The exciting development of MP3s has lead millions of people to upload8 or download9 MP3 files.  These digital files can be placed on and downloaded from the World Wide Web.  In addition to the smaller size of MP3 files the simultaneous increase in transfer rates has lead to an explosion of online MP3 trading.  Using a cable modem a 3.5-megabyte file can be downloaded in about one second.10  A 28.8-kpbs modem will take 16 minutes to download the same file.11  A third factor that has helped the explosion of MP3s is the rapid reduction in the cost of computer hard drive space.  The MP3 compression element was initially most important when individuals did not have large hard drives.  Today the compression factor is less of a concern with the declining price of hard drive space.12  The cost of storing a massive amount of MP3s has declined significantly.  These factors together have made it possible for individuals to have a considerable number of MP3 files on their individual computers.

In addition to downloading individuals can create their own MP3 files from music CDs. The two steps to make MP3s from compact discs are ripping13 and encoding14.15  First the tracks are copied from an audio CD to a computer's hard drive as WAV16 files.17  Then the WAV files are "encoded" into the much smaller MP3 files.18  Many programs make this possible such as AudioGrabber, MPEG Encoder Suite, Windac, MusicMatch and AudioCatalyst.19
There are dozens of MP3 players available, and many computers now come with one already pre-installed.20  Some of the most popular are Winamp21, MusicMatch Jukebox22, and the Windows Media Player23.24  There are also portable MP3 players, such as the Diamond Rio.25

 An individual can also use MP3 files to create CDs.  Music files can  "burned"26 onto a CD through the use of a CD burner27.28  This is done by decoding the MP3s into WAV files.29  This can be done with a program such as Winamp.30  Then the individual just has to "burn" the WAV files to the CD using the software that came with the CD burner.31  An individual that has a CD burner can literally make a CD that contains any group of songs that the individual has.

 MP3s have come into the picture and revolutionized the way that music is being exchanged today.  Along with the emergence of MP3 technology there has been an explosion of software programs and web-sites that have been created to facilitate the exchange of MP3s.  The best known of these programs is Napster.32  Napster is a file-sharing software program that allows people using the program to log-on to the Napster system and share MP3 files with other users who are logged-on to the system.33  It was estimated that in mid-March 2001 the number of users on the Napster system at any given time was 1.5 million people.34  Due to an early March 2001 court injunction ruling that has instituted filtering of copyrighted songs the number of users on the Napster system at any given time has dropped to 1.1 million people.35  Overall, there are currently 64 million registered Napster users.36 In addition to Napster there are many other software programs that facilitate the trading of MP3s.  Among those programs are Gnutella, Bearshare37, and Limewire38.  The main difference between these programs and Napster is that unlike Napster these programs do not go through a central server.39  Along with all the software programs that are available there are also many web-sites devoted to the distribution of MP3s.  Among these sites are MP3.com40 and Audiofind41.

 The emergence, availability, and flexibility of use of MP3s have caused the Recording Industry Association of America (RIAA)42 great concern.43  The primary charge against MP3 technology by the RIAA44 and music groups, such as Metallica45, is that many of the available MP3s on the World Wide Web violate the United States copyright laws.46  That being the primary charge it is important at this point to have a brief overview of the current U.S. copyright laws.

 It should first be noted that MP3 technology does not violate the U.S. copyright laws, but the problem arises because the technology does not contain any built-in security features that protect copyrighted content.47  As a result there are both MP3s available on the World Wide Web that comply with copyright law and also MP3s that violate the copyright laws.48  Many legal MP3s are coming from both emerging and established music groups that are hoping to increase their popularity and to eventually make money.49  It is claimed by the RIAA that the majority of MP3s being shared on Napster, and similar sharing programs, are violating copyright laws.50

 The basis of U.S. copyright law51 is from Article I, section 8, clause 8 of the Constitution which authorizes Congress to "promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries."52  At the heart of this clause the founders seems to saying there must be a balance struck between adequate protection as an incentive to creators of such works, and the necessity of society to have these works to progress as a society.53  The most recent attempt by Congress to balance these two interests came in the form of the Copyright Act of 1976, 17 U.S.C. § 101 et sequence.54  Because this is not a paper on general copyright law there will only be a brief overview of three sections of the copyright law.  Those sections are 102 (subject matter of copyright), 106 (exclusive rights in copyrighted works), and 107 (limitations to exclusive rights: fair use).

 Section 102 defines the subject matter of copyright in a list of eight categories.55  Category number seven is sound recordings.56  This is a category that includes MP3s.

 Section 106 lists the copyright owner's exclusive rights.57  Those rights include the right to reproduction, creation of derivative works, distribution and transfer of rights, performing the work in public, display of the work, and performance of the work through digital audio transmission.58  The RIAA in its lawsuit against Napster is claiming infringement of the right to reproduction and distribution of copyrighted sound recordings.59

 Section 107 states that notwithstanding the provisions of section 106, the "fair use" of a copyrighted work is not an infringement of copyright.60  Section 107 lists several factors that are to be considered in determining whether use of a copyright protected item is fair use.  Those factors are: purpose and character or the use, nature of the copyrighted work, amount and substantiality of the portion used in relation to the copyrighted work as a whole, and the effect of the use upon the potential market for the copyrighted work.61

 The two most relevant statutes are the Audio Home Recording Act of 199266 and the 1998 Digital Millennium Copyright Act67.  Four major cases are Sony Corporation v. Universal City Studios, Recording Industry v. Diamond Multimedia, the MP3.com cases, and Recording Industry Association of America v. Napster.

