Taps for Napster?

By ADAM COHEN

The issues that will be slugged out in federal district court in San Francisco this week sound a little too pop culture to be all that serious. How many music CDs are students buying these days in a record store outside the Syracuse University campus? How do Chuck D and Courtney Love want to see their music distributed? What does Metallica think about fans' making bootleg recordings of its concerts?

But don't be fooled. This legal face-off between the music industry and Napster may turn out to be one of the great trials of the digital age. Earlier this year the Microsoft antitrust case spelled out the rules for how high-tech companies can and can't compete with one another. The Napster case may make an equally bold statement about what intellectual property rights will exist in the new economy. If the ruling goes the industry's way, as many expect, it could bring an end to the brief era in which all sorts of music were readily available for free download on the Internet. It could, conceivably, mean the end of Napster.

Napster is, of course, the wildly popular file-sharing service whose 20 million users have downloaded some half a billion songs--most of them copyrighted, all of them free. To the music-industry plaintiffs in this week's suit--including Warner Records, which, like this magazine, is a unit of Time Warner--services like Napster are simply high-tech piracy. The industry is worried that in the future, only a few CDs will be sold; everyone else will download from the Net. In this suit, the Recording Industry Association of America and 18 record labels are asking Judge Marilyn Hall Patel to hold that Napster has engaged in music piracy. And order it to desist. And assess damages of up to $100,000 per downloaded song.

Napster, which was developed by 19-year-old Shawn Fanning in 1999, lost a key early ruling in the case. It had tried to argue that it was a "mere conduit" for the songs exchanged over it. Just as a phone company is not liable for a threatening phone call made on its lines, Napster argued that it shouldn't be responsible for piracy its users engaged in. But Judge Patel rejected that claim. Napster responded with a bold move of its own. It hired star litigator David Boies--fresh from his victory in the Microsoft antitrust case--to represent it.

Boies, not surprisingly, thinks Napster can and should win the case. He begins on an almost philosophical note: he complains that the entertainment industry has a knee-jerk instinct to try to stand in the way of technological progress. It's something the music industry has been accused of since 1908, when it went to the Supreme Court to argue, unsuccessfully, that its copyrights were being violated by player-piano rolls. More recently, in 1984, the movie studios went to the high court in an unsuccessful attempt to block Sony from selling VCRs. There's a pattern here, Napster's defenders say: copyright holders have always resisted new technology and then--as with the movie studios and videotapes--they end up making even more money as a result of it.

As for the law, Boies starts by saying copyright does not apply to noncommercial uses like Napster. The service is free, and users don't charge one another for the music. So, he argues, it isn't piracy at all. He also notes that in the VCR case, the Supreme Court endorsed the idea of "fair use"--that if a product could be used for a legal purpose (like taping TV shows to be watched at a more convenient time), the product itself was legal. Boies says Napster also relies on fair use. In addition to copyrighted songs, it offers files from 17,000 artists who have authorized their music to be downloaded free.

The record companies respond that Napster is used overwhelmingly "to engage in music piracy, and very little else." The industry cites an internal Napster document embracing the goals of bringing about "the death of the CD" and making record stores obsolete. And it has produced a survey--whose findings are challenged by Napster--in which 22% of Napster users said they don't buy CDs anymore or buy fewer. "It doesn't require rocket science to say you are going to have a very hard time selling something if someone is giving it away," says Cary Sherman, general counsel of the Recording Industry Association of America.

Large companies aren't always good at tugging on the public's heartstrings. But artists like Hootie & the Blowfish and Alanis Morissette have joined the anti-Napster chorus. In a full-page ad that ran in newspapers nationwide, more than 60 musical groups urged that "when our music is available online our rights should be respected." Metallica and rapster Dr. Dre have filed their own lawsuits against Napster. It's not unanimous, though: Limp Bizkit, for one, is pro-Napster--and Napster is sponsoring the group's current tour.

Many legal experts are calling Napster the underdog in this week's legal face-off. In addition to Judge Patel's initial ruling in the case, the music industry was heartened by a New York federal court decision in April that MP3.com another music-sharing service, had violated music copyrights. MP3.com ended up settling with some of the record companies suing it, agreeing to pay some $100 million and to hand over licensing fees in the future. But even if the record companies defeat Napster, that will not solve the problem they created when they digitized music in the first place, making copying so easy to do. "If they were to shut it down in America, it would move to Canada or somewhere else," says Boies. "There's a reason they call it the World Wide Web--it's literally worldwide." At the same time, newer, more decentralized file-sharing systems like Gnutella and Freenet, which have no central authority in charge, are emerging. When people use those services to exchange pirated music, it will be hard to find anyone to sue.

Which is why, even as record companies and individual artists pursue their cause in courtrooms across the country, the industry is working harder than ever to develop new encryption methods like SDMI, which uses digital "watermarks" to prevent unauthorized copying. In combatting the threat posed by new technology, the music industry may find that it's not law, but technology, that saves it.