NAPSTER v RIAA: FAIR USAGE ON THE INTERNET
On Monday July 3, Napster submitted its rebuttal to the RIAA's request for a preliminary injunction against the company. Unlike its original claim of protection as an ISP under the Digital Millennium Copyright Act (DMCA), the firm has shifted its defense to argue that sharing MP3 files of recorded musical works is in fact protected under fair usage rules. The implications and repercussions of this defense, if accepted by the Court, would literally redefine the manner in which copyright has been perceived by the industry, not to mention the evolution of online business models. Do Napster users actions constitute private, noncommercial use of copyright protected works? Does the service materially harm or enhance the value of such works? Is the recording industry partially at fault?

What do you think?

MI2N Survey: http://www.mi2n.com/qb/
GuitarSite Forum: http://www.guitarsite.com/discussion/

Some thoughts from surfers so far:

"No! I buy the music that I download off Napster anyway. I just want to listen to it while I surf!"

"Yeah, it's great to get free music, BUT how fair is it to the artists??"

"This is a wonderful way to acquire music that has never been released on CD format."

"What's the differance between Napster and any radio station? If I wanted to record a song, I could just call a radio statio, request it, and record it."

and for a laugh...
http://www.campchaos.com/
A site with pro-Napster animated films. You'll need a 56k modem, a browser that supports Flash 4.0, and a high tolerance for profanity.

NAPSTER, INC. OFFERS COMPREHENSIVE REBUTTAL TO RECORD INDUSTRY EFFORTS TO SHUT IT DOWN

San Francisco, California - July 3, 2000- Napster: http://Napster.com/ the world's largest file sharing community, in its opposition brief, argues that the non-commercial sharing of music is "common, legal and accepted," and said that increases in CD sales, in part driven by Napster usage, undermine record industry claims of harm.

Napster's brief opposed the record industry's motion for an injunction that seeks to shut the service down.

The brief makes six core arguments lending great legal force to Napster's position that neither the company nor its users are violating the law.

First, the RIAA contends that Napster users are infringing. However, under the decision that protected the manufacturing of MP3 players, referred to as "the Diamond decision," and under the Federal statute called the "Audio Home Recording Act," (AHRA) consumers have an absolute right to create and transfer digital music for noncommercial purposes. And since its users are not directly infringing, Napster cannot be liable for contributory infringement.

The record industry has argued that Napster users infringe on copyright protections when they share files for their personal use. But the Ninth Circuit Court stated "AHRA protects all noncommercial copying by consumers of digital and analog musical recordings." Napster forcefully argues that the development of a new technology that expands the potential number of noncommercial copies does not alter the statute's intent or broad scope of immunity.

Second, the brief shows that because Napster's directory service is capable of numerous and substantial non-infringing uses, under the Supreme Court's decision in the Betamax case, Napster can have no liability. Under the Betamax case, as long as a technology is "capable of substantial non-infringing uses," a provider making a technology available cannot be held liable for copyright infringement, even where it may have encouraged infringing uses and the technology may in fact have been used for infringing activity. Over protests by the entertainment industry in 1984 that the Betamax technology would destroy its markets, the Sony Court refused to enjoin its distribution. At the time, Jack Valenti, President of the Motion Picture Association of American, stated that the VCR was to the movie industry "as the Boston Strangler is to a woman alone." Valenti now proclaims the "grave risks" to all intellectual property if "Napster and services like it" are allowed to survive.

Third, because Napster users use the Napster service in a variety of ways that constitute "fair use," such as sampling music and "space shifting" (the process of sharing files between hard drives and players), no injunction can issue. The brief shows that Napster users are buying CDs after sampling music and making portable copies of their music files for private use, and both practices are protected under the law.

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. Over 84% of Napster users report downloading music files to see if they want to buy the work, according to the Fader study appended to today's brief, and even the RIAA expert's data show that sampling was the principal use of Napster. Moreover, the impact of Napster has proven positive, not negative, on Plaintiffs' CD sales, which are up 8 % this year over last year.4 On the issue of "space shifting," the brief discusses how the Ninth Circuit has ruled that "space shifting" of works already owned constitutes a fair use, calling it "paradigmatic noncommercial personal use."

