Legal Issues of the 21st Century
Legal Research for: Technological Protection of Intellectual Property
Copyright and Digital Music Files
1. Background on the MP3 controversy
Individuals with a personal computer, known as users, and had access to the Internet engaged in sharing digital copies of recordings for other users to download and, in turn, share with other users, known as file-sharing. File-sharing technology via music files, better known as MP3’s, Moving Picture Experts Group 1 Audio Layer 3, allows users to copy an original recording from a compact disc with minimal loss of sound quality regardless of the number of copies made from the original or from a digital copy. MP3 facilitated the swapping over the Internet because of the compressed format of the file, compressing music files at a 12-to-1 ratio, while WAV files are relatively larger than MP3 files because it is an uncompressed format. Consequently, because of its compressed size, MP3’s allows users to send and receive the digital audio files between computers through email or quickly download files through the Internet. MP3 swapping became an eye-raising phenomenon with the dawn of Napster in 1999. Prior to the start of Napster there were similar type of P2P network software, such as Scour.net in 1997, which operated under a centralized server through which users would download the software and search the available computer files for download. These companies had some control over the types of files on its system; however, they were both ultimately unsuccessful. Napster operated under similar technology of “a centralized communication architecture to identify the ‘.mp3’ file extension available for download”, through the file-sharing software the users would download to link available users to each other. The success of Napster where its predecessors failed was that Napster users could connect directly to one another via the Internet, rather than connect to a central server through which they would run a search of a specific music file and indirectly retrieve music files. However, after the injunction and the demise of Napster in July 2001, a slew of Napster alternatives, such as KaZaA, Morpheus, Grokster, and eDonkey, popped up on the Internet, providing a continued means for users to download songs without paying for them.
The new generation of file-sharing systems, also known as second-generation P2P networks, are decentralized file-sharing systems that facilitate the sharing and downloading of MP3’s without the necessity of a centralized server through which users’ computers link through. Unlike Napster, the current generation of P2P file sharing programs allows users to search music file libraries of other online users directly without the use of a web site because they now connect directly to one another from computer to computer. Individual users’ computers pass information from computer to computer, relaying file inquiries and responses in a decentralized P2P network. Once the file is located, the user downloads the file using the file-sharing software provided by the P2P networks, without requiring a central server to index file locations. The prime example of the new generation of P2P networks is Gnutella, which is an open source protocol for decentralized P2P. P2P networks like Gnutella do not have an official client software particular to that network. Closed decentralized P2P networks that do employ a file-sharing application allow businesses to bring their workers together by enabling the facility of transferring information among each other. Although businesses make use of P2P network technology to facilitate the exchange of information among its employees, these networks have the capability to facilitate the exchange of copyrighted files as well. This raises the issue of whether distributing copyrighted information among a small group of private users would constitute fair use under 17 U.S.C. 107.
Recently, with the proliferation of swapping and sharing of copyrighted music files among an unlimited number of non-private users the issue of fair use has been determined not to be a viable defense to copyright infringement, as in the case against Napster. Napster was held to have violated copyright laws because they did not own licenses to distribute, download, or to facilitate others in distributing or downloading any of the copyrighted music. Consequently, the plaintiffs in the A&M Records, Inc. case did not receive royalties or other forms of compensation when Napster users obtained a copy of the music file. The second-generation P2P networks, such as Grokster and KaZaA, which have replaced Napster, have been in litigation with the recording and entertainment industry based on the theory of vicarious infringement by facilitating the sharing of copyrighted material with their software. Prior to litigation, there was difficulty in shutting down second-generation P2P networks as KaZaA because it does not require a central server, and therefore no company to sue since the activity occurred on a peer-to-peer level. Another difficulty to sue these P2P networks is that the networks and its users are independent of each other so that if the networks were to close its doors and deactivate all the computers in their control, users of their software could continue sharing their files with little or no interruption. An example of the difficulty in holding P2P networks liable for copyright infringement is the decision in MGM Studios, Inc., where the District Court held that the defendants, Grokster, Streamcast, and KaZaA, were not infringing on copyrights directly, contributorily, or vicariously distinguishing these networks from Napster in that these networks are entirely outside the control of the defendants and the lack of evidence to indicate that the defendants have the ability to supervise and control the infringing conduct.
