In this case, the Supreme Court determined that Sony's Betamax VCR player was not liable for contributory infringement. The court used the fact that the technology had significant non-infringing uses since a number of television broadcasters did not mind having their programs recorded. The court also found that Universal did not effectively find that time-shifting caused significant to the potential market for its television programs. The court decided that even though the device was capable of contributory infringement, the mere possibility did not warrant a guilty ruling.
I would like to use this case as the basis for the battle between the interests of technological innovation and copyright protection. This case is significant to my argument because many subsequent proprietors of distribution technologies, such as Napster, claimed similar defenses to infringement as Sony, although in the case of peer to peer file sharing, courts ruled differently. The case also leads to the development of the uncertainty I wish to document and use for my argument that the current state of digital media copyright is unsustainable. It also demonstrates that despite the potential loss of market capitalizing ability, distribution technologies are, sometimes, allowed to be used by the public and future rulings will, perhaps, follow the progress of this case, rather than Napster, Grokster and others as file sharing technologies are recognized as legitimate and useful systems of media distribution.
In this case, the Ninth Circuit Court of Appeals ruled that Napster committed repeated copyright infringements. The ruling was based on the premise that infringement required two categories to be satisfied: (1) Napster must show ownership of the allegedly infringed material (2) A&M must demonstrate that Napster violates at least one exclusive right granted to the copyright holder. The court found that the plaintiffs sufficiently demonstrated ownership since calculations determined that as much as 87% of the files on Napster may be copyrighted and more than 70% owned or administered by the plaintiffs. Further evidence demonstrated that a majority of Napster users used the system to download copyrighted music. The court also determined that Napster users infringed upon at least two of copyright holders exclusive rights: (1) right of reproduction (2) right of distribution. Napster claimed its own infringement to be protected by fair use, including sampling, space shifting and permissive distribution of recordings by new and established artists. This led the court to consider the four fair use factors. It found that the purpose of the use to be commercial, thus not warranting protection and the character not to be transformative since the works were merely transmitted in a different medium (MP3 format). Since the nature of the works was artistic, the second factor did not protect Napster's uses and the entirety of each work was transferred each time a user uploaded or downloaded a song. As to the effects on the market, the court found that Napster harms the market in at least two ways: (1) reduces audio CD sales among college students (2) raises barriers to plaintiff's entry into the market for digital music downloading. The court also found Napster guilty of contributory infringement since it had "sufficient knowledge" of infringing uses of its service. Napster was found to have materially contributed to infringing uses since users would not have been capable of accessing unauthorized song files without its service. The court also found Napster guilty of vicarious infringement, since it had the "right and ability" to supervise content and derived financial benefit from infringement. Napster attempted to defend itself by claiming coverage by the Audio Home Recording Act, which protects the use of digital audio recording equipment for non-commercial uses but the court dismissed this argument because the primary function of a computer is not digital audio recording. Napster's final defense was under the Digital Millennium Copyright Act's provision for a "safe harbor" for "online service providers" who provide access to digital networks upon which users may engage in infringement. The court left this issue unresolved and never answered the question as to whether Napster could be considered a service provider.
I plan to use this case as the most decisive example in which the recording industry has confronted peer to peer file sharing systems. This case built the framework upon which contributory liability was used to bring proprietors of other similar systems to court. The void created in Napster's absence is also responsible for many of the technologies that have emerged in more recent history that are responsible for illegal online file sharing.
The US Supreme Court unanimously overturned the Ninth Circuit Court of Appeals ruling in Grokster v. MGM, which tested whether companies running file sharing services could be held indirectly liable for copyright infringement. The court found that Grokster encouraged infringement and marketed itself as a Napster alternative. The court considered evidence supplied by MGM statisticians that 90% of works exchanged on Grokster were infringements. The court ruled against Grokster, but refused to overturn its Sony v. Universal City Studios ruling that a distributor of a technology cannot be held liable for user infringement as long as the device is capable of "significant non-infringing use." This suit was also brought against the makers of Morpheus and KazaA software and found them to also be guilty of copyright infringement. The court used its ruling to devise a new framework for dealing with peer to peer file sharing programs that relies on "inducement" of users to infringe copyright.