Fourth, as the Plaintiffs have themselves engaged in the practice of copyright misuse, enforcement of their copyrights against Napster is precluded. Far from opposing file sharing as a matter of law or principle, the brief shows that the Plaintiffs in this case encourage the sharing of MP3 files but want this activity to be their exclusive province.

For example, Sony Corporation of America, which owns Plaintiff Sony Music Entertainment, markets a portable listening device called the VAIO Music Clip that plays MP3 files, regardless of whether the files were made with the authorization of the copyright holders. 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. Indeed, Sony's advertising encourages its customers to "Log-on and download ATRAC3, MP3 or WAV files from your favorite music web sites." Further, as the brief shows, the Plaintiffs simply did not believe that MP3s hurt their CD sales.

As discussed above, Plaintiffs have encouraged Internet users to download MP3 files from their affiliated websites; to encode Plaintiffs' works to MP3 format using encoding software; and to obtain MP3s from the Internet for use in digital players. Plaintiffs have expressed to the public that individuals will not be sued for obtaining MP3 copies of Plaintiffs' works from online sites. Napster's brief argues that, as a matter of law, "by encouraging the creation and copying of MP3 files and by making such public statements, Plaintiffs have impliedly licensed such conduct, and have waived the right to sue for it.

The zenith of hypocrisy is the position taken by Metallica, which piously claims now that its money is being stolen by Napster's users. Not only did the band members themselves copy music rampantly in days before they were wealthy, but in August of 1997, when specifically advised that Metallica songs were being encoded into MP3 files and transferred via the web, they stated succinctly, "We don't give a f***" [Ulrich Dep. 39:24-42:25, Exh. 373.]

Fifth, no injunction can issue because it would violate Napster and its users' First Amendment rights to free speech.

The Napster brief recognizes that an important free speech issue is at stake. In fact, the brief argues strongly, "Plaintiffs have virtually no likelihood of success on this claim because the relief they seek is forbidden by the U.S. Constitution."

As discussed in the brief, "Napster's directory provides users with information about the files that Napster users have made available for sharing at any given moment. The injunction that Plaintiffs seek would effectively require Napster to take down its directory. The law is clear that such directories are entitled to First Amendment protection. The fact that the Napster directory is electronic and resides on the Internet does not change the analysis." Citing the Supreme Court, the brief points out that "the relief that Plaintiffs seek is particularly egregious because it would silence the Napster community in advance of any ruling by the Court confirming that Napster's directory is protected by the First Amendment."

Finally, no injunction can issue because to do so would irrevocably alter the status quo, result in permanent injury to Napster, and ultimately not benefit Plaintiffs. The law is clear that if Napster can show that Plaintiffs have either suffered no injury or that the injury is de minimis, no injunction can issue.

Five independent studies have all confirmed Napster's substantial positive effect on music purchases and a sixth finds no significant reduction in CD purchases. That broad body of consensus is powerful market proof that Napster's only present effect on Plaintiffs has been strongly beneficial as users sample music and buy more. Far from blocking Plaintiffs' entry into the digital download market, Napster's presence is paving the way. Napster is building consumer awareness and acceptance of downloading music, building demand, and providing an inventory of music that is playable by the new SDMI-compliant players like the Rio and Sony Vaio, which play both MP3 and other files in secured formats. This inventory is necessary to generate consumer desire to purchase these players, and consumers must, in turn, own such players to play (and buy) digital downloads.16 The real data show that freely available music is seeding the market. Moreover, since, pending trial, the market for CDs ($14 billion in the United States) dwarfs the market for digital downloads, even a minimal uptick in CD buying due to sampling would offset any loss of download revenues.

About Napster, Inc.