 Even though Sony Corporation v. Universal City Studios68 was decided before MP3 technology was even created it has been an important case in the current MP3 courtroom battles. The case concerned the Sony Betamax video tape recorder (VTRs69).70  Universal Studios owned the copyrights to many television programs that were broadcast on the public airwaves.71  Universal Studios claimed that members of the general public were using the Sony video tape recorders to record copyrighted broadcasts, as well as a large number of other broadcasts.72  Universal Studios sought money damages and an equitable accounting of Betamax profits from Sony, as well as an injunction against the manufacture and marketing of Betamax video tape recorders.73

 The case was hotly contested, and made its way all the way up to the United States Supreme Court.  The U.S. Supreme Court relied heavily on the findings of fact of the District Court.74  Some of the findings that the Court relied upon were the surveys that had been done by both parties.  In the Universal Studios survey it was found that 75.4% of VTR owners used their machines to record for time-shifting purposes half or most of the time.75  In a Sony survey it was shown that 96% of the Betamax owners had used the machine to record programs they otherwise would have missed.76  The Supreme Court also relied on the doctrine of fair use in coming to its decision.77

In a 5-4 decision the Court reached two conclusions relevant to the Napster controversy.  First, Sony demonstrated a significant likelihood that a substantial numbers of copyright holders who license their works for broadcast on free television would not object to having their broadcasts time-shifted by private viewers.78  Second, Universal Studios failed to demonstrate that time-shifting caused any harm to the potential market for its copyrighted works.79  The Court ruled that the Betamax was capable of substantial non-infringing uses, and therefore Sony's sale of such equipment to the general public did not constitute contributory infringement of Universal Studio's copyrights.80

Time-shifting is an important concept that came from this case, and that has been used in recent MP3 cases.  Time-shifting is the ability to tape a television program and watch it at a later time.81  The defendants in the MP3 cases, relying on Sony, argue by analogy that all they are facilitating is space-shifting.

 In 1992 Congress amended the copyright laws with the Audio Home Recording Act (AHRA).82  The AHRA83 was in direct response to concerns about serial copying.  Serial copying is the ability to reproduce a large number of almost perfect replications from a single copy of digital music.84  The stated goal in adopting the AHRA was to strike a balance between copyright holders and consumers.  The rights of consumers are protected by (1) allowing digital audio recording devices to be bought and sold with minimal government regulation, and (2) allowing consumers to make copies of the original recordings they have purchased for their own personal, noncommercial use.85  The rights of the copyright holders are protected by (1) creating a royalty fund to compensate them for anticipated copying, and (2) requiring that digital audio recording devices incorporate a serial copy management system in order to prevent consumers from using such devices to make serial copies.86

 What the Audio Home Recording Act does is restrict the use of digital audio recording devices.  The AHRA states that a digital audio recording device is a device which is designed or marketed for the primary purpose of, and that is capable of, making a digital audio copied recording for private use.87  Congress did not outlaw these digital audio recording devices because it would have gone against the copyright concept of fair use.88  Instead what Congress did in the AHRA to protect copyright owners was to require that all recording devices capable of making serial recording had to include a Serial Copy Management System.89  What a Serial Copy Management System does is prevent the illegal production of multiple generations of digital copies from a copyright protected original.90

 The AHRA also went further to protect copyright holders by mandating a royalty fund.  The AHRA mandates that anyone manufacturing (or importing) and distributing a digital audio recording device (or medium) shall pay a percentage of the transfer price of each unit into a statutorily established royalty fund91.92  The royalty rate is two percent93, but may not exceed eight dollars per unit94.95

 The major MP3 technology case that interpreted the Audio Home Recording Act was Recording Industry Association of America v. Diamond Multimedia Systems.96  Diamond Multimedia Systems is a leading manufacturer of computer products, specializing in products to improve multimedia, audio, graphics, video, and other communications uses of personal computers.97  Diamond created a device that is called the Rio PMP 300 (the "Rio").98  The Rio is a lightweight, hand-held device; capable of receiving, storing, and re-playing digital audio files stored on the hard drive of a personal computer.99  The major concept behind the Rio player is MP3 technology.

 The Recording Industry Association of America was trying to enjoin the manufacture and distribution of the Diamond Rio player.  The RIAA's main allegation against the Rio was that it did not meet the requirements for a digital audio recording device under the Audio Home Recording Act because it did not include a Serial Copyright Management System.100  The RIAA also claimed that Diamond owed royalties because it was a manufacturer and distributor of a digital audio recording device.101

 The main question for the court to decide was whether the Diamond Rio player fell under the authority of the AHRA.  The Court stated that for the AHRA to apply the Rio would have to fall under the AHRA definition of a digital audio recording device.102  The Court looked at the definition found in the AHRA, and concluded that for the Rio to be a digital audio recording device that it must be able to reproduce either directly or from a transmission a digital music recording.103  The Court then went on to make two important rulings.  First, the court said computers are not digital audio recording devices, and therefore computers do not have to comply with the SCMS requirement.104  The court then went on to rule that the Rio was not a digital audio recording device because it could only make copies from a computer hard drive.105

 In 1998, Congress once again addressed the issue of copyright law in a digital world when it adopted the Digital Millennium Copyright Act (DMCA).106  The DMCA sought to accomplish three primary purposes.  First, the DMCA implemented two important international treaties of the World Intellectual Property Organization (WIPO), which are the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty, that had been passed in Geneva, Switzerland in December of 1996.107  Second, the enactment of the DMCA updated the copyright law concerning the Internet.108  Third, the DMCA outlawed the manufacture of devices or software designed to circumvent protective security measures created for the Internet and other electronic media.109
 
 The Digital Millennium Copyright Act contains five titles.  The major titles that could effect MP3 technology are Titles I and II.  The major change that the DMCA made to copyright law is found in Title I, section 1201.  Section 1201 states that no person shall circumvent a technological measure that effectively controls access to a work protected under this title.110  The DMCA then goes on to say in section 1201(c)(1) that nothing in this section shall affect the rights, remedies, limitations, or defenses to copyright infringement, including fair use, under this title.111  This means that the affirmative defense of fair use is still available, and that DMCA does not directly effect the fair use defense.

