I. Introduction

The music industry has changed in the last century, and so has copyright. [1] Music used to be about compositions, sheet music, and public performances for profit.[2] Copyright law protected musical compositions but provided no protection for recordings. Even compositions were subject to a compulsory license that allowed others to pay for the right to perform or record the work.[3] It was 1971 before Congress provided copyright protection for recordings themselves, and even then protection was more limited than virtually all other forms of copyright. [4] The music business flourished in those times.[5]

When digital copying came along, the industry should have felt uneasy.[6] Digital copies are not only perfect in quality, but quickly and easily produced.[7] The Internet, or rapid file sharing, then became a reality. [8] Soon, information could be retrieved from anywhere in the world using the [p185] Internet. [9] Then came high speed Internet connections and file compression technologies such as MP3.[10] Suddenly it was very easy to transfer large files across the Internet in a short time.

The online music file sharing industry was born as Napster took advantage of these advances in technology.[11] Napster’s system allowed anyone with a connection to the Internet the ability to share files, such as specifically compressed music files in MP3 format, with anyone in the world. [12] With a growing number of users, Napster became the popular way to share music without paying for it. [13] The recording industry took note and filed suit.[14] The industry won the case against Napster on a theory of indirect copyright infringement. [15] That decision was based heavily upon the fact that Napster used a centralized network architecture giving it control over its users. [16] Therefore, when KaZaa, a new online file sharing system with a non-centralized architecture that did not allow user control was created, the recording industry lost the next case.[17]

Afterwards, the recording industry lost an opportunity to become a commercial partner in the domain of online music file sharing by failing to license the Napster technology. With Napster’s centralized file sharing architecture, the recording industry’s online distribution of music could have become the preferred method for online music file sharing. The centralized server Napster model would have provided the best security and control for the music industry in the online distribution of music files. The snowball effect of licensing Napster would have made other technologies unattractive to file sharing users. In addition, file sharing users were already familiar with the look and feel of the Napster software.

Instead, the recording industry won the battle against Napster but lost the file sharing war. The failure to license Napster while demanding an injunction spawned new methods of online file sharing. KaZaa and the fully distributed network architecture, pure peer-to-peer (P2P), became the pervasive architecture for online file sharing in the absence of Napster.[18] [p186] Unfortunately for the recording industry, courts did not view the P2P network architecture in the same way as Napster’s centralized network architecture (hybrid P2P), and consequently found the developers of the KaZaa technology not liable for copyright infringement. [19] Thus, the recording industry lost the war against KaZaa and today is forced to ferret out file-sharing individuals. Meanwhile, sales of new compact discs (CDs) are down in the last three years, since Napster came onto the scene, and the music industry is struggling. [20] Profits would not be down if the recording industry would have only licensed Napster and thus made it the preferred and legitimate file sharing technology.

Thus, the industry must now consider what solutions remain. The industry could find a way to come together and license all their copyrighted music works in a bundle through a compulsory licensing agreement. If continued, the current suits against selected direct infringers may prove to alienate the industry’s own customers. Another solution might be to pursue some technological protection that prevents users from violating copyright laws. Education of music consumers on the repercussions of file sharing would help. Cooperation with colleges could also be very effective, since music file sharing was born there.

Part II of this Article gives the background of the relevant copyright law and file sharing. The state and history of the law before Napster, after Napster, and up to and including Grokster (KaZaa) are discussed. Part III of this Article discusses the possible solutions for the recording industry. Possible solutions include licensing schemes, suits against direct infringers, and technological protections, consumer education, and cooperation with universities.

II. Background

It all started with the Internet.[21] With a stated goal and architecture supporting the easy transfer of files across a world wide network, Internet file sharing was born.[22] The history of file sharing and copyright law began before the proliferation of personal computers and computer networks in the early 1990s. In 1984, the U.S. Supreme Court found the manufacturer [p187] of a video cassette recorder, Sony, not liable for copyright infringement under a theory of secondary liability or indirect infringement.[23] In 1996, the U.S. Court of Appeals for the Ninth Circuit found a swap meet [24] operator liable for indirect copyright infringement associated with the sale of unauthorized sound recordings or bootlegged tapes.[25]

In 1999, U.S. Court of Appeals for the Ninth Circuit found the creator and operator of a music file sharing system, Napster, Inc., secondarily liable for the copyright infringing activities of Napster’s users.[26] In the summer of 2003, the U.S. District Court for the Central District of California found other file sharing system operators, including Grokster and KaZaa, not secondarily liable for the file sharing activities of their users based on a significant difference in the architecture of the Grokster file sharing system as compared to the Napster system. [27] Having lost the Grokster case, the Recording Industry Association of America (RIAA) initiated copyright lawsuits against the direct infringers, everyday file swappers.[28]

