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ISP-Planet: Napster, mp3.com Down, But Not Out

May 13, 2000, 18:56 (1 Talkback[s])
(Other stories by Patricia Fusco)

By Patricia Fusco, ISP-Planet

The music industry resorts to litigation. Will the music die?

"Can music save your mortal soul and can you teach me how to dance real slow?" -Don McClean, American Pie

There's no need to rush online and tap Napster for a track of Don McClean's famous tribute to Buddy Holly on American Pie. You will still be able to download your MP3 files, because the recording industry's slow dance courtroom attempts to derail mp3.com, Inc. and Napster, Inc. will fail to shut them down.

Last Thursday, U.S. District Judge Jed Rakoff ruled that Sand Diego based mp3.com was guilty of copyright infringement. On Tuesday Judge Radkoff explained his reasoning in the landmark decision against mp3.com, which was due in part to mp3.com's Beam-It service that directly streams copyrighted music to users.

The Recording Industry Association of America argued that such direct distribution directly violates copyrights because mp3 files were copied directly from copyrighted CDs.

mp3 Makes a Deal
mp3.com took the court decision as well as it could and continues to negotiate with the RIAA in search of an equitable business solution for the lawsuit.

Then it received great news last Friday when the company struck a licensing deal with Broadcast Music Inc., a publishing company that represents scores of recording artists, including Matchbox 20, Mariah Carey, and Everclear. The deal allows the mp3.com to carry more than 4 million BMI compositions in its catalog. In addition to the songwriters, more than 60,000 song publishers are represented by the BMI.

The deal marks the first time a recording company recognized the ability of mp3.com to distribute its products.

Napster Strapped But Still Standing
Napster, the popular song-swapping Web portal that eats bandwidth by the gigabyte, was not as fortunate as mp3.com.

In a decision issued last week, the United States District Court for the Northern District of California ruled that Napster was not eligible for protection under Section 512(a) of the Digital Millennium Copyright Act. In a case filed by A&M Records, Inc. et al., Napster had sought summary adjudication under this particular subsection, one of four potential "safe harbors" under the DMCA.

San Francisco U.S. District Court Judge Marilyn Patel ruled that "safe harbor" status is limited to Internet Service Providers that engage in "routing, transmission and providing of connections." The court held that Napster did not qualify for this safe harbor under ISP status. The court-issued narrowly-defined ruling does not dispose of the other safe harbors under the DMCA.

The court also ruled that there was a question of fact, which must be decided in future proceedings, as to whether other parts of the DMCA protect Napster. Although the RIAA had asked the Court to rule that Napster is not entitled invoke any of the DMCA safe harbors, the Court did not rule as the RIAA requested. It left the issue of application of the DMCA open for further litigation.

Furthermore, the court did not decide that Napster was liable to anyone for anything, or that Napster had done anything wrong, or that it had committed copyright infringement. Many disputed legal issues remain to be determined before the recording industry's claims against Napster are resolved.

Specifically, the Court did not address whether Napster falls within the U.S. Supreme Court's Betamax decision, which held that when a new technology is capable of substantial non-infringing use, the public cannot be denied access to the product. There are many artists and thousands of freely transferable MP3 files that the RIAA does not control, which Napster could transport even if the RIAA gets its way in court.

The RIAA's lawsuit does not allege that Napster directly infringes any copyrights, as was the case in the mp3.com ruling. Because mp3.com copied CDs and made them available from its server farms, RIAA made its case. But Napster turns a blind eye to how the music gets from a server somewhere on the Net, and merely point's customers in the right direction to where they can download MP3 files.

While all ears are turned to the Napster case, which will eventually define intellectual property rights on the Net, the heavy metal band Metallica requested that Napster block access to its recordings. At the request of the Metallica's recording label, Napster this week blocked access to more than 300,000 of the band's fans.

Metallica Nips Napster
When Metallica sued Napster in April, Napster stated that it wished to seek a peaceful resolution to the band's demands. However, on May 3, Metallica delivered a sworn accusation of infringement by users and thirteen boxes of documents containing the usernames of people who had allegedly made certain Metallica MP3 files available for sharing with other Napster users.

Metallica effectively restricted the free-exchange of any music by these users, including so-called "bootleg" recordings authorized by Metallica for free distribution.

Ironically, Metallica's notice to Napster recognized that the Napster system could be lawfully used to circulate some of the band's music. The notice asserted that Metallica makes no claim of copyright infringement with respect to recordings of their songs made by fans at Metallica live concerts, and that the band merely objected to the sharing through Napster of the songs and recordings originally released on Metallica albums.

The DMCA provides a procedure for users to dispute Metallica's allegation of infringement. Blocked users who have not infringed Metallica's rights may submit a counter notification in order to reinstate their Napster accounts.

Napster took extraordinary steps to comply with Metallica's demands to block hundreds of thousands of its fans from its system. Metallica online fans were simply screwed by the band. Rapper Dr. Dre stepped in line to do the same, filing a multimillion-dollar suit against the company last week.

Pro Napster Artists Exist in Sharp Contrast to Industry Hardliners
However, not all-recording artists are anti-Napster or anti-Internet. Band members of Offspring recently spoke out in support of the MP3, while Limp Bizkit announced that it would embark upon a completely free tour sponsored by the software maker.

Bands like Offspring, Limp Bizkit and David Bowie recognize the Internet's ability to bring fans together through their music. These bands have online endeavors that enable them to reach more of their fans in an up-close and personal manner. It's good business practice and it sells records.

Meanwhile, recording industry hardliners and puppet-like recording artists are standing behind intellectual property laws because they lack the imagination to distribute their product over the Internet. Companies like mp3.com and Napster have proven the possibilities of new technology.

It's business as usual for the RIAA, and they're litigating to combat and control technology they should have embraced. BMI's deal with mp3.com is a step in the right direction, and powerhouse EMI Recorded Music and others will soon follow.

When the music industry realizes that mp3.com and Napster are good for business, it will cease litigation and commence cooperation with the powerful portals redefining the music scene.

Times Are Changing
Music distribution is changing. Just as Independent Software Vendors (ISVs) are recognizing the power of Application Service Providers (ASPs) to distribute their products, so too recording companies and the RIAA are learning that the Internet can reduce the cost of music distribution, sell more music, and make more money for all parties concerned.

The RIAA claims that Napster promotes music piracy on the Internet and that mp3.com is the devil in disguise. RIAA reports Napster causes monetary damages of between $500 and $100,000 per recording.

Record companies and the RIAA should learn the hard lesson now, before companies like mp3.com figure out how to set up their own labels and negotiate directly with recording artists. Perhaps mp3.com's first Napster promoted release could be a new version of Dire Straight's "Money For Nothing" complete with Sting's echoing chorus transformed into "I want my MP3."

I can almost here it now, "That's the way you do it, money for nothing? Let me tell you them guys ain't dumb."

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