James A. Irvin
BUSI 472
Case #5
Napster: The Debate Over Copyright Infringement
In early 1999, Shawn Fanning, a Northeastern University freshman, created Napster software. That summer he made it available for free through his website. Napster is a peer-to-peer technology, which makes it possible for users to freely share their music files through the internet with other users all over the world. Specifically, this is how Napster works:
1.)A user sends a request for a song.

2.)Napster checks its database of music to see if the song is on the PC hard-drive of
another Napster user whose computer is turned on (Note: No music is stored on
Napster servers).

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3.)Napster finds the song.

4.)Napster sends the song in MP3 format to the user who requested
On December 6, 1999 the record industry sued Napster in Federal District Court for copyright infringements, and petitioned that court to shut down Napster. On July 26, 2000 the judge issued a temporary injunction to shut down Napster, and the next day Napster appealed the ruling before the U.S. Court of Appeals in San Francisco. The following day the Appeals Court granted Napster temporary reprieve against injunction so they could further review the injunction request. On October 2, 2000 the opposing parties presented their supporting arguments before the Court. The case was finally resolved on February 12, 2001 when a ruling by the District Court of Appeals upheld the original ruling that Napster was aware its users were swapping copyrighted materials. Subsequently, Napster was ordered to stop allowing its millions of users to swap copyrighted material without a fee.
There are several ethical issues involved in this case. First is the theft of the copyrighted music produced by artists who have not given Napster the right to transmit their music. Secondly, is the right of Napster to provide a legitimate service to consumers, and how that right has been attacked by artists in the recording industry. There are, indeed, two sides to this story.

The stakeholders involved in this case are the artists, the recording industry as a whole, retailers, and consumers. All of these stakeholders are affected equally in this matter. The artists, recording industry, and music retailers face substantial loss of income if consumers realize, and decide, that they can simply download music instead of purchasing it. Likewise, the consumer now has the opportunity to obtain music for free for which they otherwise would have had to pay, perhaps an artificially high price.

Among the Biblical standards present in this case are trust, respect, responsibility, fairness, and citizenship. With respect to trust, Napster claims that it has put trust in its users that they will not download or share copyrighted material. Though Napster itself does not steal any copyrighted material, it has been proven that, more often than not, its users do. Napster users have not shown respect for the autonomy of the artists who produce the copyrighted music that they are downloading. Though the company is receiving much criticism, Napster has shown some semblance of responsibility, fairness, and citizenship.

Napster has demonstrated responsibility by offering $1 billion to the recording industry to settle its lawsuit. It has demonstrated fairness and citizenship by cooperating with the due process of the law and obeying the commands of the Court. The company was sued, then filed an appeal to the decision handed down by the court, lost its appeal, and finally abided by the courts ruling.
One alternative Napster could pursue would be to work with the music industry to distribute certain sample tracks to the public.These tracks could be distributed royalty-free as promotion for the album, or Napster could agree to pay royalties. A cooperative effort with the music industry has the advantage of being totally legal and stopping all conflicts between Napster and the RIAA. However, such a model would mean a great reduction in the number of songs available and would eliminate the ‘sharing’ aspect of the program.

Another option for Napster, though it would be unethical, would be that being adopted by other similar information-sharing applications like Freenet and Gnutella is to make file transfers over the application anonymous. Adding to that, the fact that the central servers themselves do not have to contain any copyrighted files, tracking down users breaching copyright legislation will be incredibly difficult. Advantage of the anonymous peer-to-peer model is that if no corporation, individual or other entity claims ownership, no one can be sued. And because no files are stored on the central server, no copyright is being infringed there. The disadvantage of this method, would be that Napster would still be breaking the law, and undoubtedly new legislation would be brought in and measures would be taken to stop the service. Furthermore, if Napster could not take credit officially for their software, then they could not profit from it, something they need to do, considering the investment in the company.

Perhaps the optimal solution for Napsters dilemma is the possibility of a cable TV type payment. Users pay a certain monthly fee for all the downloaded music they wanted. They could chat with their favorite artists, get first claim on concert tickets, and browse possible downloads by genre. The new system would pay the artists their royalties and sell millions of older titles that at present are sitting in vaults because no stores will give them shelf space. This option has the advantages of cooperation between the music industry and Napster. Napster users will have the same type of service as they do now, with extras so they wont have to turn to no-fee options (Gnutella and Freenet). Music companies will be able to use the Internet for sales of all their merchandise. If music companies can package a better experience people will pay for it. In a recent survey of college students more than two thirds of the respondents would be willing to pay for a $20 dollar monthly fee of a similar service. The only foreseeable disadvantage of this solution is the plausibility of the record companies cooperating in such an effort.

