Digital Dilemma: Could the Digital Millennium Copyright Act Have Inadvertently Exempted Napster And Its Progeny From Liability?

Matthew James Fantaci

Until recently, copyright protection of sound recordings by the Recording Industry Association of America1 (the "RIAA") has been a fairly easy task. Prior to the advent of digital technology, copyright holders had little to fear from the mass "pirating" of musical recordings because the quality of music recorded on "analog" tapes degrades with each successive copy.2 In contrast, when digital copies are made, the copy and each of its successors retains the exact same quality as the original regardless of how many generations of copies are made.3 Even so, the threat of mass pirating was minimal because of the enormous size of the files and painfully slow modem speeds. Prior to the development of compression algorithms and high-speed Internet connections, a five minute song could take several hours to download.4

Recently, however, computer programmers have developed compression algorithms which allow data occupying a large amount of space to be significantly "compressed into files that are easily transferred across the Internet and downloaded onto a personal computer."5 The preferred compression format is known as "lossy."6Basically, the lossy format eliminates those sounds in the original material which are imperceptible to the human ear, allowing for a huge reduction in storage requirements.7 The most popular, and most feared, lossy format is the MPEG-1 Audio Layer 3, or MP3.8 Files compressed into the MP3 format, when combined with a high speed modem, reduce the amount of time it takes to download a song from hours to merely minutes.

Two years ago, a nineteen-year old college student turned the music industry upside down when he created the revolutionary new file sharing program known as Napster. The system, run by Napster, Inc. (Napster), enabled users to swap songs configured in the MP3 format on an unprecedented scale. Limited by only the need of a computer with Internet access, Napster made large scale music piracy as easy as using a telephone. In addition, Napster defined the future of music distribution on an international level by eliminating the need for fancy packaging, shipping, and retail stores, the cost of which is passed on to consumers. Perhaps best of all, online music distribution allows consumers to choose individual songs instead of forcing them to buy an entire album at an exorbitant price in order to obtain a desired song. Unfortunately for the RIAA, the Napster system not only allowed users to bypass the traditional distribution chain, but also paid nothing to the copyright owners of songs downloaded by its users.

As Napster's user base began to grow exponentially, record company executives realized the new kid at the table was not bluffing. Being no stranger to the game, the RIAA decided to ask the courts for a new hand, and in December of 1999 filed suit in the Northern District of California against Napster, Inc. for contributory and vicarious copyright infringement.9 In its defense, Napster claimed its activity does not rise to the level of contributory or vicarious infringement. In the alternative, Napster claimed that it was exempt from liability because it qualified for the "safe harbor" for information location tools contained in the Digital Millennium Copyright Act of 1998 (DMCA).10

Naturally, the publicity surrounding the case piqued the curiosity of Internet users world wide and Napster's membership increased astronomically.11 Worried that the increased numbers of Napster users could cause irreparable damage by the time the suit actually went to trial, the RIAA requested a hearing for preliminary injunction to enjoin the Napster service from operating until trial. On July 26, only one day after the hearing, Judge Patel of the Northern District of California granted the injunction to the plaintiffs.12 This seemed to sound the death knell for Napster. However, two days later the Ninth Circuit stayed the injunction because it felt that Judge Patel, in her ...

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