Napster is the world's leading file sharing community. Napster's software application enables users to locate and share media files from one convenient, easy-to-use interface. It also provides media fans a forum to communicate their interests and tastes with one another via instant messaging, chat rooms, and Hot List user bookmarks.

Opposition to RIAA's Motion for Preliminary Injunction
PDF document (182 kb) http://dl.napster.com/opposition.pdf

Napster Offers Comprehensive Rebuttal to Record Industry Efforts to Shut It Down. Brief Argues Napster File Sharing Is Legal
Press Release: http://napster.com/pr.html

What do you think? Let us know @ GuitarSite Forum:
http://www.guitarsite.com/discussion/

So, that's Napster's story. Here's a Metallica fan:

"Metallica is one of the best bands ever. They're not even suing their fans, they're suing Napster because they aid in the distribution of copyrighted music. Their true fans already have their albums anyway. It's not b/c of money either. They're loaded with money. It's a matter of principle. They have the means to go after Napster whereas some new bands that only have one hit don't have that luxury. They're trying to help out those that aren't so big. and they only want the copyrighted music taken off. They don't care about the trading of bootlegs. I may not agree with the suing of Napster but getting mp3's and burning them on a CD is the same as going to the store and stealing the CD. Long live Metallica." [Metallicat81]

and another comment from the GuitarSite.com Discussion Forum:

"Ha, if metalica wanted to control their own music, they wouldn't be dealing with a record company. As far as I see it, the only poachers out there are the record companies who suck the artist dry while they sit pretty. Now that metallica are big, the record company still has them in a vice, making them do things that they wouldn't have done 10 years ago. So, have metallica sold out? Yes, when they signed with a major record company. But which band doesn't? However, sueing your fans isn't the way to go about protecting your works." [Pete]

Now to hear from some of the artists:

ARTISTS, MANAGERS AND INDUSTRY LEADERS SPEAK OUT AGAINST NAPSTER:

"I am excited about the opportunities presented by the Internet because it allows artists to communicate directly with fans. But the bottom line must always be respect and compensation for creative work. I am against Internet piracy and it is wrong for companies like Napster and others to promote stealing from artists on-line." -- Elton John

"Artists, like anyone else, should be paid for their work." -- Lou Reed

"Let's get the obvious out of the way: This is not just about money (as some of the more cynical people will think). This is as close as you get to what's right and what's wrong. Metallica have always been in favor of giving the fans as much access as possible to our music. This includes taping sections at our concerts, and streaming our music via our website. And while we certainly revere our fans for their continued support and desire for our music, we must stress that the open trading of any copyrighted material is, in effect, the looting of our art. And that is something that no artist can, in their right mind, condone. We are in the business of art. This is a walking contradiction if ever there was one. However, there is no denying it. On the artistic side, Metallica create music for ourselves first and our audience second. With each project, we go through a grueling creative process to achieve music that we feel is representative of Metallica at that very moment in our lives. We take our craft –whether it be the music, the lyrics, or the photos and artwork– very seriously, as do most artists. It is therefore sickening to know that our art is being traded, sometimes with an audio quality that has been severely compromised, like a commodity rather than the art that it is. From a business standpoint, this is about piracy- a/k/a taking something that doesn't belong to you; and that is morally and legally wrong. The trading of such information –whether it's music, videos, photos, or whatever– is, in effect, trafficking in stolen goods. Back to the obvious: Very successful recording artists are compensated extremely well for what they do. For every Metallica, however, there are an endless number of bands who rely on what ever they can get in royalties to survive. And while we all like to take shots at the big, bad record companies, they have always reinvested profits towards exposing new bands to the public (although sometimes not the RIGHT bands). Without this exposure, many fans would never have the opportunity to learn about tomorrow's bands today. Napster and other such sites were obviously not conceived to lose money. They, like the labels, must make money or they're out of business. And whatever money they are generating from their site is dirty money. It's being taken out of the hands of the artist and the record labels and put into the hands of another corporation." –Lars Ulrich, Metallica

