Excerpt from
Lawrence Lessig, The Future of Ideas
(New York: Random House, 2001), Copyright by Lawrence Lessig
Intended for Limited Use of
University of Iowa College of Law
Cyberspace Law Seminar 2002
Seminar Students
[Nicholas Johnson, January 26, 2002]
NOTE: Page breaks (e.g., [193]) and endnotes (e.g., [30]), are indicated in brackets.

[192]

[NJ Background Note: By starting at the top of p. 192 we come into the middle of the story of "iCraveTV" in a transition into Lessig's comments about MP3.com and Napster. iCraveTV was a Canadian company providing streaming television over the Internet – something legal in Canada but not in the U.S. American broadcasters protested that local, U.S., copyright law should govern and that iCraveTV should not be permitted to serve the U.S.]
 

But when it comes to copyright law, we become like the Chinese, or Germans, or French. With respect to law, we too want to insist upon local control – especially because local law here is so strong. So with respect to copyright law, we push local control. And the result is the birth of technologies that will facilitate better local control.

iCraveTV, for example, promised the court that it would develop technology to make it possible to block out everyone except Canadians. Jack Goldsmith and Alan Sykes have described the growing collection of technologies that will achieve the same end.[26] These suggest that the future will be very much like the past: life on the future Internet will be regulated locally, just as life before the Internet was regulated locally.

How we will get to that future world was one point of Code and Other
Laws of Cyberspace [an earlier book of Lessig’s]. But for now, the significance of iCraveTV is again the attitude it evinces. Though there was no proof that any revenue would be lost by virtue of people streaming content through their TV, and though Canadian law was assumed to protect this behavior in Canada, the control industry [Lessig’s term for the global media conglomerates using, and expanding, copyright law protections in ways they believe will enhance their profits] raced to court to shut down the alternative. The courts complied.[27]

MP3

IN CHAPTER 8, I told the story of My.MP3 – an innovative new service whose users could "beam" the content of their CD collection to a Web site and then get access to their music at that Web site. This service was provided by the company MP3.com. To provide access to this music, MP3.com had to purchase a very large collection of CDs. It then copied those CDs into its computer database. When a user of My.MP3 placed a CD into the Beam-it program, the system identified whether that CD was in MP3.com's library. If it was, then that user account got access to the content of that CD whenever he or she accessed the account.

Ten days after launching the service, MP3.com received a letter from RIAA [NJ Note: RIAA is the trade association representing the recording companies: the Recording Industry Association of America] attorneys.[28] Its service was a "blatant" violation of copyright laws, said the letter, and MP3.com should take the service down immediately. MP3.com refused, and the lawyers did what lawyers do when someone refuses: they filed suit in U.S. district court, asking for over $100 million in damages.[29]

The RIAA lawyers had a point, if you looked at the statute quite literally. MP3.com may have purchased a bunch of CDs, but it had clearly "copied" these CDs when it created its single, massive database. There was, on its

[193]

face, then, an unauthorized copy of each of these CDs, and the question became whether or not this copy was nonetheless fair use.

Applying the ordinary standard for fair use, the RIAA argued that it was clearly not. This was for a commercial purpose. Thus, fair use was not a defense, and the blatant and willful copying was then a prosecutable offense. When lawyers have such a clean, slam-dunk case, they get very, very sure of themselves. And the papers in the My.MP3 case are filled with outrage and certainty.

But when you stand back from the outrage and ask, "What's really going on here?," this case looks a lot different. First, as should be clear, My.MP3 was not facilitating the theft of any music. You had to insert a real CD into your computer before you could get access to the copy on MP3.com's server. Of course, you could borrow someone else's CD and hence trick the system into thinking you were the rightful owner of the CD. But you could borrow someone else's CD and copy it anyway. The existing system permits theft; My.MP3 didn't add to that.

Second, it should be fairly clear that this service would increase the value of any given CD. Using this technology, a consumer could listen to his or her CD in many different places. Once the system recognized your rights to the music on the CD, the system gave you those rights whenever you were at a browser. That means that the same piece of plastic is now more valuable. That increase in value should only increase the number of CDs that are purchased. And that increase would benefit the sellers of CDs.

Third, it is also fairly clear that exactly the sort of thing that MP3.com was doing could easily have been done by the consumers themselves. Any number of companies have created free disk space on the Internet. Anyone could "rip" his or her CDs and then post thetp to this site. This ripped content could then be downloaded from any computer. And this download
could be "streamed" to be just like the service MP3.com was providing.