 Another important part of the DMCA concerning Recording Industry Association of America v. Napster is found in Title II.  Title II limits copyright infringement liability for Internet service providers.  Section 512(a) states that a service provider shall not be liable for monetary relief, for injunctive or other equitable relief, for infringement of copyright by reason of the provider's transmitting, routing, or providing connections for, material through a system or network controlled or operated by or for the service provider.112  The section then goes on to lists the requirements that must be meet for an Internet service provider not to be held liable.113  This is an important part of the DMCA regarding MP3 technology because Napster has been relying on this section when arguing that it should not be held liable for copyright infringement because it is an Internet service provider.114

 One of the first cases that dealt with online distribution of MP3s was the MP3.com cases.  Although there have been several cases filed by different recording companies and music artists against MP3.com they all boil down to essentially the same arguments.  By covering one case in detail the basic arguments of each side can be seen.

 On January 12, 2000, MP3.com using MP3 technology introduced the My.MP3.com service, which it advertised as permitting subscribers to store, customize, and listen to the recordings contained on their CDs from any place where they have an Internet connection.115  To make this possible MP3.com purchased tens of thousands of CDs, and without authorization of the copyright holders, copied the CDs onto the MP3.com computer servers so that it would be able to replay the recordings for its subscribers.116  MP3.com then instituted a procedure by which a MP3.com subscriber had to either "prove" that the subscriber already owned the CD version of the recording by inserting his or her copy of the CD into his or her computer CD-ROM drive for a few seconds (the "Beam-it Service") or the subscriber had to purchase the CD from one of the MP3.com online retailers (the "Instant Listening Service").117

 Once MP3.com instituted this service, record companies and artists began filing copyright infringement claims against MP3.com.  MP3.com was successful in defending many claims filed by music artists because the court ruled that the artists had assigned their copyright rights to their record companies.118  MP3.com has not been as successful defending the claims of those record companies.  MP3.com has tried to use the affirmative defense of fair use, and the concept of space-shifting.  Space-shifting is the process of converting a CD the consumer already owns into MP3 format for use at a different location such as the home or office.119  The court has rejected both MP3.com's fair use and space-shifting arguments.120  The court has ruled that MP3.com has infringed on the protected copyrights of the record companies.121  In response to the court loses MP3.com has now started to enter into contracts with each individual record company for the right to that company's copyright protected songs.122

 I believe that the courts have gotten it wrong when it has come to the MP3.com record company cases.  There is no infringement of copyright by either MP3.com or the My.MP3.com subscriber.  Both MP3.com and the My.MP3.com subscriber have bought the copyright protected CD.  The only thing that is happening in this situation is space-shifting.  A consumer that has bought a CD should be able to listen to the music from that CD wherever the consumer wants to and in whatever medium may be desired.  All that MP3.com is doing is converting the music on the CD into MP3s instead of having each individual subscriber do it him or herself.  The My.MP3.com service should be allowed under the copyright laws because it is simply allowing the consumer fair use of a purchased CD.

  The most controversial and talked about case concerning online distribution of MP3s is Recording Industry Association of America v. Napster.123  Napster is a company that facilitates the online distribution of MP3s between its registered users through the use of Napster's servers.124  Napster allows individuals to download for free its MusicShare software.125  Once the individual installs the software the user is able to download MP3s from the computers of other online Napster users free of charge.126

 The RIAA filed a complaint against Napster alleging contributory and vicarious copyright infringement violations, and unfair competition.127  The basis of the RIAA argument is that the MP3 files that are shared between Napster users are copyrighted, and that the distribution of these MP3s is a violation of the copyright laws.  The RIAA has also sought a preliminary injunction to enjoin Napster from engaging in or assisting others in copying, downloading, uploading, transmitting, or distributing copyrighted music without the express permission of the rights owner.128  In opposition to this injunction Napster has claimed the affirmative defenses of fair use and space-shifting.  Napster has also claimed that its service, which facilitates the free downloading of MP3 files, has not injured the copyright holders.129

 The district court made several interesting findings.  The district court found that virtually all Napster users downloaded and uploaded copyrighted files and that the vast majority of music available on Napster is copyrighted.130  The court also discounted Napster's space-shifting argument when it found that space-shifting accounts for a minimal portion of Napster use.131  The district court based on these findings granted the preliminary injunction.132

 Napster appealed the district court's granting of the preliminary injunction.133  The Appellate Court ruled that the injunction was appropriate, but that it needed to be modified. The Appellate Court then stated that contributory liability may potentially be imposed only to the extent that Napster: (1) receives reasonable knowledge of specific infringing files of copyrighted musical compositions and sound recordings; (2) knows or should know that such files are available on the Napster system; and (3) fails to act to prevent the distribution of these works.134  The Court then said the mere existence of the Napster system, absent actual notice and the demonstrated failure of Napster to remove offending material, is insufficient to impose contributory liability.135