"We are and always have been very protective of our music with regards to usage or licensing in advertisements, film soundtracks and so on. This is something we take very seriously. We cannot allow other businesses and entities to misappropriate our music to represent or advertise what they do in any way. Although we have been active in our support of digitally downloadable music, it's another matter entirely when businesses abuse that access -- especially in a manner that could be misconstrued as an endorsement of their products." -- Mike D., The Beastie Boys

"As an artist and songwriter I believe that this is an issue that needs to be looked at and taken very seriously. In what other industry can someone take a product, not created by themselves, make money from the use of that product and not compensate the original creator? Someone needs to take a stand and protect the songwriters and artist." -- Victoria Shaw, country music singer/songwriter

"I think the fact that Napster is stealing recorded music is something that we have to stop. It's taking money out of my kid's mouth. That's the way I look at it. It's wrong. It's inherently wrong. It's stealing." -- Art Alexakis, Everclear

"Many artists have spent their lives honing their craft and now some anonymous person in a little dark room with a computer somewhere is able to collate that lifetime's work and pass it around the world for free. It's just not on. Stealing is stealing regardless of what name you choose to call it. You get people saying 'I've been a fan of yours for twenty years, I'm entitled to have it for free'. Well I'm afraid you're not. That's no different to me than going down to the local greengrocers and saying 'well, I've been coming here for twenty years and so I'm going to help myself to all your fruit and vegetables from now on thanks very much." -- Matt Johnson of The The

"As a band, we are incensed at the amount of disregard Napster has toward how musicians make a living. We only get paid from our recordings if they are bought in legal ways. By disregarding copyright laws we lose out. We are a 'baby band', struggling to stay alive financially. Every dollar we lose to "fans" stealing our music hurts...if folks knew that the majority of the major label bands are not making any income from their recordings...and losing money by touring, they would be astounded and a bit more sympathetic to the artists. What is supposed to set the industry free is killing it." -- The Push Stars

"There are laws against piracy in this country, and unless we enforce them, how do we expect any other country to care about protecting our rights from piracy?" -- Denyce Graves, RCA Victor Red Seal, Classical recording artist

"Everyone I know is excited about all the possibilities the Internet has to offer. As a musician, the Internet has made it possible for me to share my music with people that could have never been reached by conventional methods. It has been taboo for artists to speak out concerning the business side of their music. The fear has been that the buying public, as well as other artists, would perceive this concern as greed, and that the artists' sole purpose for creating was the money. This perception has silenced many artists concerning MP3 and Napster. The silence must end. As a child I created music to express my inner thoughts and feelings, and that purity has stayed with me throughout. The day I decided to share my music with the world, was the day I decided to walk the fine line between art and commerce. I have been blessed in that I do what I love and can support my family with what I create. When my music is given away, as taboo as it is for me to say, it is stealing. I need not defend my motives for making music, but the distribution of my music has made me business conscious. I have decided to sell my music to anyone who wants it, that is how I feed my family, just like a doctor, lawyer, judge, or teacher. Not to insult anyone's intelligence, but my music is like my home. Napster is sneaking in the back door and robbing me blind." -- Scott Stapp, lead singer/ lyricist for Creed

"It's high-tech bootlegging, with artists definitely losing revenue. I appreciate that people like my music enough to download it. But we need to join forces and fight this." -- DJ Scratch, artist/producer Billboard,

"[Napster] is particularly discouraging to young artists and songwriters trying to get their foot in the proverbial door of the music business. I suppose it should be a compliment that people dig your music so much that they're swapping it online. But thievery is thievery. If you dig an artist that much, then you should want to help keep that artist alive by purchasing the actual recording." -- Anastacia, Daylight/Epic recording artist Billboard,

"If artists don't get paid for making music, how are they supposed to survive? Stealing from an artist is not the best way to show your appreciation for their work." -- Aimee Mann Entertainment Weekly, March 31, 2000

"Artists should be compensated for the work that they do." -- Deborah Harry of Blondie Salon,

"No matter what you do for a living you should get paid for your work, whether you're washing dishes or recording songs." -- Bif Naked Salon,

