around the world” (Wired). Regulation on Intellectual Property (IP) such as copyrights of online material seemed to have failed even after Napster was made an example of in a lawsuit and made to shut down. There are still no controls on wide spread online piracy, copyright infringements and illegal file sharing.

In December 1999, Napster became the first ever file sharing business to be held accountable for its user’s copyright infringements. The Recording Industry Association of America (RIAA) on behalf of its members filed a lawsuit against Napster for the following reasons:

(1) That its users were directly infringing the plaintiff's copyright;
(2) That Napster was liable for contributory infringement of the plaintiff's copyright; and
(3) That Napster was liable for vicarious infringement of the plaintiff's copyright.

Napster was created by Shawn Fanning in 1999 to allow users to exchange and share MP3 files across the net (McManus, 2003). This service facilitated a peer-to-peer (P2P) file sharing service which saw its users directly infringing the copyright status of music that belongs to artistes and performers through illegal reproduction and distribution of copyrighted music. The lawsuit was welcomed by the music industry as Napster was accused for the drop in CD sales (King, 2000). However, this in actual fact was cause by the recession and booming market of video games and DVDs (Forrester Research in August, 2002). RIAA was also accusing Napster for the loss of millions of dollars in the sales of royalty as most of the public were using Napster’s services to download songs instead of buying the original CD.

In defence to the allegations made, Napster brought up a few arguments. One of which is the Betamax Defence precedent from Sony’s Beta tapes. The case stated that new technology such as the video cassette recorder made by Sony should not bear the burden of copyright infringements where it is capable of considerable non-infringing use (Murdoch law journal, Austlii 2004). The court ruled that Betamax Defence does not apply to Napster who had actual knowledge of the infringement of copyright by the users as compared to Sony.

In the case of Napster, the court ordered RIAA to prove that they own copyrights to millions of music files they seek compensation to. There is the other matter for complication where RIAA represented its members only in this lawsuit. It’s like unionism in an industry. Not all artistes and performers are part of the union.
The question persist, who exactly broke which law? Napster could probably be guilty of contributory infringement and vicarious infringement while its users are the infringers of copyright with unauthorised distribution and reproduction for music files. The complication of cyber world such as impracticality and cost has prevented RIAA from going after the users individually.

Napster was directed to monitor the network activity and to stop or prevent any illegal activity that takes place on its servers. Failing to do so, Napster decided to terminate its services and filed for bankruptcy. Napster cessation of its services failed to prevent the other such similar illegal activities that still takes place in the virtual world. New successors such as Kazaa, Limewire, Morpheous, BitComet and other providers stepped up to the platform that Napster left. They are considered illegal as they allow users to share music and movies at no cost. There were no exact regulations or laws enacted after Napster’s case to prevent the similar activities practised by the virtual communities, making Napster’s case a ‘lost cause’ (Johnson, 2006). In reality, the court order given for Napster to stop or prevent illegal activities were not realistic considering the jurisdictional issue between different countries in the virtual world (Douglas, 2004). Take for example, a country such as Malaysia has the ability to stop an infringement of copyright but allows the breach of copyright. Compare this with other countries like the United States that offers greater copyright protection of material that streams through their internet gateways. In Napster’s case, it is inevitable that a company who offers P2P cannot impose complete control over the activities of individuals around the world.

At the recent Society of Motion Picture Television Engineers (SMPTE) meeting, the subject of copyright monitoring was raised when the engineers promoted the idea of time shifting to satisfy the consumer’s demand of such service in the modern day and age. There was clearly no solution to the issue at this present point of time. Intellectual property agenda in the digital millennium has not found its footing worldwide as yet in contrast to the cyberspace and virtual world that has no boundaries which is fully develop. So, where does intellectual property in relation to the virtual world stand?

Technology in the media industry has evolved so much such that interested parties: the recording and film industries, media providers and the government should look into new ways of protecting the industry. The fact that pictures and music are going to be made available to the public whenever they want it in the form of time-shifting and format they need would cause problems such as duplications of media which involves copyright infringements. This would be hard to monitor.

In a journal review by Schonberger and Crowley, regulation between the real world and virtual world might find it hard to seek a common ground. It is difficult to place control over the intellectual property rights between both worlds that overlap. Schonberger and Crowley claim that the most obvious target of the real world regulators would be the providers of the virtual world such as Napster (Schönberger & Crowley, 2006). This would be seen as a massive regulatory failure as it would not only cost in economic grounds such as lawsuits but also impede on creativity and freedom of development in the virtual world.

In recent debates about the Hew Griffiths case, where an Australian resident and a British citizen who never stepped foot in the America was extradited on February 2007 for his involvement in the international software piracy group named Drink or Die. The article from a well circulated industry magazine, Computerworld, has highlighted a few points where it is believed that Intellectual Property (IP) prosecution might have gone borderless in this case. Hew Griffith is the first ever case in which extradition was involved to seek justice for IP rights.

Gary McKinnon, the hacker who entered various U.S. military and National Aeronautics and Space Administration (NASA) computers in 2001 and 2002¡í faces a similar verdict - extradition to the US for computer crimes he committed in another country. The U.S government claimed that Gary McKinnon caused $700 000 in damages; which was probably just the cost of setting up the security system that was breached even if nothing was touched or stolen.