With the difficulty in holding P2P networks liable for copyright infringement, the recording and entertainment industries have turned their attention toward Internet Service Providers (ISP) and individual users. The RIAA has recently turned its attention in curbing copyright infringement by utilizing the provisions of the Digital Millennium Copyright Act toward the ISPs. In the Verizon Internet Services case, the RIAA was initially successful in serving a subpoena on Verizon to release the full identity of its customers who have been identified as copyright infringers under an anonymous online user name. The purpose of retrieving the full identity of the alleged copyright infringer was to then file individual lawsuits against the users as the RIAA carried out in September 2003 to stop the millions of users engaging in the same activity. The RIAA lawsuits against users have not gone uncontested in the same way ISPs have contested the use of subpoenas to reveal their customers identity. The Court of Appeals for the District of Columbia handed the recording industry a setback deciding in December 2003 that the district court vacate its order enforcing one subpoena an to grant the Verizon’s motion to quash another subpoena based on the fact that a subpoena under 17 U.S.C. 512 could be issued only to an ISP engaged in storing on its servers material that was infringing or the subject of infringing activity, and not as a mere conduit ISP.
2. Parties in Conflict
A. The RIAA vs. Consumers
The Recording Industry Association of America (RIAA) is the trade group that represents the U.S. recording industry. RIAA members create, manufacture and/or distribute approximately 90% of all legitimate sound recordings produced and sold in the United States. While there have been a few lawsuits that have gone to trial against consumer individuals, the threat of lawsuits with penalties ranging from $750 to $150,000 per music file found on the computer hard drive have brought consumers to settle with the RIAA in varying amounts. In fact, the RIAA has just filed another wave of lawsuits on January 21, 2004 in spite of their recent setback in December 2003, when their subpoena was vacated and another quashed.
B. The RIAA vs. File-Sharing Software Providers
Beginning notably with Napster, there have been plenty of lawsuits that have followed against similar file-sharing software providers, i.e. Morpheus and Grokster, Gnutella, and most recently, KaZaA. The method of sharing information over the Internet is through Peer-to-peer (P2P) network communication, allowing computer users with the same networking software to connect with each other and thereby facilitate access and sharing of music files. By facilitating the access and sharing of MP3’s, without having computer users to pay for the use of the copyright has brought the attention of the RIAA to bring lawsuits against these P2P software providers.
C. The RIAA vs. Internet Service Providers
In the past year, the RIAA has brought Internet Service Providers (ISP) like Verizon, Inc.  into court to force them to reveal the true identities of their customers who have been found to have infringed on music copyrights. In July 2003, PacBell Internet Services, another ISP, has taken a more vocal stance against the RIAA, opposing the subpoenas that are being served on ISPs to reveal their customers’ identity to help tackle the problem of copyright infringement over the Internet.
3. Copyright Infringement and the Digital Millennium Copyright Act
A. The Digital Millennium Copyright Act (DMCA)
Congress responded to the coming of the digital technology by passing the Digital Millennium Copyright Act in 1998. The DMCA served to prevent the use of circumvention technologies to access databases and other works in electronic formats. The DMCA provides liability limitations for transmitting online copyrighted material, and it provides criminal penalties for circumvention of copyright protection systems and for compromising the integrity of copyright management information. The DMCA includes a section that makes existing copyright law compatible with the Internet, titled “Limitations on Liability Relating to Material Online.” The purpose of extending copyright law to online material was to partly amend the Digital Performance Right in Sound Recording Act (1995) and to regulate the digital transmission of sound recordings through the Internet, where producers and performers did not have copyright protection for their artistic works. Ultimately, the DMCA was enacted to protect both the copyright holders from infringement via the Internet and the ISPs.
Section 512 of the DMCA enacted a limitation of liability for ISPs. The ISPs were concerned over the possibility of excessive liability as a result of the Netcom standard and lobbied Congress to adopt “safe harbors” for ISPs, which shelter qualifying ISPs from copyright liability when users of the service engage in infringing activities. To qualify for two of the safe harbors, the ISP must not have actual or constructive knowledge that the material or activity in question is infringing; and to qualify for three of the safe harbors, the ISP must immediately disable access to the infringing material before the alleged infringer is given notice and an opportunity to be heard.
The DMCA facilitates the obtaining of a subpoena under section 512(h) as a means to protect copyright holders from infringement by online users. Essentially, the subpoena allows copyright holders to obtain personal information on the infringing individuals by compelling the ISPs to release such information. However, the subpoena will be granted on the basis that he copyright holders have a “good-faith belief” that the copyrighted material is being infringed, and that the copyright holders provide the ISPs with adequate information to locate the copyrighted material.