"Nobody wants to look the artist in the eye and say, 'Giving your music away for free is going to make you lots of money' – not while keeping a straight face, anyway." -- Kristin Hersh, Throwing Muses Salon,

"Artists should be compensated for their work and protected against a technology that allows copyrighted music to be illegally downloaded. But Napster and technologies like it are just a part of the overall problem. Intellectual property in the Internet Age must be staunchly protected. Without meaningful safeguards, the livelihood of the creative community is at risk." -- Mike Greene, President and CEO of the National Academy of Recording Arts and Sciences

"We send them [artists] to Napster and they see all their work being given away for free, and they're stunned and horrified. What disturbs me the most is that artists are never discussed. Artists just seem to be a ping-pong ball whacked back and forth and nobody gives a f*** about them. And it turns out Napster's no better than the record companies. In fact, they're worse, because they're offering nothing and taking everything. Napster's the tip of the iceberg. The broader question is intellectual property on the Internet. Intellectual property should be valued and protected or we'll go down. And not just music either. Why would anybody sit down and write a novel it it's going to be pirated for free the first day it's released. If nobody values intellectual property, then we'll all be in the insurance business." -- Ron Stone, Gold Mountain Management (represents Bonnie Raitt, Tracy Chapman, Ziggy Marley and others) Salon,

"The artists, writers, and labels aren't being compensated. It's certainly not the way copyright laws were set out to work when managers and artists and labels have no control and it's a free-for-all out there, it's problematic." -- Mike Robertson, Mike Robertson Management (represents Nitty Gritty Dirt band, Wade Hayes, BlackHawk and others) Billboard,

"All of a sudden a song could get out without the act's knowledge or the label's knowledge, and all the hard work that's been put into the project is then lost." -- Ken Crear, Creative Management Group (represents Next, Sisqo, Mary Mary and others) Billboard,

"Napster is robbing me blind." -- Chris Robinson, Black Crowes Salon

"It pisses me off and I resent it. I spent $15,000 on my Web site. I paid a publicist for a year and a half out of my own pocket. And now some kid's going to tell me my catalog should be free? They're just entrepreneurs setting themselves up to make a ton of money off other people's work. Where's the compensation for the artists? I know people using Napster are chuckling about kicking big, bad record labels. But as evil as the record companies may be, at least they're paying for your recording budget, and at least they're promoting you, and paying for tour support. We can make a new model—yeah right. It's laughable. Those people have no idea how the music business works. Because unless you're Alanis Morissette or Dave Mathews, you're not making money on the road. It's all I can do to break even on tour. And the only reason to tour is to promote the sale of my CD." -- Jonatha Brook Salon,

"Our label is behind us from the start. They work hard for every nickel they make off us. They deserve to be paid. It's a no brainer. If it's not scanned, then the label at the end of the year says so long, and all of a sudden our careers are over, and I'm back at McDonald's. -- Morgan Rose, Sevendust Salon,

"If Napster had out best interest in mind then they would ask our artists. Nobody at Napster has ever called to ask our permission. Artists say 'Ask me.' Explain what it is and ask if I want to participate. But Napster doesn't give them an opportunity. They're basically saying f*** the workers. Let them work their asses off and we'll give it away for nothing. The bigger the lie the more you get away with, I suppose. There's no question Napster's going to lose in court. The only question is how much money in damages they'll have to pay. I hope it's enormous because then the big money investors, which Napster needs, will walk away. -- Cliff Burnstein, Q Prime Management (represents Red Hot Chili Peppers and Metallica) Salon,

"Investors are going to realize it's a theft business and ask, how does it make money? It doesn't. It's all very well to say music should be free, but the reality is if you don't pay the artists, the road crew, the musicians, the recording studio, if there's no money in music, there's not going to be much music left. How many people would be doctors is they had to work for free? What if we said, 'Hey, the airlines are ripping us off and we don't want to pay for tickets, we'll just steal them.' Guess how long the airlines would last? If it becomes free, then it becomes extinct." -- Miles Copeland (manager for Sting)

"I couldn't believe it when I found out that this Napster was linking thousands of people to the new Notorious BIG album "Born Again," a week before it even hit the streets. This album is a labor of love from Notorious BIG's friends to the man, his kids, the rest of his family and everyone else whose lives will never be the same since BIG passed. BIG and every other artist Napster abuses deserve respect for what they give us." -- Sean "Puffy" Combs, CEO, Bad Boy Entertainment, Inc.