The difference is simply that users don't have to upload their CDs. On a slow connection, that could take hours; on a fast connection, it still can be quite tedious. And a second difference is that the duplication that would be necessary for everyone to have his or her CDs on-line would be much less. Ironically, by shutting down MP3.com, the RIAA was inducing the production of many more copies of the very same music.

Thus the battle here was between two ways of viewing the law – one very strict and formal and the other much more sensitive to the consequences of one outcome over the other. And the claim of MP3.com was simply that the

[194]

court should consider the facts in the case before it shut down this innovative structure for distributing content. MP3.com was arguing for a right to "space-shift" content, so that a user's content could be accessible anywhere.
But the court had no patience for MP3.com's innovation. In a stunning decision, the court not only found MP3.com guilty of copyright violation, it also found the violation "willful." And rather than giving nominal or minimal damages for this violation, the court imposed $110 million in damages.

For experimenting with a different way to give consumers access to their data, MP3.com was severely punished.

Napster

I DESCRIBED the technology that is Napster in chapter 8. The essence was this: Napster enables individuals to identify and transfer music from other individuals. It enables peers, that is, to get music from peers. It does this not through a completely peer-to-peer architecture – there is a centralized database of who has what, and who, at any particular moment, is on-line. But the effect is peer-to-peer. Once the service identifies that X has the song that Y wants, it transfers control to the clients of X and Y, and these clients oversee the transfer. The Napster server has just made the link.[30]

But that was enough in the eyes of. the recording industry. And with predictably lightning speed, it filed suit here as well. Napster was just a system for stealing copyrighted material. It should, the RIAA demanded, be shut down.

Against the background ofMP3.com, Napster does look a bit dicey. After all, the service at issue in MP3.com was a service to give individuals access to content that they presumptively had purchased. On Napster, the presumption is the opposite. There seems little reason for me to download music I already own.

But even that is not quite correct. I've been a Napster user, though I am not an imaginative user, and I am generally quite lazy. I know exactly what I want to hear, and I know that because I own the music already. But it is easier simply to download and play the music I own on Napster than it is for me to go through the CDs I own (most of which are at home, anyway) and insert the one I want in a player. Thus, while I won't say that none of the music I have listened to on Napster is music I don't own, probably only 5 percent is.

That the user owned the music, however, didn't stop the court in the

[195]

MP3.com case. And the assurance that users were only downloading music
they already owned was not likely to satisfy the RIAA. Most people, the RIAA argued, used Napster's technology to "steal" copyrighted work. It was a technology designed to enable stealing; it should be banned like burglar’s tools.

Copyright law is not new to a technology said to be designed solely to facilitate theft. Think of the VCR. The VCR records content from television sets. It is designed to record content from television sets. The designers could well have chosen to disable the record button when the input was from a TV. They could, that is, have permitted recording when the input was from a camera and not a TV. But instead, they designed it so that television content could be copied for free.

No one in the television industry gave individuals the right to copy television content. The television industry instead insisted that copyring television content was a crime. The industry launched a massive legal action against producers of VCRs, claiming that it was a technology designed to enable stealing and that it should be banned like burglar’s tools. As Motion Picture Association of America president Jack Valenti testified, the VCR was the "Boston Strangler" of the American film industry.[31]

This legal campaign ended up in the courtroom of Judge Warren Ferguson.[32] After "three years of litigation, five weeks of trial and careful consideration of extensive briefing by both sides,"[33] the trial court found that the use of VCRs should be considered "fair use" under the copyright act. The court of appeals quickly reversed, but the important work had been done in the trial court. The judge had listened to the facts. Sony was permitted weeks of testimony to demonstrate that, in fact, the VCR would not harm the industry. Sony was permitted, in other words, to show how this technology should be influenced by the law.

These findings were critical in the appellate review of the case. And when the case finally reached the Supreme Court, it gave the Supreme Court sufficient ground to understand matters in a balanced and reasonable way. Though the VCR was designed to steal, the Court concluded that it could not be banned as an infringing technology unless there was no “potential” for a "substantial noninfringing use."

Potential. For a substantial noninfringing use. Notice what this standard does not say. It does not require that a majority of the uses of the technology be noninfringing. It requires only that a "substantial" portion be noninfringing. And it does not require that this noninfringement be proven today. It requires only that there be a potential for this noninfringing use. As long

[196]

as one can demonstrate how the technology could be used in a way that was
legitimate, the technology would not be banned by a court.