D. User Infringement
The DMCA targets ISPs and their activity in relation to copyrighted material on the Internet. The DMCA delineates what is infringement and provides safe-harbor provisions to determine if ISPs are liable, or if there is question as to their liability, ways that ISPs can be free from liability. However, infringing conduct does not occur on the ISP level, who provide services and access to the Internet, but issues of infringement have been determined to be either contributory or vicarious. Infringing conduct takes place when users take advantage of the several means at their disposal: the Internet, ISP service, and file-sharing software and products, to obtain copyrighted material without paying for them.
The courts have determined that file-sharing technology itself is not infringing because of its potential for non-infringing uses, such as “sharing non-copyrighted works, or works considered to be within the public domain.” File-sharing may also constitute fair use such that transfer of a file through a P2P network for research or scholarly use purposes would not constitute infringement. However, there are potential infringing uses for file-sharing as well, such as making music files on the Internet available for download without paying for them would constitute infringement. In this regard fair use would not be a viable defense because the user receives a direct benefit, “profiting from the exploitation of the copyrighted material without paying the customary price.” Because of the safe-harbor provisions of the DMCA and the difficulty in holding ISPs liable for copyright infringement, the recording industry has chosen to push for more aggressive prosecution of individual infringers as a general deterrence strategy.
Users are the most likely targets for prosecution because they are most directly responsible for the infringing activity. However, the millions of users online simultaneously provide some difficulties in pursuing litigation against them sufficient to make a drastic impact on copyright infringement.
 See Verizon Internet Services, supra note 11 at 4.
 See Moving Picture Experts Group Homepage, available at http://www.cselt.it/mpeg (visited Jan. 17, 2004) (describes the nature and functions of MPEG).
 See Recording Industry Association of America v. Diamond Multimedia Systems, Inc., 180 F.3d 1072, 1074 (1999). [hereinafter Diamond Multimedia Systems, Inc.]
 MP3, available at http://www.webopedia.com/TERM/M/MP3.html.
 See Diamond Multimedia Systems, Inc., 180 F.3d at 1074.
 WAV, available at http://whatis.techtarget.com/definition/0,,sid9_gci213473,00.html.
 Kristine J. Hoffman, Fair Use or Fair Game? The Internet, MP3, and Copyright Law, 11 Alb. L.J. Sci & Tech. 153, 15 (2000).
 See Aaron M. Bailey, Comment: A Nation of Felons?: Napster, the Net Act, and the Criminal Prosecution of File-Sharing, 50 Am. U. L. Rev. 473, 479 (2000).
 Ines G. Gonzalez, BERKELEY TECHNOLOGY LAW JOURNAL ANNUAL REVIEW OF LAW AND TECHNOLOGY: I. INTELLECTUAL PROPERTY: A. COPYRIGHT: 4. Infringement: a) Audio Home Recording Act: Recording Industry Association of America, Inc. v. Diamond Multimedia Systems, Inc., 15 Berkeley Tech. L.J. 67, 70 (2000).
 See http://computer.howstuffworks.com/napster1.htm, for a brief description on how its founder, Shawn Fanning, came up with the idea for Napster, and the subsequent pages give a detailed description on how Napster worked.
 Scour.net, available at http://www.internetnews.com/bus-news/article.php/37661.
 See http://www.dailybruin.ucla.edu/db/issues/00/03.07/ae.mycaster.html, for a history of the development of Scour with the primary focus to search for multimedia files.
 Hisanari Harry Tanaka, Article: Post-Napster: Peer-To-Peer File Sharing Systems: Current And Future Issues On Secondary Liability Under Copyright Laws In The United States And Japan, 22 Loy. L.A. Ent. L. Rev. 37, 49 (2001) (describing the characteristics and differences between centralized and decentralized P2P file-sharing systems).
 See http://scour.sixpak.org/html1/about.phtml, for how Scour.net operates as a search engine for multimedia files on the Internet.
 Lou Dolinar, Napster Not Only Way to Swap a Song; Recording Firms Want Payment, Chi. Trib., Apr. 30, 2001, at Business 3, LEXIS, News.
 See Verizon Internet Services, Inc., supra note 11 at 4.
 Lisa M. Zepeda, I. Intellectual Property A. Copyright: 1. Digital Media: d) Digital Music Distribution: A&M Records, Inc. v. Napster, Inc., 17 Berkeley Tech. L.J. 71, 72 (2002).
 See Karen Heyman,, Pandora’s Box: Napster Unleashes Whole New Net Ballgame, available at http://www.laweekly.com/ink/00heyman.shtml (visited Jan. 17, 2004) (“The [Napster] software indexes he MP3s you’ve got on your hard drive, then connects to the Napster server and makes your tracks available to anybody who’s hooked up at the time – from your hard drive, not from the Napster server.”).
 Chris Sherman, NAPSTER: Copyright Killer or Distribution Hero?, Online, November 2000.
