Napster Technology Outpaces Law

Napster's legal fight with the recording industry illustrates what typically happens when technology overcomes existing legal standards. In the case of the Internet start-up versus the long-established music makers, the big question is whether existing copyright laws -- most of which have been on the books for decades, even centuries -- cover the new shape of the cyberworld.

Napster generates an Internet site which acts as a middleman between music fans and sites around the world where the music e-surfers crave can be downloaded into their computers and then played. Napster users, essentially, trade e-music with other Napster users with the company bringing the two users together and facilitating the exchange. If that's confusing, just think of it as a free on-line movie service for movie buffs (imagine what Hollywood would think of that) or a free on-line sports channel for football fans (ditto the NFL). And, of course, the "free" part in all of this is what has the folks at the Recording Industry of America up in arms.

Logically, and perhaps legally, there is great merit to the industry's argument that Napster is inappropriately helping its users get for free copyrighted material which people are supposed to pay for. With an exception which may or may not be relevant, the federal Copyright Act of 1971 forbids anyone but a copyright owner (and you have to register a copyright the way you register your car) from copying a recording without paying royalties, in some form, to the copyright's owner.

The argument is that record-makers -- the musicians themselves in most cases -- create "intellectual property" when they compose music and lyrics and must by law be compensated for the subsequent use of that intellectual property. Otherwise, the industry argues, people would simply steal each others' ideas and work product without fear of punishment or cost. That's why copyright laws were drafted to begin with. And on the surface of it, it looks likely that the next few judges who look at this issue will decide that existing copyright laws should indeed be extended to electronic users, much to the delight of the industry and the chagrin of both Napster and its customers.

That's not to say that Napster doesn't have some interesting arguments to offer as the case moves closer to trial. The company says that its clients are not violating music copyrights because the file-sharing isn't for "commercial use." Napster is relying on that exception to the Copyright Act, called the Audio Home Recording Act of 1992, which protects consumers from suits by the record industry when consumers copy music for their own use.

And to the extent that Napster isn't charging for its service (it isn't) and Napster's clients don't charge each other (presumably, they don't), it may be a bit hard for the music industry to argue that Napster's customers aren't downloading music files for their own use. But the industry argues that the 1992 Act simply doesnt apply to protect Internet copying in the form it is being practiced in this case.

Another argument the industry will have to get around is the "fair use" doctrine, another exception to general copyright law. The "fair use" doctrine allows for a certain amount of copying of copyrighted material in certain circumstances -- like when a television station runs copyrighted material because it has enormous news value. Napster argues that its customers are "fairly" enjoying copyrighted material within the meaning of the rule. The music industry says that the "fair use" doctrine contemplates limited copying and publishing and certainly does not contemplate the sort of widespread copying that goes on in the world of Napster.

These are the core issues which ultimately will be decided by a U.S. District Judge in San Francisco and, presumably, by federal appeals judges, even the Supreme Court itself. But already there are rumblings in Congress about enacting new laws which would be specifically designed to solve the dilemma of what to do with copyrights in the Age of the Internet. Don't be surprised, in fact, if the politicians come up with new laws before the legal wrangling over Napster is resolved.

And don't be surprised, too, if Napster and the recording industry come up with a settlement which allows the company to continue to do what it does while forcing its users to pay in some fashion for the privilege of doing what they do. This scenario is especially possible if the industry gets the injunction it is now seeking or gets some opposite indication from the judge that she is leaning toward the company's substantive positions. If this is a case about the law trying desperately to catch up with technology, remember that it also is a case about both sides trying to keep happy the ultimate market power -- the music fan.