 On remand from the Appellate Court the district court still issued the preliminarily injunction, but set forth the specific requirements of that injunction.  The court ruled on March 5, 2001 that the plaintiffs had to provide notice to Napster of their copyrighted sound recordings by providing for each work: A.) the title of the work; B.) the name of the featured recording artist performing the work ("artist name") C.) the name(s) of one or more files available on the Napster system containing such work; and D.) a certification that plaintiffs own or control the rights allegedly infringed.136  The court then went on to say that Napster must use reasonable efforts to block all such files that they are given notice of by the plaintiffs.137  The court then stated that if either of the parties during the implementation of the preliminary injunction dispute the ability of Napster or of the Napster system to carry out the duties established under the court's order, that either party may set the matter for hearing before the court.138

 In the latest developments concerning this case there is a controversy concerning the compliance by the parties with the district court's injunction order.  In recent papers filed with the district court the RIAA has claimed that Napster is not complying with the district court order.139  The RIAA has also requested that Napster implement a "filter-in" system instead of the current "filter-out" system because users are getting around the current system too easily.140  Napster has fired back that it has aggressively complied with the court order, and that it has already blocked more than a quarter of a million songs in just three weeks.141  Napster has also claimed that the record companies have not been complying with the court order.  Napster has claimed that the recording industry has failed to provide it with alternate names of songs and that information that has been supplied has been incomplete.142

 In even more recent news it has been announced that on April 3, 2001 that the Senate Judiciary Committee will be holding a hearing about Napster and the future of digital music.143  The Napster Action Committee is planning for many members of the Napster community, including Napster's founder Shawn Fanning, to be in Washington D.C. that day to argue before Congress the reasons why it is important that the recording industry not shut down music file sharing.144

 The Napster controversy is far from over.  It will continue on into the foreseeable future.  I foresee three possible outcomes concerning the Napster controversy.  The first, and probably wisest, is for the parties to come up with a settlement agreement.  The longer that the parties are at odds the less likely a settlement is because of the growing animosity between Napster and the RIAA.  The next two possibilities are if the parties continue with their court battle.  First, the court could rule in Napster's favor.  This is not likely since the district court has not given much weight to Napster's fair use and space-shifting arguments.  Second, the court could rule for the RIAA.  That means Napster could be shut down, and/or that Napster could have to pay for damages that it has caused.  It is difficult at this time to determine what will happen, but it definitely is going to be interesting to see the controversy played out.

 Since MP3 technology is not going anywhere there is a need for users of MP3 technology and the Recording Industry to be able to come to some type of an agreement on how the technology can be used without violating current copyright laws.  As with almost all conflicts the core concern over copyright can be addressed by a contract.  This will take some cooperation between the users of the technology and the recording industry.  There are many different possibilities for the use of MP3 technology that could occur if cooperation between the parties does take place.

 The most obvious source of conflict currently is the dispute between the RIAA and Napster.150 In briefs to the court the RIAA has repeatedly stated that it is looking to get into the market of online MP3 distribution.  An agreement between the RIAA and Napster would give the recording industry instant access into the online MP3 market.  Already there have been several proposals that have been made by Napster for a business relationship between the record companies and Napster.  Napster's most recent proposal to the music industry was a guarantee of one billion dollars over the next five years in exchange for licenses to the copyrighted music.151  Napster has already shown that it has the largest base of users, approximately 64 million registered users, of any online MP3 distribution company.152  The current sticking point for Napster is for it to show that there is a viable marketing structure available that would allow the recording industry to make money by allowing their recordings to be traded as MP3s.  There are several different possibilities for a viable marketing structure between the two parties.  This can be seen by the fact that Bertelsmann, the German entertainment conglomerate that owns BMG, has become partners with Napster in the hope of tapping the MP3 market.153 A possible end to the conflict could be achieved, and both parties could benefit from a contract between the major music industry producers and Napster.

 If a settlement could be worked out between the parties there are several marketing models that Napster could use to make money for the owners of the copyrighted works.  One possibility is a monthly fee set-up where each user of Napster would pay a set fee, perhaps $20 per month, for the right to download an unlimited number of MP3s.  Alternatively, Napster could charge a minimal amount, such as $0.25, for the download of each individual song.  There would be essentially no cost to the holders of the copyrighted works as the Napster system has already been established.  Also, even if Napster where to begin creating the MP3s for distribution there is only a minimal cost in creating the MP3s.

 Napster could also possibly have a free alternative for those individuals that do not want to pay for the service.  This could be done through the use of advertisements that would run when the Napster user is using the Napster software.  This model would be similar to the set-up of NetZero154 that offers a free Internet service for individuals that don't mind banner advertisements running at the top of their screen.

 If Napster sets up a viable marketing structure there are several possibilities for compensating the music companies and artists.   One possibility would be for each company to be compensated based on their share of the music market.  Another possibility, and the one that I believe is the best, would be to base compensation on the number of times each song is downloaded.  This could be down by monitoring and keeping an exact count of the number of times a song is completely downloaded.  A possible alternative to an exact count system would be to use a formula like the one used by the radio industry that bases artist compensation on a sampling of the songs that are played on the air.  The example set by ASCAP155 and the radio industry could be used to keep costs lower because an exact number count would not be needed.

