Napster plays dodgeball with music biz
Not anymore.
Napster Inc., a small start-up, gives music lovers a chance to chat online and browse each other's collections of MP3 music, the defacto standard for high-quality audio on the Internet.
The feature that has caused traffic to the site to overwhelm the company's servers, however, is Napster's ability to let chatters trade their MP3 files with each other.
"It has been hugely successful," said John Fanning, CEO of the Hull, Mass.-company. "We have doubled in size for the past five days. Our goal eventually for our users is to be unaffected by the growth."
Digital dodgeball
While users of the service passing back and forth copyrighted music may be breaking the law -- indeed, today people can exchange files on chat groups. Napster could sidestep any prosecution.
The recently passed Digital Millenium Copyright Act of 1998 allows search engine companies to link to MP3 files. However, if notified that the link points to copyrighted music, the search company must remove the link immediately.
"Anyone that contributes to the infringement of a copyright can be prosecuted," said Bob Kohn, chairman and founder of Internet music label Emusic.com Inc. and music licensing expert. "Someone that has a search engine that links to a (copyrighted) MP3 file can be accused of contributory copyright infringement."
The out for search engines like Scour.net, Lycos and Napster? "If the search engine removes the file immediately upon notice, then they are safe," he said.
A legal tightrope
Fanning stressed that he is intent on playing within the law. In fact, the company chief has hired the firm of Wilson, Sonsini, Goodrich & Rosati to advise the company and deflect the inevitable legal crossfire.
That same firm successfully staved off a lawsuit filed by the music industry against Diamond Multimedia Systems Inc. (Nasdaq:DIMD), the maker of the Rio MP3 player.
Coloring within the legal lines is not all that Napster is doing. The company is also using technical means to separate itself from its users' conduct. The service is structured so that none of the content -- copyrighted or otherwise -- is stored or cached on the company's servers.
"There is no copyrighted music that crosses the Napster network," said Fanning. "We are about building music communities, not stealing."
A fight brewing
Such semantics may not impress the music industry defender, known as the Recording Industry Association of America, however.
"The RIAA has said that law works," said Adam Fowler, director of strategic planning for the Electronic Frontier Foundation's Consortium for Audiovisual Free Expression, or CAFE. "And they haven't been shy. They've used a variety of legal methods to enforce copyright."
While the RIAA's offices were off on Friday and its staff not available for comment, Emusic.com's Kohn thinks that Napster could be the testing case for the recently passed copyright law.
"A large record company has several thousands artists," he said. "(Under the law,) they can provide a notice and takedown request with all the links that were taken from Napster's search engine." For Napster, that means it would have to block certain song titles from appearing or the offending user from getting on the service.
Still, that remedy has obvious flaws. Users could easily rename their songs to something less obvious and then let a fellow chatter in on the secret. That could slow down any attempts to find illegal links and refocus the music industry's ire, not on Napster, but on the consumer.