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<nettime> Is Napster illegal? New defense arguments

Tuesday July 04 04:00 PM EDT

Napster: Downloading music for free is legal
By John Borland, CNET

Embattled online music-swapping company Napster has a simple message for
the courts and for the record industry: Downloading songs online without
paying for them is legal. In its first lengthy legal response to the record
industry's attempt to shut down the service, Napster attorneys today said
that finding and downloading copyrighted songs for free is protected by law
as long as Napster members themselves aren't making money from the

The brief cited a recent federal court case that decided some noncommercial
copying of music is protected by law. That extends even to making a song
available for thousands of random Net users to download, the company's
attorneys say--and that means Napster is doing nothing wrong.

"If Napster users are not acting illegally, then there is no contributory
(copyright) infringement," David Boies, the high-profile antitrust lawyer
recently hired by Napster to spearhead its legal team, said in a conference
call with reporters.

But Boies also raised a far more ambitious argument that could be hugely
damaging for the record companies if it gains legal traction. Citing
internal documents he says show the labels have abused their market power
to block alternative channels of music distribution, along with an obscure
antitrust law, the attorney says the labels have lost the legal ability to
enforce their copyrights.

"If you use a copyright to achieve an anti-competitive purpose, you lose
the rights to them," he said.

Napster is facing a full-court press by the Recording Industry Association
of America (RIAA) and its member record companies, which are asking a judge
for a preliminary injunction removing all major-label songs from the
file-swapping service while a larger case comes to trial.

The record companies contend that Napster is facilitating copyright
infringement on a massive scale by allowing its millions of members to
search for songs on each others' computers and to download them for free.
In its most recent set of legal briefs, the industry cited surveys that it
said proved online file-sharing is already cutting into CD sales.

The file-swapping company responded today with a battery of its own surveys
that say Napster actually helps spur CD sales, noting that retail music
sales figures have climbed since the service began. According to a survey
by a Wharton School of Business professor, 70 percent of Napster members
polled reported they've used the service to sample music before buying it,
the brief added.

But the core of today's legal papers are a trio of Napster defenses
outlining why federal judge Marilyn Hall Patel shouldn't shut down the

The company first contends that its members' song downloads are legal under
the same law that protected Diamond Multimedia's first MP3 player from a
different RIAA suit last year. That law, the 1992 Audio Home Recording Act,
explicitly bars copyright suits from being brought "based on the
noncommercial use by a consumer" of a digital or analog recording device or

Under this argument, copying music through services such as Napster or
Gnutella would be legal, but downloads of software or movies would still be
copyright violations.

If that argument fails, Napster has several backups.

The company is arguing that its service should have the same protections
that saved the Betamax videocassette recorder from being ruled illegal in
the 1980s. The movie industry had sued Sony for producing a machine that
could make illegal copies of films, but a court ruled that VCRs had other,
legal uses as well.

Napster, too, can be used for legal purposes, such as marketing or
promoting songs from record label partners or unsigned bands, even if many
people are trading copyrighted material, the company noted. Napster simply
has to establish that its service is "capable of substantial non-infringing
use" to meet that legal test, Boies said.

Finally, the company is repeating its contention that it is simply an
online "directory" of music and as thus is not legally responsible for the
actions of people using its service. The company lost this argument in an
earlier legal round.

But Boies and his team are adding a new legal twist to the argument--one
that harks to Boies' recent work as the head of the Justice Department's
antitrust team fighting Microsoft.

The attorneys have cited an obscure legal doctrine dubbed "copyright
misuse," which says copyright holders can lose the power to enforce their
copyrights if they've used them to achieve an anti-competitive purpose.

Through the legal discovery process, Napster has obtained internal record
company documents that Boies said show the RIAA is "misusing copyrights for
anti-competitive purposes." That undermines the association's right to sue
Napster on copyright grounds, Napster contends.

The "Big Five" record labels--Sony Music, EMI Recorded Music, Bertelsmann's
BMG Entertainment, Time Warner's Warner Music and Seagram's Universal Music
Group--were recently cited by the Federal Trade Commission for collective
pressure tactics that have boosted the price of CDs. Although the labels
agreed to change their practices, they never admitted wrongdoing as a
result of the suit.

The two sides are scheduled to meet in court July 26, where the judge will
decide whether to grant a preliminary injunction against Napster. The
technology company is asking that this date be pushed back to allow the
court to take a detailed look at the issues and evidence before reaching a

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