Napster will be forced to police its system to prevent the
unrestricted trade in copyrighted music following yesterday’s court
ruling. The company says it could be shut down as a result of the
decision by the 9th US Circuit Court of Appeals.
Napster, the internet song-swapping service, will be forced to
police its system to prevent the unrestricted trade in copyrighted
music following yesterday’s ruling by the 9th US Circuit Court of
Appeals that upheld an injunction against the company, subject to
minor amendments. It likely means the end of unlimited music
sharing on the Napster service.
In a statement, the company said:
“Napster is not shut down, but under this decision it could be.
We are very disappointed in this ruling by the three judge panel
and will seek appellate review. The Court today ruled on the basis
of what it recognised was an incomplete record before it. We look
forward to getting more facts into the record. We will pursue every
avenue in the courts and the Congress to keep Napster
operating.“
Napster vowed to continue its efforts to settle the case with
record companies. CEO Hank Barry said:
“We have been saying all along that we seek an
industry-supported solution that makes payments to artists,
songwriters and other rightsholders while preserving the Napster
file sharing community experience. On October 31, we announced an
alliance with Bertelsmann around a business model for a
membership-based service that does just that.”
The company has been ordered to police its system to police its
system to the extent that is possible. Its lawyers have pointed out
that this gives some ambiguity in Napster’s favour as to what
extent is possible.
One problem for Napster in trying to settle its case with record
companies is in trying to find a workable revenue model that gives
users access to all music while fairly reimbursing the various
copyright holders. Finding such a model has been a major obstacle
in Napster’s settlement negotiations to date.
There are incentives for record companies to settle with
Napster, despite having the apparent upper hand in the legal
proceedings.
First, Napster has an enormous user base, with 50 million names
having been registered to date, making it a potentially valuable
marketing platform.
Second, users have to log on to the Napster site to download
files from other users. However, there are decentralised
alternatives such as Gnutella and Freenet. These services allow
users to download free software and then search the computers of
any others on-line with the same software on their computers.
The dangers that Gnutella and Freenet present to copyright
holders are that, not only do they offer access to all file types
(not just MP3 files), there is also nobody to sue except the
individuals exchanging files. There is no company owning the
software. In the case of Freenet, the users and the files they
exchange are said to be completely untraceable.
Both Gnutella and Freenet are in continuing development,
although beta versions are already available and Gnutella has a
significant userbase. They are presently less easy to use than
Napster, but the expectation is that if Napster is shut down or too
restricted, they will quickly take over.
See also: Court rules against Napster and upholds injunction,
OUT-LAW News, 13/02/2001.