A. Copyright Law and File Sharing Before Napster

The Sony case is often cited in the history of copyright law and file sharing. For the first time, the U.S. Supreme Court applied a theory of indirect infringement in the analysis of alleged copyright infringement through the sale of a device capable of recording audiovisual works.[29] After Sony, the Fonovisa court further clarified the two theories of indirect infringement, contributory infringement and vicarious infringement, in the copyright infringement analysis of bootlegged tape sales at a swap meet. [30] [p188]

1. Sony

In Sony, the movie and television industry sued to enjoin Sony from selling the video tape recorder (VTR).[31] The movie industry argued that users of the VTR, who used it to record live broadcasts or movies, violated the exclusive right of copyright owners to reproduce their copyrighted movies or television shows.[32] Sony was therefore liable under theories of either contributory infringement or vicarious infringement, because Sony sold the device making the reproduction possible, according to the movie industry. [33] The Sony Court, however, held that because the VTR was capable of significant non-infringing uses, Sony could not be liable under either theory of indirect infringement.[34]

The Sony Court reasoned that a substantial number of copyright holders would not have objected to common practice of “time shifting” by VTR users. [35] Time shifting refers to the practice of recording a live television broadcast for the purpose of watching it later. [36] Most copyright holders in such television programs had no objection because the time shifting enlarged their viewing audience and had no effect on the commercial value of their copyrights. [37] Thus, the Sony Court found that the VTR was capable of substantial non-infringing uses. [38] Consequently, the manufacturer of new technology will not be held indirectly liable when the technology is capable of significant non-infringing uses.[39]

2. Fonovisa

In Fonovisa, the U.S. Court of Appeals for the Ninth Circuit clarified the concepts of vicarious and contributory infringement as applied to [p189] copyright law.[40] The Fonovisa court found the operators of a swap meet or flea market liable for the sale of counterfeit copyrighted recordings, in the form of bootlegged tapes, by vendors who rented space in the swap meet. [41] Swap meet vendors paid daily rental fees and customers paid admission fees.[42] Under either theory of indirect infringement, a plaintiff must first show direct infringement. [43] In this case, direct infringement was obvious, since vendors had made counterfeit recordings and sold them to the public.[44]

a. Vicarious Infringement

Vicarious infringement is found when a defendant has a right to control the infringing activity and a financial interest in such activity. [45] The Fonovisa court found vicarious infringement where the operator had a right to control the vendors and received a financial benefit from the sale of bootlegged tapes. [46] Operators had a right to control since they patrolled the premises, removed unwanted vendors, and controlled the access of customers. [47] Operators received a financial benefit in the form of daily rental fees, customer admission fees, and incidental payments for parking and food where the counterfeit recordings acted as a draw for swap meet customers.[48]

b. Contributory Infringement

Contributory infringement is found when a defendant has knowledge of direct infringement and materially contributed to the infringement. [49] The Fonovisa court found contributory infringement where the swap meet operators had knowledge of the bootlegged tape sales and materially contributed to those sales.[50] Operators had knowledge since police raided [p190] the swap meet and seized counterfeit recordings prior to the lawsuit. [51] Operators materially contributed when they provided support services[52] to vendors and failed to identify the infringing vendors upon request by police.[53]

B. Napster

In Napster, the U.S. Court of Appeals for the Ninth Circuit found the creator and operator of a revolutionary music file sharing system, Napster, Inc., liable for both contributory and vicarious infringement of copyrights in various music recordings. [54] Napster’s music file sharing system took advantage of a number of technological advancements relating to the transfer of files over the Internet.[55]

1. Overview of Advances in Technology and File Sharing Software

Today, advances in digital technology allow perfect copies of a copyrighted musical work to be quickly reproduced.[56] Music is commonly distributed via audio compact discs (CDs) containing relatively large digital audio files.[57] Advances in digital file compression, such as MP3, allow the compression of the CD audio files into much smaller MP3 files.[58] The compressed MP3 files use much less computer memory and are therefore easier to upload or download from the Internet. [59] Although the MP3 compression causes some minimal loss in sound quality, the format is popular because of the ease of use in file transfer over the Internet.[60] High-bandwidth connections to the Internet have also increased the ease with which users may transfer or share files over the Internet.[61]