 Another possible future solution is for the models being set-up by CDNow and MP3.com to be followed by others.  CDNow is a music and video Internet store that also sells MP3s over the Internet.  CDNow makes available to users Digital Music Downloads, which are downloads in the form of MP3s that CDNow has received the permission of the copyright holder to make available for downloading.156  CDNow has three different categories of downloads available.  Songs and albums that are purchased from CDNow as Digital Music Downloads (DMD) are the individuals to keep, and will work indefinitely (they will never time out). Some free downloads work indefinitely, while others are offered on a "time-out" basis, meaning they will expire (and stop working) after a specified number of days or a particular date.157    To ensure that there is no infringement of copyright CDNow has copy protection on its MP3s that it sells.158  This means that the MP3 can not be copied or moved to another computer.159   The MP3s that can be bought on CDNow range in price from about $1.50 to $3.00 each.160

 MP3.com has also been a industry leading website in the distribution of online MP3s.  In response to previous legal problems, discussed above, MP3.com now gets permission from each music producer or artist before making an MP3 available on its site.  MP3.com has entered into negotiations with several music producers and groups, and its current settlement agreements have totaled more than $100 million.161  The basic agreement that MP3.com has reached has included a one-time charge for each new song that is added to the service, and then a charge, for example on quarter of a cent, for each time the song is downloaded.162  MP3.com has also sought out new artists to add to the site.  Many of these new artists are allowing their music to be downloaded for free in hopes of expanding their fan base, and hitting it big.

 Another possibility is for the music industry to find other ways of making a profit besides relying so heavily on the sale of CDs.  There have been several examples of this already.  The Grateful Dead have set one of the most prolific examples of finding alternatives sources of revenue.  The Grateful Dead example started in the 1960s when fans started sneaking in tape recorders into Grateful Dead Concerts.163  After a debate between the band and the band's record label, the Grateful Dead allowed the tapping of their concerts.164  The Grateful Dead had very simple rules for individuals that wanted to tape concerts.165  First, the tapes had to be used for noncommercial purposes only, and second the taping had to occur in a designated tapping section that was available at each concert site.166  The Grateful Dead believed that their fans would rather attend the concert than just have a recording of the concert.  The Grateful Dead have relied on the revenues from their concerts and other memorabilia to make money for the band.  As the Grateful Dead did in the past with tape recordings of concerts they are today leading the way towards the proliferation of MP3 sharing on the Internet.  On May 11, 1999 the Grateful Dead released a press release that stated that under strict guidelines prohibiting commercial use that the band would allow free Internet sharing of live performances that had been taped by their fans via the MP3 format.167  It is noted that Jerry stated that once he was done with the music, the Deadheads could do what they wanted with it.168  Music artists might be able to follow this example, and not worry about every penny that the band might be able to squeeze out of all available sources, and instead look for alternative sources of revenue.

 There have been other recent examples of music artists reaching out to embrace MP3 technology.  The first example is that of Alanis Morissette and MP3.com.  This relationship started in August of 1999 when MP3.com announced that it would be co-sponsoring a five and a half week concert tour of Alanis Morissette and Tori Amos.169  When MP3.com announced the sponsorship of the tour it stated that, "this is consistent with our mission to create a reciprocal sense of community between artists and music enthusiasts.170  Since that time Alanis Morissette has also received stock in MP3.com in exchange for the right of MP3.com to allow its users to downloaded her music in the MP3 format.  This relationship can still be seen today with Alanis Morissette releasing songs in the MP3 format that are available exclusively through MP3.com.171

 Another example of cooperation between the MP3 world and the music industry is the cooperation between of Napster and Limp Bizkit.  This relationship started when Napster sponsored a free concert tour for Limp Bizkit.172  The concert tour was a ten-city tour that contained multiple play dates in each city.  Fred Durst, the lead singer of Limp Bizkit, has stated that, "Napster is a great way for fans to sample an album before buying it."173  Durst has also stated that Napster is an "amazing way to market and promote music" to a massive audience.174  Since Fred Durst has spoke out about MP3s and Napster there have also been other artists that have spoke out in support of Napster and MP3 technology.175

 Ultimately, I believe that MP3 technology will develop, and continue to get smaller and increase in quality.  I believe that Napster, or a similar service, will strike a deal with the major recording companies to allow the online distribution of MP3s.  This service will most likely involve a monthly fee for each user.  The amount each artist or record company recieves will be based on the number of times their songs are downloaded.  The mostly likely choice would be for Napster to provide this service since it already has an enormous user baser, but the longer the conflict continues the less likely that the recording industry is to come to an agreement with Napster.  The next few months and years will be exciting ones as the technology evolves, the law changes, and the courtroom battles unfold.  176

1  http://help.mp3.com/help/article/aboutmp3s.html

2  http://help.mp3.com/help/article/why_called.html

3 Id.

4 Id.

5 http://hotwired.lycos.com/webmonkey/00/31/index3a.html

6 Id.

7 Id.

8  http://www.mpowercom.com/cgi-bin/Glossary/definition.cgi?term=Upload Upload is defined as a transmission or sending of data from your computer to another.

9 http://cdnow.com/cgi-bin/mserver/SID=190729420/pagename=RP/HELP/download.html: CD Now defines download as a transfer of a digital file, such as a song, from one computer to another over a network, such as the Internet.

10 http://coverage.cnet.com/Content/Features/Techno/Cablemodems/ss06.html

11 Id.

12 www.sciam.com/2000/0500issue/0500toig.html: Disk/Trend, a California based research market firm that tracks the hard drive industry, reports that the average price per megabyte for hard-disk drives has plunged from $11.54 in 1966 to $0.04 in 1998, and the estimate for 1999 is $0.02.  James N. Porter, a president of Disk/Trend predicts that by 2002 the price will have fallen to $0.003 per megabyte.

