0.5 Napster, grokster, and the riaa lawsuits  (Page 2/5)

Shawn and his uncle, John Fanning, carefully considered the copyright question of their service even before officially opening Napster in June of 1999. They studied the law and concluded that, after a big court case, their service would be declared legal. “In an e-mail obtained by BUSINESS WEEK, John Fanning even suggests that there is only a 10% chance that Napster could lose a court case.” (Ante 2000, 112-120).

The RIAA (Recording Industry Association of America) brought suit against Napster in December of 1999. During the trial, which took place in 2000, the RIAA argued that “Napster users are engaged in the wholesale reproduction and distribution of copyrighted works, all constituting direct infringement. The district court agreed” (Anonymous 2001, 1004).

The court further conducted a four-factor Fair Use analysis, and concluded that typical uses of Napster could not qualify for Fair Use. Following is a summary of their analysis:

1. Purpose&Character: The use of music via Napster was not transformative simply for reformatting it into the MP3 format. Also, the transfer of files through Napster was commercial because it substituted for a purchase.
2. Nature of the use: Most items transferred through Napster were very creative, and therefore “closer to the core of copyright protection.”
3. Amount of the work: Napster users predominantly copied the entire song. While some complete copies could be supported under Fair Use, this was not one of them.
4. Market Effect: Napster harms the market for music in two ways. It reduces the demand for CDs among college students, and it became a barrier to businesses seeking to enter the digital downloading music market.

(Anonymous 2001, 1004)

During the trial, Napster claimed that its users downloaded music in order to decide whether or not to buy the CD. The court determined that such “sampling” is a commercial use and that the music companies already did supply short samples of their music. Claims that Napster did not harm the CD industry were refuted with statistics citing falling sales of CDs.

In addition to losing the fair use argument, Napster was also found guilty of contributory copyright infringement AND of vicarious copyright infringement. “Traditionally, one who, with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another, may be held liable as a contributory infringer. …. In other words, liability exists if the defendant engages in personal conduct that encourages or assists the infringement.”(Anonymous 2001, 1004). Vicarious infringement means that “the defendant has the right and ability to supervise the infringing activity and also has a direct financial interest in such activities”(Channel 2004, 6-12).

The Napster program encouraged users to copy files from other users, with no notification of whether those files were “legal” to download. Many users had no knowledge whatsoever of the copyright issue, and simply took what they wished. By the end of the trial, it was clear the Napster, as it had existed, was doomed.