So whether the accused is a ‘foreign terrorist’ or merely a copyright infringer, the issue of how we hit upon virtual crime remains the same as it is purely based on location of victimisation. It may be a matter of degree of the crime which perhaps was a right decision for the extradition of someone for the ‘greatest military computer hack of all time’, but not for ‘cracking softwares’. In reference to the two cases mentioned, it looks like the United States might be looking into extraditing even more criminals in the future since most owners of IP rights are based there. There is the cost issue of which country would bear it? Will all the IP criminals end up in the United States prison funded by their tax payers? Regulations for IP in the virtual world might need some lines drawn to bring in parties who should take responsibility for the crimes of their own citizens.

Regulations cannot always prevent infringement of copyrights in the cyberspace or contribute to white collar crime prevention as much as others would like to think.. Regulations cannot do so because there is no direct identification of who owns which item to enforce IP laws in the virtual world. It would be too time consuming and costly for any organisation to track down hackers or illegal activities. This would happen in Napster where most users if charged with illegal downloading, can use the defence of ignorance as they do not know which copyright whose it belong to. Thus, it makes it hard for the copyright infringers to be persecuted. This is an example of the failure of regulation which involves Intellectual Property Rights.

Cyberspace is a big black hole where it contains everything everybody has; and unless users are alerted in their face to the owners of each site and which media is copyrighted, it will be assumed that it is free for grabs. Take for example, if Billy searched for ‘free ringtones’ via search engines and it yielded a few results which then allowed him to download them; Billy wouldn’t know that the ringtones he downloaded came from somebody else in China who extracted it from a CD and placed it online for public access. That said, the cyberspace and its items are almost impossible to manage, allowing people to access what is legal and what is not. This is a result of having certain countries that have no proper law and management of internet procedures. The cyberspace has to have more defined arrangements and management by the virtual community. If and when this happens, that the cyberspace is more managed and regulated by its own community, laws and regulations can be enacted to protect IP rights where piracy, illegal downloading and distribution can be controlled.

Countries such as China, Indonesia and Thailand have very lax rules on copyright infringements which some scholars believe that is the reason for major development in China at this present time. Thailand is in the process of liaising with Malaysia and big corporations such as Microsoft to curb piracy with shared agreements and regulations which has been an issue for a long time in both neighbouring countries (ZD Net Asia, 2007). Thailand is in a dilemma on how to due with this issue when copyrighting and piracy has become a norm embedded in their culture which would be hard to alter.

Countries such as the United States would find it difficult to call for standardisation of law for cyberspace usage as it needs countries across-the-board to be convinced of the need for law enforcement in virtual world.

In conclusion, every individual who uses and benefits from the power of the internet in this new technology world has an interest in preventing cyber crime such as infringing copyrights. The digital age has created a borderless world for large cyber crimes. So, our law enforcement should be synchronized and borderless as well. Every software creator and artiste has a responsibility to protect their copyright and every individual has the right to obtained affordable software to prevent illegal free downloading using peer-to-peer networks. Napster is an example of how the United States government would not tolerate white collar crime in the area of technology. Yet, it seems that there was little benefit from this precedent. Regulations on virtual crime around the world have not really developed to synchronise the laws or usage of the virtual world. There is no governance in this particular world that helps regulators in the real world enforce laws. This proves that the Napster’s case did not impact us at all with the ongoing of other P2P providers.



References
• Attorney General’s Department, http://www.ag.gov.au , viewed 31 January 2008.
• Computer world magazine, http://www.computerworld.com.au/index.php/id;317400561 , viewed on 30 January 2008
• Douglas, G BA (Hon), LLB (Hon), Phd (March 2004); Copyright and Peer-To-Peer Music File Sharing: The Napster Case and the Argument Against Legislative Reform, Volume 11
• Borland, J (2000), Court adjourns without decision in Napster case, http://www.news.com/2100-1023-246416.html , CNET News.com
• BBC News, Hacker fears ‘UFO cover-up (2006) http://news.bbc.co.uk/2/hi/programmes/click_online/4977134.stm , BBC News, International version, viewed 6 February 2008
• Johnson, A. (2006) After Napster: Illegal downloads continue, http://media.www.mtsusidelines.com/media/storage/paper202/news/2006/09/28/Features/After.Napster.Illegal.Downloads.Continue-2313711.shtml , viewed 2 February 2008.
• King, B. (2000) Enapster: Musics Friend or Foe?, http://www.wired.com/news/business/0,1367,36961,00.html , viewed 30 January, 2008
• McManus, S (2003) "Napster: A History," http://www.sean.co.uk/a/musicjournalism/var/historyoffilesharing.shtm , viewed 2 February 2008.
• Schönberger, V & Crowley, J (2006) Napster’s Second Life?: The Regulatory Challenges of Virtual Worlds, Northwestern University School of Law, Northwestern University Law Review, Vol. 100, No.4, U.S.A.
• ZD Net Asia (2007), http://www.zdnetasia.com/news/business/0,39044229,62009847,00.htm , viewed 20 February 2008