13 http://www.music4free.com/help/terminology: To rip means to transfer audio tracks from an audio CD to a computer as a WAV file.  Ripping is the name of the process and a ripper is the software used in the process.

14 Id.  To encode means to compress a WAV file into a MP3, VQF, or another highly compressed audio format.  Encoding is the name of the process and an encoder is the software used in the process.
 
15  http://www.music4free.com/help/making

16 http://www.music4free.com/help/terminology: WAV was developed by Microsoft and IBM, and is a format for storing sound as files.  Support for WAV files was built into Windows 95 making it the standard for sound on PCs.  WAV sound files can be played by nearly all Windows applications that support sound.

17 http://www.music4free.com/help/making

18 Id.

19  http://www.jamienet.freeserve.co.uk/create/html

20 http://www.zdnet.com/zdhelp/stories/main/0,5594,2553165-3,00.html

21 www.winamp.com

22 www.musicmatch.com/home

23 www.microsoft.com/downloads

24 http://www.zdnet.com/zdhelp/stories/main/0,5594,2553165-3,00.html

25 Recording Industry Association of America v. Diamond Multimedia Sys., 29 F. Supp. 2d 624 (C.D. Cal., 1998).  ("RIAA I")

26  http://help.mp3.com/help/gettingstarted/glossary.html: To burn means the process of permanently archiving data on a blank CD.  CD drives that are used to write date to blank CDs are called CD burners or CD writers.

27  Id.

28 http://www.music4free.com/help/making

29 Id.

30  http://www.winamp.com

31 http://www.music4fee.com/help/making

32  http://napster.com

33  Recording Industry Association of America v. Napster, 114 F. Supp. 2d 896 (N.D. Cal., 2000).

34 http://dailynews.yahoo.com/h/nm/20010325/en/music-napster_46.html

35 Id.

36  http://news.cnet.com/0-1005-200-5044629.html

37 http://www.bearshare.com

38 http://www.limewire.com

39 http://www.mtv.com/nav/intro_news.jhtml: Napster Usage Down 10% since Wednesday (03-19-01)

40 http://www.mp3.com

41  http://:www.audiofind.com
 
42 http://riaa.com/About-Who.cfm: The Recording Industry Association of America is the trade group that represents the U.S. recording industry. Their mission is to foster a business and legal climate that supports and promotes their members' creative and financial vitality. Their members are the record companies that comprise the most vibrant national music industry in the world. RIAA members create, manufacture and/or distribute approximately 90% of all legitimate sound recordings produced and sold in the United States.  [This mainly comes from the Big 5 U.S. record companies which are: BMG, EMI, Sony, Universal/Polygram, and Warner-Electra-Atlantic.]
In support of their mission, they work to protect intellectual property rights worldwide and the First Amendment rights of artists; conduct consumer, industry and technical research; and monitor and review - - state and federal laws, regulations and policies. The RIAA also certifies Gold, Platinum, Multi-Plantinum, and Diamond sales awards, and recently launched Los Premios De Oro y Platino, a new award celebrating Latin music sales.

43  Recording Industry Association of America v. Napster, 114 F. Supp. 2d 896 (N.D. Cal., 2000).

44 http://www.riaa.com: The Recording Industry Association of America's web-site

45 http://www.metallica.com: Metallica's web-site

46 http://www.metallica.com/news/2000/napfaq.html: Metallica's explanation of why they filed a lawsuit against Napster.

47 http://www.consumer-news.com/mp3/security-copyright.html: MP3 Security and Copyright Issues

48 Id.

49 Id.

50 Recording Industry Association of America v. Napster, 114 F. Supp. 2d 896 (N.D. Cal., 2000).

51 http://www.loc.gov/copyright: U.S. Copyright Office Web Page

52 http://www.cyberspacelaw.org/dogan/dogan1.html: Copyright in Cyberspace: Introduction to Copyright Law

53 Id.

54 Id.

55  17 U.S.C. 102 (1976).  Subject Matter of Copyright: In General states:
(a) Copyright protection subsists, in accordance with this title, in original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid or a machine or device.  Works of authorship include the following categories:
1. literary works;
2. musical works, including accompanying words;
3. dramatic works, including any accompanying music;
4. pantomimes and choreographic works;
5. pictorial, graphic, and sculptural works;
6. motion pictures and other audiovisual works;
7. sound recordings; and
8. architectural works.

56 Id.

57 17 U.S.C. 106 (1976). Exclusive Rights in Copyrighted Works states: Subject to sections 107 through 121, the owner of copyright under this title has the exclusive rights to do and to authorize any of the following:
1. to reproduce the copyrighted work in copies or phonorecords;
2. to prepare derivative works based upon the copyrighted work;
3. to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;
4. in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly;
5. in the case of literary, musical, dramatic, and choreographic works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly; and
6. in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.

58 Id.

59 Recording Industry Association of America v. Napster, 114 F. Supp. 2d 896 (N.D. Cal., 2000).

60 17 U.S.C. 107 (1976).  Limitations on Exclusive Rights: Fair Use states: 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.  In determining whether the use made of a particular case is a fair use the factors to be considered shall include-
1. the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
2. the nature of the copyrighted work;
3. the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
4. the effect of the use upon the potential market for or value of the copyrighted work.  The fact that a work is unpublished shall not itself bar a finding of fair use is such finding is made upon consideration of all the above factors.

61 Id.

62 Recording Industry Association of America v. Napster, 114 F. Supp. 2d 896 (N.D. Cal., 2000).

63 Id.

64 Id.

65 Id.

66 17 U.S.C. 1001.
 