 A&M Records v. Napster, Inc., 239 F.3d 1004 (2001).
 See http://web.utk.edu/~smarcus/History.html, for a timeline of Napster.
 See Verizon Internet Services, Inc., supra note 11 at 4.
 See http://www.ugo.com/channels/music/features/napsteralternatives/, for a brief description and the pros and cons for several alternatives to Napster that have made its way onto the Internet to replace Napster.
 Tanaka, supra note 25, at 49.
 Sherman, supra note 31.
 See Verizon Internet Services, Inc., supra note 11.
 Tanaka, supra note 25, at 41.
 Sherman, supra note 31.
 See http://en2.wikipedia.org/wiki/Gnutella, for a history and description of Gnutella.
 See Damien A. Riehl, Electronic Commerce in the 21st Century: Article Peer-to-Peer Distribution Systems: Will Napster, Gnutella, and Freenet Create a Copyrighted Nirvana or Gehenna?, 27 Wm. Mitchell L. Rev. 1761, 1776 (2001).
 See Ben Charney and John Borland, Is There Room on the Net for P2P?, CNET News.com (Feb. 13, 2001), available at http://news.com.com/2009-1023-252549.html.
 See 17 U.S.C. § 107 (2003). (“Notwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright.”).
 See A&M Records, Inc. v. Napster, Inc., 114 F. Supp. 2d 896, 912 (2000).
 See id. at 902-903.
 See MGM Studios, Inc. v. Grokster, Ltd., 259 F. Supp. 2d 1029 (2003).
 See Brad King, File-Trading Furor Heats Up, Wired.com, available at http://www.wired.com/news/politics/0,1283,4120,00.html (July 25, 2002).
 See Bailey, supra note 20.
 See MGM Studios, Inc. 259 F. Supp. 2d at 1041.
 Id. at 1045.
 See Recording Industry Association of America v. Verizon Internet Services, 240 F. Supp. 2d 24 (2003).
 See supra note 4.
 See John Borland, CNET News.com, available at http://news.com.com/2100-1025_3-5066754.html?tag=st_rn. (“The RIAA has used court orders to try to identify more than 1,000 computer users it alleges have been offering copyrighted songs on file-trading networks. It plans to use the information gained to file copyright lawsuits against the individuals.”).
 See supra note 2. (“It is simply to get peer-to-peer users to stop offering music that does not belong to them.”)
 See supra note 53. (“The legal motion, filed in Washington, D.C., federal court by a ‘Jane Doe’ Internet service subscriber, is the first from an individual whose in recent months.”).
 See Verizon Internet Services, Inc., supra note 11 at 18-19.
 See http://www.riaa.com/about/default.asp, for a brief description about RIAA and their mission statement to protect music copyright.
 See Ashbel S. Green, Net Piracy Law Gets First Conviction: UO Student, Portland Oregonian, Aug. 21, 1999, at A1; Bill Miller, Giveaways Costly for Web Pirate, Washington Post, Dec. 23, 1999, at B1; Scott Craven, "Phantom Menace" Case May Test Laws, Ariz. Republic, Sept. 22, 2000, at B1.
 See supra note 4.
 See John Borland, RIAA Sues Campus File-Swappers, CNET News.com, April 3, 2003, available at http://news.com.com/2100-1027-999332.html?tag=nl, for an article detailing settlements for online piracy of four college students with the RIAA from lawsuits in May 2003.
 See David McGuire, RIAA Sues Song-Swapping Suspects, WashingtonPost.com, Jan. 21, 2004, available at http://story.news.yahoo.com/news?tmpl=story&u=/washpost/20040121/tc_washpost/a35281_2004jan21 (“The recording industry today reignited its legal campaign against online piracy, filing four lawsuits that target 532 people accused of illegally swapping copyrighted music on the Internet. The Recording Industry Association of America’s (RIAA) legal salvo is the first since a federal appeals court ruling last month restricted the group's ability to track down the identities of suspected file sharers. Three of the lawsuits were filed in federal court in New York City, while the fourth was filed in the Washington, D.C., federal court. ‘The message to illegal file sharers should be as clear as ever we can and will continue to file lawsuits,’ said RIAA President Cary Sherman in a telephone conference with reporters today. The lawsuits were filed after a three-judge panel on the U.S. Court of Appeals for the D.C. Circuit ruled on Dec. 19 that the 1998 Digital Millennium Copyright Act does not grant the RIAA special subpoena power to obtain the names of several Verizon Internet customers believed to be trading files online.”).
 A&M Records v. Napster, Inc., 239 F.3d 1004 (2001).