The inducement rule set forth by the Supreme Court has become a great source of uncertainty in digital music copyright. The court has left open the degree to which peer to peer file sharing services should police their networks and what other measures should be taken to prevent infringement. This ruling has left room for innovators to produce new technologies (many currently exist) that are capable of evading copyright infringement action.
In this case UMG Recordings sued MP3.com for copyright infringement. UMG accused MP3.com of copying recordings onto computer servers and replaying recordings to subscribers. The defendant argued that the infringement with which it was charged is protected by fair use. MP3.com asserted that although its use was primarily commercial (it planned to expand user-base in order to profit from future advertising revenues), the music had been transformed, into MP3 format. The court ruled, however, that the works had not been transformed, but rather repackaged into a new digital format. With respect to the second factor, which deals with the nature of the work, fair use was unlikely to be a good argument since songs are creative works, most likely to be granted copyright protection and least likely to have infringement protected by fair use. The third factor regarding the portion of the work used also did not support the defendants since the whole of each song had been uploaded and copied by its software. With the fourth factor, defendants argued that the market for online downloads of digital music has not been developed, nor has there been evidence of development. It further bolstered its defense by indicating that subscribers were required to have purchased CDs in order to use the software although the court was not persuaded. The defendants tried one, final strategy: claiming that without its service, its subscribers would have to resort to illicit forms of file sharing to store digital music over the internet. The court again ruled against the defendant on the premise that the plaintiff claimed it would have agreed to license its content to a service such as MP3.com in exchange for royalties but wanted to secure the rights to distribute and reproduce copyrighted works. The court found in favor of the plaintiff, UMG records.
I plan to use this case as an example of the judiciary's response to a fair use defense of copyright infringement by a proprietor of peer to peer file sharing technology. MP3.com's technology and business model falls within the scope of Napster, Aimster and others sued by the recording industry and I would like to contrast existing file sharing technologies that have this far evaded law suits with this one.
This article considers the implications of the Supreme Court's Grokster II ruling, which considered four internet file sharing technologies that were previously found by district courts to have been liable for copyright infringement. The technologies considered are Napster, Grokster, Morpheus and Aimster. The article outlines a Grokster II test used to identify infringing file sharing programs. The test relies heavily on whether the producer of the technology advertised intent to distribute copyrighted material. The four factors used to determine liability outlined by the author are whether: (1) defendants made express statements of intent to induce copyright infringement, (2) defendants advertised that they intended to replace a known source of infringement, (3) defendant attempted to filter or reduce infringing use and (4) defendants' business models used as evidence bolstering defendants unlawful intent. The author points to the fact that these factors, while universal in their use in determining the liability in the four aforementioned technologies, were used to produce inconsistent judgments regarding contributory infringement by the producers of the respective technologies. The concept of unpredictability in digital media copyright law stems from these inconsistencies in Grokster II.
The piece of this article that will be most useful for my paper is the section that follows where the author tests the four factors from Grokster II on three new technologies. The technologies discussed here include TiVo ToGo, MyTunes Redux and Limewire. Each technology produces ambiguous judgments using this four factor test since TiVo ToGo can not be assumed to have an underlying infringing use, and MyTunes Redux and Limewire do not operate for profit and it is also ambiguous whether any of these products advertisements can be shown to induce users to infringe copyright. This will serve as evidence in my paper that the current system by which courts evaluate potential copyright infringers is not effective for many technologies currently available that bear striking similarities upon which action has been taken. I suspect that in the future many new technologies will arise whose purpose is, in fact, to replace those that have been shut down by the recording industry-precisely one of the reasons Grokster, itself was found guilty. These developments suggest, as does evidence in my other sources, that the recording industry and the courts will have to work more closely with users of peer to peer file sharing networks and internet service providers to either devise new methods of preventing illegal file sharing or establish a new system by which digital music is made available.