67  112 Stat. 2860 (1998).

68  Sony Corporation of America v. Universal City Studios, Inc. 486 U.S. 417 (1984).

69  Video tape recorders (VTRs) are today called videocassette recorders (VCRs).

70 Sony Corporation of America v. Universal City Studios, Inc. 486 U.S. 417, 420 (1984).

71  Id at 419-20.

72  Id at 420.

73  Id at 420.

74 Sony Corporation of America v. Universal City Studios, Inc. 486 U.S. 417 (1984).

75  Id at 424.

76  Id at 424.

77  Id at 447.

78 Sony Corporation of America v. Universal City Studios, Inc. 486 U.S. 417, 456 (1984).

79  Id at 456.

80  Id at 456.

81  Here is a classic example of time-shifting taken from the Cyberspace Law Seminar class.  While in class on Wednesday nights we can tape the television show the West Wing.  Then at some later date we can watch the television show.  The show is only meant to be view, and not to become part of a permanent library.
 
82  17 U.S.C. 1001 (1992).

83  http://www.hrrc.org/html/ahra.html: A site that sets forth the entire contents of the Audio Home Recording Act.

84  17 U.S.C. 1001(11) (1992).  The term "serial copying" means the duplication in a digital format of a copyrighted musical work or sound recording from a digital reproduction of a digital musical recording.  The term "digital reproduction of a digital musical recording" does not include a digital musical recording distributed, but authority of the copyright owner, for ultimate sale to the consumer.

85  David A. Hepler, Dropping Slugs in the Celestial Jukebox: Congressional Enabling of Digital Music Piracy Short-Changes Copyright Holders, 37 San Diego Law Rev. 1165, 1179-80 (2000).

86  Id.

87  17 U.S.C. 1001(3) (1992).  A "digital audio recording device" is a machine or device of a type commonly distributed to individuals for use by individuals, whether or not included with or as part of some other machine or device, the digital recording function of which is designed or marketed for the primary purpose of, and that is capable of, making a digital audio copied recording for private use, except for-
a. professional model products, and
b. dictation machines, answering machines, and other audio recording equipment that is designed and marketed primarily for the creation of sound recordings resulting from the fixation of nonmusical sounds.

88  17 U.S.C. 107 (1976).

89  17 U.S.C. 1002(a) (1992).  Section 1002(a) states: No person shall import, manufacture, or distribute any digital audio recording device or digital audio interface device that does no conform to-
1. the Serial Copy Management System;
2. a system that has the same functional characteristics as the Serial Copy Management System and requires that copyright and generation status information be accurately sent, received, and acted upon between devices using the system's method of serial copying regulation and devices using the Serial Copy Management System; or
3. any other system certified by the Secretary of Commerce as prohibiting unauthorized serial copying.

90  http://www.mitsuicdstore.com/SCMS_nh.html: Site that explains what a Serial Copy Management System (SCMS) is.

91  17 U.S.C. 1003(a) (1992).  Section 1003(a) states: No person shall import into and distribute, or manufacture and distribute, any digital audio recording device or digital audio recording medium unless such person records the notice specified by this section and subsequently deposits the statements of account and applicable royalty payments for such device or medium specified in section 1004.

92  David A. Hepler, Dropping Slugs in the Celestial Jukebox: Congressional Enabling of Digital Music Piracy Short-Changes Copyright Holders, 37 San Diego Law Rev. 1165, 1179-80 (2000).

93  17 U.S.C. 1004(a)(1) (1992).  Section 1004(a)(1) states: The royalty payment due under section 1003 for each digital audio recording device imported into and distributed in the United States, or manufactured and distributed in the United States, shall be 2 percent of the transfer price.  Only the first person to manufacture and distribute or import and distribute such device shall be required to pay the royalty with respect to such device.

94 17 U.S.C. 1004(a)(3) (1992).  Section 1004(a)(3) states: Notwithstanding paragraph (1) and (2), the amount of the royalty payment for each digital audio recording device shall not be less than $1 nor more than the royalty maximum.  The royalty maximum shall be $8 per device, except that in the case of a physically integrated unit containing more than 1 digital audio recording device; the royalty maximum for such unit shall be $12.

95  David A. Hepler, Dropping Slugs in the Celestial Jukebox: Congressional Enabling of Digital Music Piracy Short-Changes Copyright Holders, 37 San Diego Law Rev. 1165, 1179-80 (2000).

96 Recording Industry Association of America v. Diamond Multimedia Sys., 29 F. Supp. 2d 624 (C.D. Cal., 1998).

97  Id at 625.

98  Id. at 625.

99  Id at 625.

100  Recording Industry Association of America v. Diamond Multimedia Sys., 180 F.3d 1072, 1075 (9th Cir. 1999).

101  Id at 1075.

102  Id at 1075.

103  Id at 1076.

104 Recording Industry Association of America v. Diamond Multimedia Sys., 180 F.3d 1072, 1078 (9th Cir. 1999).

105  Id at 1081.

106  112 Stat. 2860 (1998).

107   Carolyn Andrepont, Legislative Update: Digital Millennium Copyright Act: Copyright Protection for the Digital Age, 9 J. Art & Ent. Law 397, 398-99 (1999).

108  Id at 399.

109  Id at 399.

110  112 Stat. 2860 Section 1201(a)(A) (1998).  Section 1201(a)(A) states: No person shall circumvent a technological measure that effectively controls access to a work protected under this title.  The prohibition contained in the preceding sentence shall take effect at the end of the 2-year period beginning on the date of the enactment of this chapter.

