A Delicate Balance   

The Napster ruling underscores the importance of protecting both the free flow of ideas and copyright.

Go on, admit it.

You, or someone you love--perhaps that teenager upstairs--has downloaded digital copies of copyrighted music from the Internet using the Napster system. And what a great system it is, allowing you to search for MP3 music files provided by other registered Napster subscribers, and to transfer and copy them to and from your own computer for free.

Maybe you've felt a little guilty about doing it. Or perhaps, like the millions of users who have visited Napster's Web site since its inception in 1999, you believed that you were somehow striking a blow for free expression or, at the very least, that what you were doing is protected by the "fair use" exception to the federal copyright law.

If so, the 9th U.S. Circuit Court of Appeals disabused you of that in February. The three-judge panel ruled unanimously that Napster users who download files containing copyrighted music violate the record industry's exclusive right to reproduce those musical works. Users who upload copyrighted file names to Napster's search index infringe on the industry's exclusive distribution rights. This means that Napster can be stopped from helping with copyright infringement.

But doesn't the First Amendment trump the record industry's rights to the music? In a word, no. Copyright isn't merely codified in federal statutes--it is enshrined in the Constitution. The rationale is that creators and owners of artistic works must be able to control their distribution and sale. Otherwise, they will have no incentive to produce them.

Fair use is an exception to that rule, but the court here found that what most of Napster's subscribers were doing wasn't fair use. Instead, the court said, "Napster users get for free something they would ordinarily have to buy." Napster "materially contributed" to this practice by providing the site and software to permit that infringement. As Circuit Judge Robert R. Beezer wrote, "Turning a blind eye to detectable acts of infringement for the sake of profit gives rise to liability."

But there's a loophole in that ruling, and it lies in the word "detectable." The panel recognized that Napster cannot be expected to police the files stored on the computers of its individual subscribers, nor can it be forced to disable access to infringing files if it has not first received adequate notice from the rightful copyright owner.

That aspect of the 9th Circuit's ruling is similar to one issued by the 4th U.S. Circuit Court of Appeals just a week earlier. That case involved a copyright infringement claim brought by ALS Scan, a producer and marketer of "adult" photographs, against RemarQ Communities Inc., an Internet service provider. RemarQ had refused to drop two newsgroups that, ALS Scan claimed, illegally posted its copyrighted photographs.

A federal district court in Baltimore dismissed the suit, finding that ALS Scan had failed to provide RemarQ with sufficient descriptions of the infringing material as required by the Digital Millennium Copyright Act, the federal law enacted in 1998 to deal with the unique copyright issues posed by the Internet. But the 4th Circuit reversed, finding that ALS Scan's notices were detailed enough to alert RemarQ to the problem. It sent the case back to the district court for trial.

The 9th Circuit also sent the Napster case back, to U.S. District Judge Marilyn Patel, directing her to tinker with the preliminary injunction that she originally issued last July. In early March, Patel placed the burden of notification on the record companies, taking into account the possibility that Napster can be used for non-infringing purposes. "The mere existence of the Napster system," the panel said, is not in and of itself a violation of anyone's copyright.

Although Napster is working on a settlement, the immediate reaction in the music industry was that the free service would have to shut down. They claim that developing technology to screen out copyrighted works will be difficult, if not impossible.

The implications of this ruling go far beyond Napster. The challenge will be to strike the delicate balance between encouraging the development of technology that facilitates the free exchange of ideas, and protecting copyright holders' exclusive rights in their creative material. If the courts get it wrong, Internet service providers will be tempted to deny access to systems like Napster, and even to newsgroups like the ones carried by RemarQ, for fear that they might be found liable of copyright infringement themselves.