In this article the author argues that the current system of digital media artist compensation by means of copyright protection is in the process of a "creative destruction" instigated by the internet and its users. "Creative destruction" is described as the process by which economic structures evolve via the destruction of old systems and the simultaneous rise of new ones. He points to the current "digital dilemma," the availability of mass copying and distribution of copyright protected digital media through the internet, as the catalyst for the "creative destruction of copyright and proposes several solutions. Some scholars have suggested a "pay-per-use" scheme to compensate artists for works distributed over the internet. Critics, however, insist that this scheme is not optimal since it would inhibit some fair uses of copyrighted works. The argument, in the author's opinion, boils down to a conflict between artist compensation and social welfare. He therefore proposes that in the face of the "digital dilemma" it is best to abolish the current copyright regime since there are currently drastic differences in the sources of revenue for artists and distributors of digital works and, while it is in society's interest to provide artists incentives to produce, it is also in the public's interest to reduce costs associated with distribution of digital works.
This article also discusses proponents of the copyright system that support expanding its reach throughout the internet and opponents who fear it because of potential limitations to fair use. It also delves into two cases regarding the internet and digital media copyright: the Napster and MP3.com cases. With respect to the fair use doctrine, it is clear that sharing of music over these networks did not constitute fair uses because it encroached on the market for digital music and deprived artists of potential revenues. The author continues to argue, however, that in the face of the internet, copyright has become irrelevant. The internet eliminates the free rider dilemma of digital music reproduction and distribution because users internalizes distribution costs by purchasing the hardware and software required to access the internet and the recording industry should collect royalties from the sales of these products. Digital media distribution via the internet the recording industry can also eliminate nearly all costs associated with distribution. An even more radical opinion considered is that there is no longer any need for copyright to protect the reproduction and distribution of digital media since there are drastic asymmetries in the revenue structures of artists and distributors. The article shows that artists derive very little revenue from the actual distribution of their works and that even if distribution revenues were eliminated, there could still be sufficient financial incentives for them to produce works.
I would like to use this as background evidence in my paper to show some sources of uncertainty in digital media copyright and potential new avenues that lawmakers and the courts could take. I would like to take into account the recent ways in which the recording industry has dealt with unlicensed online file sharing, namely by filing lawsuits and shutting down services providing free downloads or imposing licensing fees. I would also like to use the opinions regarding the current revenue structure of the music industry with respect to artists as support for the need to a new copyright system in the future.
In this article published by Businessweek the decision of the four largest record labels to provide unrestricted, DRM-free, MP3s is covered. The article traces the instigation for this move to the decision of long-time DRM proponent, Michael Nash, who served as the head of Warner Music Group, to explore alternate strategies for digital music distribution. In January of 2008 the four largest record labels agreed to sell DRM-free MP3s on Amazon.com and following Nash's lead, Sony BMG, EMI and Universal along with Warner Music Group signed a deal to have music distributed by MySpace. These decisions came after a long series of debates that concluded with a majority of recording executives agreeing that DRM, while intended to prevent piracy, ended up frustrating consumers and endowing Apple with "Wal-Mart-like power" over the digital music distribution market due to its seamless operation with the iPod. The article concludes by demonstrating that this move away from DRM can, in fact, be profitable. The MySpace venture promises to open new streams of revenue for the four recording giants via advertising on artists' pages and digital download and merchandise sales.
I intend to use this article in my paper to demonstrate the steps currently being taken by the recording industry to confront the "digital dilemma" facing digital music copyright. I will try to use evidence such as that provided here to identify a potential trend in digital music copyright despite the current state of uncertainty. This trend appears to fit into the theme, also represented in other articles, of the growing influence of consumers in the evolution of copyright. It points to the fact that the endpoint of the evolution of digital music copyright is likely to include provisions that focus less on penalties and detection of infringement and try to work within a framework that accepts the existence and demand for free or cheap available digital online music.
