File mp3 split

Editor's note: This article has been split into two parts. The first covers the legal controversy over file sharing. The second, to be published in the December/January 2004 issue of the Bulletin, covers other critical developments in e-copying.

In previous issues we surveyed some of the critical legal and policy developments in the world of records and information management (Bulletin, June/July and August/September 2003) - a key concern for every business whether directly focused on the task of homeland security or more generally contributing to our national economic interests. Today we continue our survey of cutting-edge developments of interest to information professionals with a focus on the most current intellectual property issues - the ultimate business asset in our information age. As with our previous articles, we also provide recommendations for management steps as well as additional research and sources for maintaining currency in this rapidly developing arena. Especially critical for every business and every individual is our discussion of potential and almost certain liability for infringement given the proliferation of peer-to-peer (P2P) network connections in the corporate environment and among home users.

The Contest Over Intellectual Property Rights

Twenty-five years ago, perhaps even 10 years ago, intellectual property law in general and copyright law in particular were of importance to information professionals but were relatively static from legal and policy perspectives. But more recently, our information age and information economy have propelled this subject to extreme importance and exponential change - in large part because technology has vastly altered the medium of intellectual property. The result has been efforts by millions to gain access to intellectual property on their terms - such as unauthorized electronic sharing of copyrighted music - and, in response, by business to protect their content by increasingly aggressive tactics.

In response to these drivers, the Computer Science and Telecommunications Board (CTSB) of the National Academies of Science issued its seminal report in 2000 - The Digital Dilemma: Intellectual Property in the Information Age. The study was predicated on the truism that the very technologies underlying the information age and providing extraordinary levels of access to information were also greatly enhancing infringement. As a result, the CTSB concluded that our current intellectual property laws - developed in the physical world of paper and tangible goods - simply did not work well in the digital world. Although the CTSB offered many thoughtful proposals, the approach of content providers has changed little. Indeed positions appear to have hardened with industry demanding greater control in a multiplicity of ways and users fearing that traditional fair use concepts will be eroded if not eliminated. And thrust into this contest were the courts and the Congress as they have struggled to address this tsunami of transformation.

As information professionals, we have a primary responsibility for understanding these rapid developments and shaping the underlying policy debates. For example, how has the electronic environment changed the basics of established copyright law? Should it? How is the Digital Millennium Copyright Act (DMCA) being used - as expected by Congress or in unforeseen ways? What are the rules for public domain today for published and unpublished materials since the Supreme Court has now upheld the Copyright Term Extension Act. And what does the TEACH Act mean for me? These are some of the many questions we will explore.

E-Copying - New Technology Does Not Change Established Law

Where previously there were photocopy machines and singleton copies there is now electronic reproduction with unlimited copies. But from a legal perspective, electronic copying is simply traditional infringement with new tools, and a number of litigations have confirmed that Cyberspace does not change traditional law. The most visible case evidencing this truism was A&M Records, et al. v. Napster, filed in December of 1999 in federal court in San Francisco by a number of record companies against the Internet company that provided a frequently used search tool for locating MP3 music files on the PCs of other, individual Internet users. As we know the defendant did not itself provide or host music files and the suit was therefore based on the allegation that its service facilitated copyright infringement and that it was therefore liable under the established doctrine of contributory infringement.

Initially, on July 26, 2000, following detailed hearings and consideration, the district court granted a preliminary injunction on the grounds that consumers who use Napster service and software to exchange sound files containing copyrighted musical recordings are engaged in direct copyright infringement and that Napster itself is liable for contributory infringement as well as vicarious infringement. However, two days later, the U.S. Court of Appeals for the 9th Circuit granted a stay nine hours before Napster was to shut down - finding that Napster's appeal "raised substantial questions (on) both the merits and the form of the injunction" and setting a schedule for expedited consideration. That followed in October 2000 with, generally considered, critical questions posed to the record industry lawyers. At the same time, the U.S. Copyright Office filed an amicus brief arguing, in part, that the Audio Home Recording Act was not a relevant defense.

But predictions of decisions based on factors such as critical questioning by appellate judges are notoriously unreliable - on February 12, 2001, the 9th Circuit affirmed the decision of the trial court framing the following issues and holdings and providing us important guidance for the future.

Is there direct infringement by the individual users of Napster or do they have a valid defense such as fair use? The answer was direct infringement given the four statutory fair use factors. First, as to "purpose and character of the use," the copying was not transformative and was commercial in nature given the scope and objective (i.e., "to save the expense of purchasing the authorized copies"). As to "nature of the use," the works are creative and thus closest to core protection and furthest from a finding of fair use. As to "portion of use," the works were copies en toto and in massive or "wholesale" quantities. And as to "effect of use on market," there was material impact given expert testimony; and, in any event, a lack of harm to an established market is not the only issue since harm can come from preventing plaintiffs' development of a secondary electronic market for their goods.

If the individual users are liable, then is Napster liable under a theory of contributory infringement or vicarious infringement? The answer was "yes" to both questions. First, contributory infringement requires a finding of "...knowledge of the infringing activity and personal conduct that encourages or assists the infringement." Here, Napster had both actual and constructive knowledge that its users exchanged copyrighted music. Moreover, the Sony decision is of no use given Napster's actual specific knowledge; the Sony court had refused only to impute knowledge given the potential of the equipment to infringe. Second, vicarious infringement requires a finding of "...the right and ability to supervise the infringing activity and also a direct financial interest in such activities." Here, Napster has the ability and authority to block infringers but only a limited ability to identify copyrighted information - it does not read the contents of the MP3 files and can identify copyrighted material only by the "titles" as listed by its users. It also has a financial interest since the infringing material "acts as a draw." Given the limits on Napster's ability to identify infringing material - and the equal ability of the copyright holders to do so - the Court found that this ground required modification of the injunction to require identification by the copyright holders but then to require resolute remedial action by Napster.

Does the Audio Home Recording Act apply to this case? The answer was "no" inasmuch as computer hard drives are not defined in the Act as "digital audio recording devices" and the MP3 recordings on computer hard drives are not defined as "digital music recordings."