Catching Up On The MP3 Catch-22

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Stop me if you've read this before. A relatively new Internet company, on the cutting edge of technology, pushes the law's envelope when it comes to federal copyright law and, in doing so, steps on the toes of an established industry. Worried about losing its intellectual property, not to mention a lot of money, the industry pushes back and a federal judge sides with the old and punishes the new.

We saw this scenario earlier this year with Napster and its fight with the music industry. We saw it just a few weeks ago in the realm of digitally-manipulated movies. And on Wednesday we saw it again when U.S. District Judge Jed. S. Rakoff ordered MP3.com to pay millions for "willfully" violating Universal Music Group's copyright by essentially causing or allowing copyrighted material to be re-played or re-broadcast for commercial purposes.

In each case, the new company had used the Internet and fascinating new technology to challenge the old guard, arguing that existing federal copyright laws don't specifically apply to these technologies and that medium. And each time, a judge has extended the scope of those laws to include the dot-com world even while recognizing, explicitly or implicitly, that the law in this area is scrambling to catch up with the cyberworld.

In the case of MP3.com, the judge was explicit with his disdain, saying that his ruling against the music-sharing company was designed to send a message to the Internet community that copyright infringement isn't and shouldn't be considered some badge of honor among techies. Rakoff said that some such companies "may have a misconception that, because their technology is somewhat novel, they are somehow immune from the ordinary applications of laws of the United States, including copyright laws."

But while Wednesday's decision clearly is a victory for Universal Music Group in particular and the music industry in general, and while it is a crushing, perhaps fatal blow, to MP3.com, it's hard to see how these individual decisions by judges in one part of the country or another are going to stop in any meaningful way the crush of new and seemingly illegal uses of Internet technology. At best, these rulings amount to trying to stop a flood by putting your finger in the broken dam.

Even then, the few decisions which have tried to stem the tide have been limited in scope and effect. In the Napster case earlier this year, for example, the trial judge enjoined the company from continuing to help its users to download copyrighted music. Had that ruling stood, it would have essentially shut down Napster and precluded in some way its users from doing what the judge deemed to be illegal. But then the 9th U.S. Circuit Court of Appeals stopped the injunction from going into effect, which means that Napster is still doing today what a federal judge in California said many months ago was illegal.

An while the attorneys for MP3.com pledged to appeal Wednesday's ruling in November, after the judge tallies up the exact amount owed by the company, the company itself will roll on with its business. Meanwhile, other Internet companies have sprouted up offering similar or slightly different services, many of which also are on the cutting edge of technology and thus perhaps on the dangerous ledge of the law. Indeed, by certain standards, MP3.com was one of the more responsible and reasonable companies involved in this sort of practice.

This Catch-22 is simply what happens when the laws fall behind the times. And the problem won't end until Congress steps in and passes new federal copyright laws which specifically address the Internet realm and which are specifically designed to deter copyright violations. Or the problem will end when the industries involved -- be they music or video or whatever -- move to embrace the folks in charge of the new technologies so that they all find a way to make a buck. And you would think with all the money involved in all of this, that wouldn't be too hard to do.

  • CBSNews.com staff CBSNews.com staff

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