This article deals with copyright legislation and jurisprudence in terms of the various forms and degrees of control apportioned to copyright owners and producers and distributors of technologies used to disseminate copyrighted works. It analyzes the rulings of several court cases tracing the evolution of current copyright practices regarding distribution technologies beginning with the Betamax case and ending with Napster. The author describes each case in terms of a struggle for control over the distribution of works of authorship between copyright owners and producers of technologies of dissemination. She concedes that the trend in digital media copyright protection has been to grant copyright owners control over new distribution outlets because unauthorized distribution often results in the producers of the dissemination technology profiting from the exploitation of a new market to which the copyright holder is entitled. She acknowledges, however, that it is not socially optimal for copyright owners to retain complete control over the technologies of dissemination because their first instinct in litigation is to prevent the use of the new technology. Therefore, with most technologies of dissemination of copyright protected works, courts allow the sale of new technologies because it is in the interest of society and of economic value for new markets for the dissemination of works of authorship to be created, but they require the proprietors of such technologies to obtain licenses from copyright owners to distribute copyrighted works.
Since my paper deals with digital media copyright regarding peer to peer file sharing networks I am most interested in the author's analysis of internet technologies. The author explains that the battle between digital media copyright owners (primarily record companies) and producers and distributors of new technologies that disseminate works of authorship on digital networks has led congress to anticipate new forms of exploitation and grant more control to owners of copyrights to facilitate the use of digital networks. She adds, however, that there are many academics who believe that despite any policing efforts by congress and the courts, new technologies will constantly arise to take the place of those that submit to copyright compliance. Further complicating the matter, she introduces a set of "self-styled copyright anarchists" who are determined to continue illicit file sharing activities that evade protective measures supported by copyright legislation. Finally, she considers plans proposed by German and Canadian legislators to impose a surcharge on internet service costs to compensate copyright owners for the inevitable dissemination of their works over the internet. She concedes, however, that this is likely unfeasible since such a surcharge would have to be negotiated among all recording studios and would probably be prohibitively expensive.
I found this article very interesting because it suggests a solution to the uncertainty of digital media copyright to which potential users appear receptive. My sources provide evidence that the bargaining power of users, by means of emerging illegal modes of file sharing that are progressively more difficult for the recording industry to engage in court, is on the rise. Other sources have pointed to the idea that an alternate system for file sharing is necessary. I plan to suggest this theory of revenue sharing as a potential means to stabilize the current state of digital music distribution, reproduction and exchange.
This article considers the implications and potential pitfalls of the U.K. government's decision to set an April, 2009 deadline for internet service providers to take action to prevent illegal file sharing on their networks. The author first examines forms of illegal file sharing that will remain outside of the scope of this action, which he calls "non-network file sharing. Non-network file sharing includes CD burning, iPod swapping, sending songs by email or instant message, and digital content delivery systems. These forms of file sharing are extremely hard to track because of secrecy laws protecting personal communications. The article also introduces the emerging phenomenon of music blogs where users post songs that they like, and sometimes entire albums, to online blogs. Many blog sites, such as Google, protect users by demanding written communication from any authority alleging copyright infringement and threatening that anyone who complains will be liable for damages if they misrepresent an activity as infringing copyright. The author also considers some positive developments within the government and the recording industry. He proposes that the government's decision to require surveillance of digital networks for illegal file sharing will bring about more cooperation among internet service providers and the recording industry. He also points to Nokia's "Comes With Music" program where a purchase of a Nokia handset includes the cost of licenses to download any song from Universal's online database for one year. He also considers the concept of "ad supported music" services where websites could theoretically provide songs to users for free and generate sufficient revenues to cover licensing fees and other expenses from advertisements. This form of music dissemination is currently immature and no single website is popular enough to generate sufficient revenues to support free downloads although the author suggests that once mature, this could be a good model for music exchange.
In my paper I am arguing that the current system by which courts attempt to curb digital music copyright infringement is becoming obsolete and evidence from this article supports this idea in the sense that there despite efforts by internet service providers to curb infringement, there are still outlets for file sharers to engage in infringing activity. I would also like to use evidence from this article that suggests alternate market structures to capitalize on the digital exchange of music over the internet.
tagged dealing_with_the_evolution_of_online_music_file_sharing by mperelis ...on 24-NOV-08