Law 619 | Electronic Commerce

T H E U N I V E R S I T Y O F P E N N S Y L V A N I A L A W S C H O O L

E L E C T R O N I C C O M M E R C E : V E R S I O N 2.0

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NOTICES:	Congratulations to the Fall 2001 class for an excellent semester. eCommerce will return next year.

R E A D I N G S

It may well be that Congress will take a fresh look at this new technology,
just as it so often has examined other innovations in the past.
But it is not our job to apply laws that have not yet been written.

-- Sony v Universal Studios, 464 U.S. 417, 456 (1984).

Are the current disputes over digital music challenging courts to "apply laws that have not yet been written," or are the new technologies a minor complication for the evolution of Copyright Law?

In this section, we'll consider the struggle over the online distribution of digital music, by taking a close look at the legal claims in the Napster v. RIAA dispute. Our goals are twofold: (1) to determine whether the Napster service is subject to liability under the current Copyright Laws; and (2) to look at this dispute more broadly, as indicative of a larger struggle over property rights in eCommerce.

We start with the basics. Napster itself does not copy, store, transmit, or otherwise handle the copyrighted MP3 files. Thus, the RIAA's claim is that Napster is guilty of contributory and/or vicarious infringement as a result of its users' "file sharing" (copying, transmitting, etc.). Thus, the basic argument is much the same as that brought by Universal Studios in the Sony case.

We'll discuss the Napster case with an eye towards three interrelated issues:

1. The Scope of Fair Use Online

2. Technology v Law (round 1?)

3. The Implications of Napster

The Scope of Fair Use Online

The Sony case we studied in the introduction to copyright considered the issue of fair use in the context of changing technologies. The Napster case raises many of the same issues, albeit with respect to different technologies. In this section, consider whether the 9th Circuit correctly determined the scope of fair use in the online music context.

A & M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001). (pdf, 56 kb, edited)

Technology vs Law (Round 1?)

One issue that has arisen to prominence in the Napster case (and we've seen elsewhere in the course) is the often-difficult interface between technology and law -- a set of problems that are especially vexing for judges (who almost invariably are not technologists). We'll looks quickly at a few examples in this regard:

1. One of the issues in the Napster litigation was quite technological: how much control Napster had over what users were doing on the network. To this end, read the following study of Napster usage, and think about whether you agree that Napster's technological arguments were driven more by business than the technology.

Charles C. Mann, Experts Say Napster, Playing Dumb, Resists Possible Tech Cure for Copyright Infringement, Inside, October 18, 2000. (pdf, 24 kb)

2. Consider closely the instructions to the District Court that the 9th Circuit issued in the A & M Records case above. Given what you know about Napster's technology, what was the injunction supposed to look like? Was the 9th Circuit helpful in its 'clarification' of the injunction?

3. We like to think about technology as a sort of "fact" that is difficult to dispute. Yet perhaps the Napster case casts doubt on this idea. For example, consider the question of enforcement of the injunction: how does the nature of the technology play into these debates? Think about the incentives involved here -- does either side have an incentive to "stretch" the nature of the technology in its favor? What should the judge do? In the Napster case, the District Court judge assigned a technical expert to help her, which engendered a whole new set of disputes:

Napster, Emergency Motion, July 12, 2001. (pdf, 68 kb, edited)

If you were the 9th Circuit, would you stay the injunction? Or is Napster not doing enough to stop the infringement?

Taken together, what do you think these examples say about the relationship between law, technology, and the courts? Are you troubled?

The Effects of Napster

Step back a moment and consider what prompted the RIAA and its members to file suit, what the effects of the case are, and what is really at stake here. In doing so, consider what a record company does -- and whether (and how) that may or may not be threatened in the era of online music distribution. As you review the following items of recent news, consider whether you think the RIAA's plans have been fulfilled? Is copyright being used to protect the artists, or to maintain the structure of an industry? What will the music industry look like in 3-5 years?

Soundbyting, Top-10 Myths (about the RIAA) (2001).

Jim Hu, Net music in a post-Napster world, CNET News.com, July 23, 2001, 3:20 p.m. PT

John Borland, Napster reaches settlement with publishers, CNET News.com, September 24, 2001, 2:40 p.m. PT

Derek Caney, Universal to unveil CDs with anti-piracy software, Reuters, Tuesday September 25 10:07 PM ET

Reuters, MusicNet delivers platform to partners, September 26, 2001, 9:45 p.m. PT

Lawrence Lessig, Artful Dodges, The Industry Standard, Jun 11 2001 12:00 AM PDT.

Note that in week 10, we'll consider in detail the questions surrounding the larger implications of the Napster case.

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