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U.S. Copyright Office Rejects Napster’s First Line of Defense

By @NY Staff

In the latest legal twist, the U.S. Copyright Office and the
Department of Justice have rejected a part of Napster’s defense
which claims the company is protected by the Home Audio Recording
Act.

Both the U.S. Copyright office and the DOJ believe the Audio
Home Recording Act addresses a different phenomenon than Napster’s
file sharing technology, specifically the use of DAT recorders for
home taping.

In a press release, David Boies, attorney for the music site,
says “we have great respect for the DOJ, but in this instance we
believe their position is incorrect.”

Ironically, increasing evidence points to file-sharing
technology like Napster, as the reason behind growing record
sales.

A recent report released from Media Metrix shows a 345 percent
increase in unique users on the controversial file-sharing site,
www.Napster.com. That’s a total of nearly five million U.S. home
users, or four times the previous amount.

The six-month study also reports that use of Napster’s
file-swapping technology grew significantly in the work place as
well. Napster users more than doubled from 417,000 unique users to
nearly 887,000 users.

In a prepared release Hank Barry, CEO of Napster says “These
figures, coupled with the significant increase in CD sales during
that same time period as recently announced by the RIAA,
demonstrates the tremendous opportunity that Napster offers for
music lovers and artists alike.”

Barry is referring to a press release the RIAA put out on August
25 that reports CD sales have grown six percent since last year.
According to the RIAA, CD’s account for 86 percent of the total
music purchasing market, a $5.7 billion market.

Both Napster and online research firm Jupiter Communications
attribute the boost in music sales to new forms of digital music,
file swapping and online radio, among other media. Jupiter analyst,
Aram Sinnreich says, “There has been a dramatic change in the
Internet music industry in the last year, but it’s not in the
number of dollars that consumers spend, it’s the whole music
experience.”

“What we are seeing is the opportunity for a new format of
product in the commercial music industry, enabled by digital music
service providers who can wrap tools, technology and content around
the core library of songs.”

Sinnreich says sampling music by downloading a copy from the
Internet informs user’s purchasing decisions, “Record labels and
intellectual property owners have demonized various forms of online
music sharing, even as it has gained enormous traction among
consumers,” says Sinnreich. “The truth is that a better-informed
user will purchase more music products online and off.”

And Sinnreich isn’t alone in his assessment of online music as
marketing tool. Eric de Fontenay of Musicdish.com, a website
devoted to the world of online music, says peer-to-peer networking
is here to stay, and that the real problem the music industry is
faced with is finding a legal means to regulate such a multi-headed
hydra.

File swapping, says Fontenay, is even greater in Europe,
especially in France, where the cost of a CD is astronomical and
the population is better equipped with CD-burners and other devices
that make pirating tunes much easier.

But Fontenay is unclear on the fate of Napster, “I don’t think
their defense of fair use will wash with the legal system.”

And the RIAA has been explicit on the issue of Napster;
immediately cease and desist all services.

In a response to Napster’s stay of injunction, Hilary Rosen,
President and CEO of the RIAA says, “Napster’s latest defense is
yet another veiled attempt to reinvent itself, its legal position
and copyright law. The fact is the law is on our side. We are not
suing a technology, we are suing a company that is stealing work
that does not belong to them. They cannot build a multi-billion
dollar business on the back of other people’s works.”