111   112 Stat. 2860 Section 1201(c)(1) (1998).  Section 1201(c)(1) states: Nothing in this section shall affect the rights, remedies, limitations, or defenses to copyright infringement, including fair use, under this title.

112   112 State 2860  Section 512(a) (1998).  Section 512(a) states: a service provider shall not be liable for monetary relief, or , except as provided in subsection (j), for injunctive or other equitable relief, for infringement of copyright by reason of the provider's transmitting, routing, or providing connections for, material through a system or network controlled or operated by or for the service provider, or by reason of the intermediate and transient storage of that material in the course of such transmitting, routing, or providing connections, if-
1. the transmission of the material was initiated by or at the direction of a person other than the service provider;
2. the transmission, routing, provision of connections, or storage is carried out through an automatic technical process without selection of the material by the service provider;
3. the service provider does not select the recipients of the material except as an automatic response to the request of another person;
4. no copy of the material is made by the service provider in the course of such intermediate or transient storage  is maintained on the system or network in a manner ordinarily accessible to anyone other than anticipated recipients, and no such copy is maintained on the system or network in a manner ordinarily accessible to such anticipated recipients for a longer period than is reasonably necessary for the transmission, routing, or provision of connections; and
5. the material is transmitted through the system or network without modification of its content.

113  Id.

114 Recording Industry Association of America v. Napster, 114 F. Supp. 2d 896 (N.D. Cal., 2000).

115  UMG Recordings v. MP3.com Inc., 92 F. Supp 2d 349, 350 (S.D.N.Y. 2000).

116  Id at 350.

117  Id at 350.

118  Lester Chambers et al. v. MP3.com, Inc., 123 F. Supp 2d 198, 200 (S.D.N.Y. 2000).
 
119 Recording Industry Association of America v. Napster, 114 F. Supp. 2d 896, 904 (N.D. Cal., 2000).

120 UMG Recordings v. MP3.com Inc., 92 F. Supp 2d 349, 352 (S.D.N.Y. 2000).

121  Id at 353.

122 http://www.geek.com/news/geeknews/q22000/gee200010119002662. html: MP3.Com Keeps on Settlin'

123 Recording Industry Association of America v. Napster, 114 F. Supp. 2d 896 (N.D. Cal., 2000).

124  Id at 905.

125 Id at 905.

126 Id at 905.

127 Recording Industry Association of America v. Napster, 114 F. Supp. 2d 896,900 (N.D. Cal., 2000).

128 Id at 900.

129 Id at 900-01.

130 Id at 902-03.

131 Recording Industry Association of America v. Napster, 114 F. Supp. 2d 896, 904 (N.D. Cal., 2000).

132 Id at 927.  The district court ordered that Napster was preliminarily enjoined from engaging in, or facilitating others in copying, downloading, uploading, transmitting, or distributing plaintiffs' copyrighted musical compositions and sound recordings, protected by either federal or state law, without the express permission of the rights holders.  This injunction applies to all such works that plaintiffs own; it is not limited to those listed in Schedules A and B of the complaint.

133 Recording Industry Association of America v. Napster, 239 F.3d 1004 (9th Cir. 2001).

134 Id at 1027.

135 Id at 1027.

136 Recording Industry Association of America v. Napster, 2001 U.S. Distr. Lexis 2186 (N.D. Cal., 2001).

137 Id.

138 Id.

139 http://dailynews.yahoo.com/h/mc/20010329/tc/napster_and _riaa_square_off_in_court_again_1.html: Napster and RIAA Square Off in Court, Again

140 Id.

141 Id.

142 Id.

143 http://www.napster.com: Napster News Flash
 
144 Id.

145 http://www.music4free.com/help/terminology

146 Id.

147 Id.

148 http://www.music4free.com/help/terminology

149 Id.

150 Recording Industry Association of America v. Napster, 114 F. Supp. 2d 896 (N.D. Cal., 2000)

151  http://new.cnet.com/0-1005-200-5044629.html

152  Id.

153  Id.

154  http://www.netzero.com

155  http://www.ascap.com: American Society of Composers, Authors, and Publishers
 
156 http://cdnow.com/cgi-bin/mserver/SID=202069225/pagename/
RP/HELP/download.html:Digital Music Downloads

157  Id.

158 Id.

159  Id.

160  http://cdnow.com

161  http://www.geek.com/news/geeknews/q22000/gee200010119002662. html: MP3.Com Keeps on Settlin'
 
162  Id.

163  http://www.wdirewolff.com/deadlob06.html: The Tapers of the Grateful Dead
 
164  Id.

165 Id.

166 Id.

167 http://www.wdirewolff.com/deadlob06.html: Press Release May 11, 1999- Grateful Dead Sanction Free MP3 Format.  The press release states that, "the Grateful Dead feel this decision is important and far reaching for both the band and their fans.  This MP3 policy continues the band's long tradition of allowing free access to and trading of live recordings of their music and ensures that fans are not left with outmoded technology.

168 Id.

169  http://pr.mp3.com/pr/10.html

170  Id.

171 http://www.mp3.com/news/423.html

172  http://www.mtv.com/sendme.tin?page=/news/articles/1431247/2000718/story.jhtml: Limp Bizkit meets Napster Chief at Free Show

173  http://zdnet.com/zdnn/stories/news/0,4586,2554975,00.html: Limp Bizkit backs Napster

174   Id.

175  http://zdet.com/zdnn/stories/news/0%2C2613714%2C00.html: Prince Praises Napster; Rips Industry