The Supreme Court's test is rightly permissive. The tradition of American law is not to ban technologies, but to punish infringing use. And that test should have had an obvious answer in the context of the Napster case. Here there are no doubt lots of infringing uses. But there are also lots that under any fair estimation constitute fair or noninfringing use. Music that has been released to the Net to be freely distributed is freely distributed through Napster. That use is clearly noninfringing and is substantial. Music that has fallen into the public domain is available on Napster. That use is clearly noninfringing, and is substantial. And lots of recordings that are not music –
lectures, for example – can be made available on Napster. The Electronic Frontier Foundation has a series of lectures that are traded on Napster; they are offered as content that is free.

But when this claim was made to Judge Marilyn Hall Patel in California she, unlike Judge Ferguson in the Sony case, had no patience for the argument. Without a trial, and with barely contained contempt, she ordered the site shut down.

Within thirty-six hours, Napster attorney David Boies had received a stay
of that order from the Ninth Circuit Court of Appeals. And after hearing arguments in the case, that court affirmed much in the injunction of Judge Patel.[34] The court did, however, make one important modification: Napster was not responsible for contributory infringement unless the copyright holder made Napster aware of the violation. Napster therefore wasn't closed down by the court; it wasn't required to become the copyright police. But it was required to remove music posted contrary to the copyright holder's wish. So, like the circuits of the computer Hal in the movie 2001, the music in the memory of the Napster system will be slowly turned off, as copyright holders will demand the right to control the sharing of their content.


Endnotes

26 See Jack L. Goldsmith and Alan O. Sykes, 'The Internet and the Dormant Commerce Clause," Yale Law Journal 110 (2001): 785. See also Lawrence Lessig and Paul Resnick, "Zoning Speech on the Internet: A Legal and Technical Model," Michigan Law Review 98 (1999): 395

27 A very similar point is made by Denise Caruso. See "Case Illustrates Entertainment Industry's Copyright Power," New York Times, March 13, 2000, available at http://www.nytimes.com/Iibrary/tech/00/03/biztech/articles/13digi.html. As Caruso writes, "The most chilling aspect of the case. . . was [iCrave1Vs] response. That is, [it] did not argue the legality of the action against [it], but instead responded by inventing a technology that could stop the discussion dead in its tracks." Caruso continues: "Many people are likely to object strongly to [the site's] balkanized Internet. . . such a system would devolve the Internet into a model very much like the restricted, centralized control of cable television. That is a business model with which the $65 billion media and entertainment industries – the very ones that nearly sued the pants off [of the site] – are quite familiar." Ibid.

28 See Press Release, Recording Industry Association of America, RIAA Statement Concerning MP3.Com's New Services, January 21, 2000, at http://www.riaa.com/PR_Story.cfm?id=47.

29 The court's ruling in the case determines that the damages are $25,000 per CD. This leads to possible damages of $118 million if the total is determined to be at least 4,700 CDs. UMG Recordings, Inc. v. MP3.Com, Inc., No. 00 CW. 472(JSR), 2000 WL 1262568, at *6 (S.D.N.Y., 2000).

30 See, e.g., Amy Harmon, "Powerful Music Software Has Industry Worried," New York Times, March 7, 2000, available at http://www.nytimes.com/Iibrary/techIO01O3/biztech/articles/07net.html; Karl Taro Greenfeld, "The Free Juke Box," Time (March 27, 2000), available at http://www .time.com/time/everyone/magazine/sidebar_napster .html; Andy Oram, "Gnutella and Freenet Represent True Technological Innovation," May 12, 2000, at http://www.oreillynet.com/pub/a/network/2000/0 5 /12/magazine/gnutella. html; also Peer-ta-Peer: Harnessing the Benefits of a Disruptive Technology, Andy Oram, ed. (Beijing and Cambridge, Mass.: O'Reilly, 2000).

31 Home Recording of Copyrighted Works: Hearing on H.R. 4783, H.R. 4794, H.R. 4808, H.R. 5250, H.R. 5488, and H.R. 5750 Before the Subcomm. on Courts, Civil Liberties, and the Admin. of Justice of the Comm. on the Judiciary, 97th Cong. (2nd session), 8 (1983) (testimony of Jack Valenti, president, Motion Picture Association of America, Inc.). See also Sam Costello, "How VCRs May Help Napster's Legal Fight," Industry Standard, July 25, 2000, available at http://www.thestandard.com/article/
0,1902,17095,00.html.

32 Universal City Studios, Inc. v. Sony Corp. of Am., 480 F. Supp. 429, 432 (C.D. Cal., 1979) (district court opinion by Judge Ferguson).

33 Ibid., 432.

34 A&M Records, Inc. V. Napster, Inc. 239 F. 3d 1004 (9th Cir., 2001).