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.


Napster The problems faced by Napster and how it affects us. INTRODUCTION Shawn Fanning let his closely cropped coiffure grow a bit shaggy, so his friends started calling him nappy. That evolved into a new nickname, Napster, which became the Internet handle he used in chat rooms. After sharing tips on guitar playing, Fanning told two cyberpals about a revolutionary software program he was working on. Encouraged by his new friends, he wrote the program and the idea attracted a sizable cash donation from a family friend.

So he quit college, moved from Harwich, Mass., to Silicon Valley, and started a company together with his two buddies. That was sevral months ago. Today, 19-year-old Fanning and his company, Napster, have become the Internet’s latest one-hit wonder. Hundreds of thousands of college students and music fans have downloaded the firm’s free software, which allows users to swap MP3 songs, the Net’s most popular digital music format. Napster, whose latest software will be released this week, has seen its user base grow by as much as 25 percent a day. Says Napster CEO Eileen Richardson, We see ourselves as the MTV of the Internet, But Napster has made some powerful enemies in its brief existence. Musicians and record companies accuse it of creating an online den of thieves.

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Last December, the Recording Industry Association of America (RIAA), representing 18 record labels, sued Napster for copyright violations, seeking to shut it down and collect more than $100 million in damages. Rapper Sean Puffy Combs says Napster abuses his artists. And in the past two months, at least 50 universities have blocked students from accessing Napster, saying it strains campus computer systems. All the outrage is a result of Napster’s unique design, which fosters music sharing but also hogs bandwidth. The company doesn’t own or sell any music. Its software merely acts as a digital matchmaker, allowing people to trade MP3 songs.

Napster peeks into a user’s hard drive and publishes a list of all the songs it finds there onto a central database. To locate a tune, a user enters the name of an artist or a song to see if anyone else on the network has it. If so, they can download it at the push of a button. In this way, Napster has created the Net’s largest music library. Now all of us have downloaded music of the internet and most of us have also used Napster but as we all know Indiana University is one of the fifty odd universities that have banned Napster on campus servers.

This is a situation that affects us directly as universitys like Duke,Stanford and M.I.T have refused The R.I.A.A. requests to ban Napster. Thus according to me we should all be better informed of this situation to know why we are being deprived of such a cutting edge program. The Napster case is very important not only because people wont be able to download free music if its ruled illegal, but because the case will serve as a major guide for the future. It is a foreshadowing of the future. As technology becomes more and more advanced, we will constantly be faced with similar questions. The RIAA announced in December they would sue napster. Explain reasons.

1.Napster is considered pirating software. It can allow anyone access to copyrighted files. 2. Although all users will not abuse the system and make pirated cds some will. Therefore opposers of napster wish for a complete shutdown of the site. 3.

Some who oppose merely wish for napster to exist in a way that will not allow pirating. C. Napsters is banned on the Indiana campus after a request from the RIAA and Heavy Metal band Metalica. I.U. claims that napster is using up too much of its bandwidth.

1. Indiana University bans napster controversially even though many students are against it. I.U. students say that the ban affects their freedom of music and exposure to the Internet revolution. 2. Give out information from napster website and also list the reactions of other major universities for and against the ban. 3. Napster may have been banned but there are still other identical programs, which are benefiting from this ban (e.g. Scour exchange).

D. Discuss how Napster can be used to be a profitable unit for the music industry if given the chance. 1.State studies in business week and wired which state that if napster charges a monthly fee between 1 or 3 dollars then they can earn up to half a billion dollars. 2.Napster is one of the most popular programs for young teenage computer users and is growing in popularity every day. 3.

Napster is a great way for upcoming artists to spread their music. Thus this program is feeding the music industry with good information on new artists and is also helping the artists talents to be recognized. Conclusion 1. Napster is a product of new technology, which has no guidelines in our current system of laws. Current laws do not prohibit technology like Napster directly, but many question whether it is legal.

2. Napster can be still used in I.U. There are programs like Napigator that bypass I.U.s server thus enabling the use of Napster. 3. Will state how important the outcome of the court ruling will as it will change the legal standings of a lot of internet companies and will be a precedent for such a law in the internet era.

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