"Dixie Chicks and Senior Management are huge fans of the Internet and its possibilities. While there are great efforts being made to ensure that the rights of the artists and songwriters are protected, Napster's apparent way of doing business sets those efforts way back. If the Internet thieves are not stopped or better regulated, it not only robs current artists but might have even more serious repercussions for the next batch of artists. I support and applaud the RIAA on their efforts to make sure that Internet companies are not stealing the rights of the people who make the music." -- Simon Renshaw, Senior Management (personal manager of the Dixie Chicks)

"The band's music comes from the heart, and knowing how much hard work goes into making that music, this type of Web site makes us sick." -- Rusty Harmon, Fishco Management (represents Hootie & The Blowfish)

"Copying and distributing music illegally is the ultimate discrimination. It sends a message to our neighbors who create musical art that what they do, who they are, is not important enough. Does it matter? I can think of several stories where the rights of a particular group of people were deemed unimportant. None of them have a happy ending. Therefore, I strongly urge the operators of NAPSTER to use their technological acumen to bring an end to the trafficking of pirated musical works." -- Frank Breeden, President, Gospel Music Association, Inc.

"With the increasing accessibility of on the Internet, and the new technology available on it, there must be a matching increase in responsibility. Without public accountability, this responsibility reverts to groups like the RIAA to seek out those who are misusing the advances in technology and to the courts to adapt and enforce the law. Napster is allowing people to disregard copyright laws because they were not written in the spirit of today's technology. These copyright laws are the only things that protect what musicians do for a living; write songs. Napster is allowing people to steal these songs." -- Jeff Cameron, Jeff Hanson Management & Promotions (represents Creed and other artists)

"Napster is undermining the efforts of creators and innovators of all kinds who are at the forefront of the electronic marketplace." -- Robert Holleyman, President and CEO, Business Software Alliance

If the trend continues without some sort of security or digital watermarking to ensure payment for digital downloads, there will be less and less good music. While most of us artists create for the love of music, why would we try to promote or expend large amounts of effort and money producing and recording our music, only to have it snatched away for free in a money losing proposition? While Napster users et al may enjoy getting their music for free, if it continues they'll find within the next several years a lot less artists making music for them to enjoy. After all, why pour your heart and soul into recording and releasing music when you can't make a living at it anymore? This isn't artists being greedy or capitalist, it's simply wanting to make a living doing what you love. We may continue to do what we love, just not share it with the rest of the world. - mycourt27@yahoo.com.

This is the central problem with Napster. Napster is not intrinsically bad or good: it may constitute an important factor in an artist or label's overall marketing strategy. The issue is the expropriation of the content creator's rights over the distribution of music and the impact this is likely to have in the long run on their incentive to create and innovate. Without this, not only is the industry worst off, but so is the consumer in the end. [Eric de Fontenay, Editor: Mi2N MUSIC BUSINESS NEWS]

What do you think? Let us know @ GuitarSite Forum:
http://www.guitarsite.com/discussion/

Also of interest:

PLAYING MUSIC IN PUBLIC MAY REQUIRE COPYRIGHT CLEARANCE, BMI REMINDS SMALL BUSINESS OWNERS

Business owners who use copyrighted music in their establishments may think songwriters are compensated for public performances of their songs in the purchase price of CDs. They sometimes don't understand why businesses are responsible for obtaining a license from performing rights organizations, such as BMI, before they can play copyrighted music for their customers...
http://mi2n.com/press.php3?press_nb=9882