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Napster is a music-sharing service that serves people with downloadable software for
their computer and allows the download of almost any music from around the world. The
Websters Universal and Thesaurus, says that the definition of music is: Music: harmony,
melody, symphony. The basic idea of Napster is for anyone who wants to listen to music. However, the argument about Napster is that it is a directory service that allows users to transfer music files from music labels that have not signed a deal with Napster. The music industry feels they are losing money because there are devices known as CD-RW and this allows for the burning of homemade compact discs with songs that Napster provides. Besides the music industry, there are bands that feel that due to Napster’s popularity; they are losing money that they work for. The music industry feels that if people are burning there own compact discs at a cheap rate then the music company are going to lose money. In the following paper I will discuss why people use Napster, why there is a problem with the use of Napster, and how the service can be used legally.

The idea of Napster was started by a freshman at Northeastern University in January 1999. In May 1999 Napster took shape as one of the most used computer software around. From the Napster web site you easily download the software. The software then connects you with millions of users who have the song you are searching for. After you find the song you can start the download process and download that song onto your computer. One negative aspect of Napster is that the songs you download mostly take a long time to download, depending on your connection speed, and take up a lot of space in your memory. After you download the song you
can then make your own compact disc if you have the right equipment that is. The equipment needed is a compact disc burner and the recordable compact discs. You then are able to distribute
the songs and only have paid a fourth of the price that you would have paid if you had bought the compact disc from a music store (Napster).

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Many bands and music labels have sued the people behind Napster. The music industry is saying that Napster breaks copyright laws by allowing people to spread music without the proper authorization for usage. In October 2000 at a court hearing, “the federal appeals court judges grilled attorneys for the recording industry…asking how record companies expect Internet music-swapping firm Napster to sift illegal files out of its system and why they have not prosecuted any of the company
quote s millions of users (Tate)”. In this case, the courts see that Napster is a company that does not promote the illegal making of compact discs. The purpose of the site is not to cheat the music industry. The purpose of Napster is to create a network where people can share different songs and music (Tate).

Recently Napster has joined with a major media giant. Bertelsmann
quote s is a German giant in the media business. The German company has “formed a strategic alliance with the outlaw Internet service” on the thirteenth of November 2000 (Stone). Bertelsmann’s has loaned Napster fifty million dollars to help make a system that will benefit artists, songwriters, publishers and music labels. The system will require a fee of four dollars and ninety-five cents a month for the service of Napster. This amount of money will add up and will be divided among the artists, songwriters, publishers and music labels (Stone, Magid).

The small fee for the use of Napster has mixed reactions. Paul O’Toole is a friend of mine
that I had interviewed and has had Napster since it has been available to be downloaded. He has a compact disc burner and enjoys not having to purchase compact discs. He was mad at the fact
that the free service that he has been getting will soon cost him money (OToole). Many people agree with the feeling of O’Toole but they all agree that they would pay the fee. Gina Gentile is another friend that I have interviewed and has recently found Napster appealing to her needs. She does not have a compact disc burner but still enjoys downloading her favorite songs. When asked to discuss her feelings on the fee she said that she expected that a service like Napster would not be free for long. Gentile feels that the millions of people who use the music service could make the difference in the lawsuits of today. She says the cost of the fee is acceptable and that a lot of the problems behind the legality of Napster would be solved if the music industry received some of the money that they feel they are losing (Gentile).

The deal with Bertelsmann and Napster have seemed to disappoint the forty million Napster users who have gotten use to getting their music free online. The deal, however, deserves praise. The deal preserves traditional protection for copyrights. If the deal is followed by the rest of the music industry, it would “allow Napster to develop its file-sharing technology without facing threats of being shut down or fined heavily for fomenting copyright infringement” (The Napster Deal). Even though users will be charged for the music service, they will gain long-term benefits. The idea of protecting copyrights is an important to the public. The sharing of copyrighted material removes the feeling that encourages musicians to compose authors to write and newspapers to publish. However, ending Napster overall has never been the answer to this problem. “The Napster-Bertelsmann deal might only serve as a stopgap” (The Napster Deal), but that might be good enough. There is no solution known yet that would preserve copyright protection in this age. The best alternative is to support copyright holders but still leave room for technological development. The idea of support for copyright holder and room for technological development is exactly what the Napster-Bertelsmann deal promises (The Napster Deal).

To conclude, Napster was once a service that allowed people to download songs and music and did not promote or ban the burning of homemade compact discs for free. The advances in
Napster soon will require a fee for the service that would then please the music industry. The uses of Napster vary. Some use it just to listen to songs on their personal computer, however there are some that burn the compact discs and sell them, which is illegal, and that breaks copyright laws. In the end some people use Napster legally and some use it to make money. The control of Napster will produce a harmony between the music industry and the people who use Napster, so I say I am all for Napster and hope it is not shut down and I wish the creators good luck.


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