 MGM Studios, Inc. 259 F. Supp. 2d 1029.
 Id. at 1080.
 Id. at 1081.
 Matthew Amedeo, Comment: Shifting the Burden: the Unconstitutionality of Section 512(h) of the Digital Millennium Copyright Act and Its Impact on Internet Service Providers, 11 CommLaw Conspectus 311, 311 (2003).
 MGM Studios, Inc., 259 F. Supp. 2d at 312.
 Recording Industry Association of America v. Verizon Internet Services, 240 F. Supp. 2d 24 (2003).
 See Associated Press, One ISP Refuses to Yield, Wired.com, July 31, 2003, available at http://www.wired.com/news/business/0,1367,59844,00.html (“SBC Communications has joined a battle with the recording industry in a lawsuit that questions the constitutionality of the industry’s effort to track online music swappers. In a complaint filed Wednesday in a U.S. district court , SBC unit Pacific Bell Internet Services alleges that many of the subpoenas served against it by the Recording Industry Association of America were done so improperly.”).
 17 U.S.C. § 512 (2003).
 See Pamela Samuelson, Symposium, Intellectual Property and the Digital Economy: Why the Anti-Circumvention Regulations Need to be Revised,
 17 U.S.C. § 512 (2003).
 17 U.S.C. § 1204 (2003).
 17 U.S.C. § 1201 (2003).
 17 U.S.C. § 1202 (2003).
 17 U.S.C. § 512 (2003).
 See Digital Performance Right in Sound Recording Act, available at, http://www.copyright.gov/legislation/pl104-39.html, for the actual text of the act; see also Recording Artists’ Coalition website, available at, http://www.recordingartistscoalition.com/issues.html, for an explanation of why the DPRSRA does not help artists (visited Jan. 18, 2004).
 See The Digital Millennium Copyright Act of 1998, U.S. Copyright Office Summary 16 (Dec. 1998) (visited Jan. 17, 2004), available at, (stating that the DMCA was necessary to expand copyright protection to producers and performers because of the increase in transmission of digital sound recordings in recent years).
 See 17 U.S.C. § 512(a)-(d) (2003).
 17 U.S.C. § 512 (The DMCA provides four non-exclusive safe harbors for qualifying ISPs. Each provision addresses a different ISP function: (a) Transitory digital network communications: Provides protection for an ISP “transmitting, routing, or providing connections for, material through a system or network controlled or operated by or for the service provider . . .”; (b) System Caching: Limits the liability of a an ISP for caching, defined as the “temporary storage of material on a system or network”; (c) User storage: Protects an ISP who stores, at the direction of a user, material on a system controlled or operated by the ISP; (d) Information location tools: Protects an ISP for referring or linking users to an on-line location containing infringing material or activity).
 See generally Jonathan A. Friedman & Francis M. Buono, Using the Digital Millennium Copyright Act to Limit Potential Copyright Liability Online, 6 Rich. J.L. & Tech. 18, (Winter 1999-2000), available at, .
 (c)(1)(ii) and (d)(1)(B) (2003).
 17 U.S.C. § 512(b)(2)(E), (c)(1)(C), (c)(3), (d)(3), (g) (2003).
 17 U.S.C. § 512(h) (2003).
 17 U.S.C. § 512(h)(3) (2003).
 17 U.S.C. § 512(c)(3)(A)(v) (2003).
 17 U.S.C. § 512(c)(3)(A) (2003).
 See generally 17 U.S.C. § 512 (2003).
 17 U.S.C. § 512(a)-(d) (2003).
 See A&M Records, Inc. v. Napster, Inc., 114 F. Supp. 2d 896, 918 (2000).
 See A&M Records, Inc., 239 F.3d at 1022.
 See id. at 1021.
 Bailey, supra note 20 at 506.
 See 17 U.S.C. 107 (2003).
 See 17 U.S.C. § 107 (2003) (“Reproduction in copies or phonorecords … for purposes such as… scholarship, research, is not an infringement of copyright.”).
 See United States v. LaMacchia, 871 F. Supp. 535, 545 (1994).
 See Harper & Row, Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 562 (1985).
 See Karen Bernstein, The No Electronic Theft Act: The Music Industry’s New Instrument in the Fight Against Internet Piracy, 7 UCLA Ent. L. Rev. 325, 325-26 (2000).
 See A&M Records, Inc., 114 F. Supp. 2d at 911.
 See Martin F. Halstead, Comment: The Regulated Become the Regulators – Problems and Pitfalls in the new World of Digital Copyright Legislation, 38 Tulsa L.Rev. 195, 221 (2002).