[p191] A user who wants to share music may obtain MP3 files by either “ripping” a CD, the process of compressing CD audio files into MP3 files, or by downloading shared MP3 files, that have already been ripped, from the Internet through the use of file sharing software.[62] Once the user has some MP3 files stored on his hard drive, he may allow other users to download his stored MP3 files through the use of the file sharing software. [63] To find music files, a user will initiate a search of the file sharing system.[64] Once the search is complete, a list of files matching the user’s search criteria, like “Beatles,” is returned.[65] The user then selects which song or MP3 music file he wants and the download begins. [66] When the user selects a file to download, the Napster service communicates the hosts Internet address to his computer; this information allows him to connect with the host user in order to download the file. [67] In this arrangement, the host is the computer from which the desired file is downloaded.[68] Often, users may also engage in chat or browse each others MP3 files.[69]

Before the introduction of high speed broadband Internet connections, users logged onto the Internet via slow dial-up connections. [70] The transfer or sharing of files over these slow connections could take a very long time.[71] However, with both MP3 compression and the growing popularity of fast broadband connections, the amount of time required for file sharing was dramatically reduced. [72] As a result, music file sharing took off with Napster.[73]

2. Napster’s Technology

Napster, Inc. distributed MusicShare[74] software to its users for free download from the Napster web site. [75] The free file sharing software [p192] allowed a user to make available MP3 music files, on the hard drive of the user’s personal computer (PC), for download by other Napster users who were also logged-on the system.[76] The MusicShare software also allowed a Napster user to perform a search of the system to find MP3 files on another user’s PCs.[77] The searching user can then download those files via the Internet to his own PC hard drive for his personal use. [78] Most of the files shared on the Napster system were copyrighted musical works, yet Napster did not prevent the sharing of such copyrighted works.[79]

In order for a Napster user to share MP3 files, he had to designate a “user library” directory on the hard drive of his PC.[80] Then he logged onto the Napster system using a user name and password. [81] The Napster system then validated all MP3 files in the user library directory by checking to see that the files met MP3 format requirements.[82] If the MP3 files in the user library met validity requirements, then Napster servers stored the user designated filenames in a list of available MP3 files.[83] The actual stored MP3 files remained on the user’s PC, while the list of available files remained on Napster’s servers.[84]

The Napster system operated as a hybrid P2P network. [85] Napster’s centralized servers facilitated a Napster user’s search of the system.[86] Without Napster’s centralized servers allowing user searches, Napster users would not be able to share files and the system would not work.[87] In contrast, a pure P2P network would not require the services of a centralized server to facilitate any file transfer or sharing.[88] [p193]

3. Fair Use

As a defense to the allegation of direct infringement, Napster argued that its users were engaged in fair use of the copyrighted works. [89] Napster argued that its users were simply space-shifting music they already owned, or sampling music that they intended to purchase.[90] Space-shifting refers to the process of converting a CD the consumer already owns into MP3 format and using Napster to transfer the music to a different computer — from home to office, for example. [91] Napster argued that space-shifting was akin to time-shifting in Sony.[92] Napster argued that because these uses amounted to fair use, there was no direct or indirect infringement.[93]

In order to analyze fair use, the Napster court considered the four statutory factors: the purpose and character of the use; the nature of the copyrighted work; the amount and substantiality of the portion used in relation to the work as a whole; and the effect of the use upon the potential market for the work or the value of the work. [94] The Napster court found that downloading MP3 files did not transform the nature of the copyrighted work, that the use was commercial because users “get for free something they would ordinarily have to buy,” that users engaged in wholesale copying, and that this copying caused harm to the legitimate online distribution market.[95]

The Napster court also reasoned that Napster did not really offer a sampling service, because its users obtained a complete copy of a particular song and were able to keep the copy whether or not they purchased the album later. [96] The space-shifting argument was discredited when a survey showed that most Napster users did not own the music they downloaded.[97] The Napster court refused to extend the Sony doctrine because Napster users did not primarily use the service for noninfringing [p194] uses. [98] Having rejected Napster’s fair use defense, the Napster court considered claims of contributory and vicarious infringement.[99]

4. Vicarious Infringement

Plaintiffs, who were copyright owners of various music recordings (recording industry), brought suit against Napster for vicarious infringement. [100] The recording industry alleged that Napster had a right to control its file sharing system and had a financial interest in operating the system.[101] The recording industry argued that Napster’s users directly infringed the copyrights it held by violating at least one of the exclusive rights granted under section 106 of the Copyright Act.[102]

The Napster court reasoned that Napster could have blocked the infringing users, but failed to enforce their own stated policy. [103] The policy allowed Napster to refuse service to any user who violated the law.[104] Thus, the Napster court found that Napster had the right to control, but noted that such control was limited to the search index. [105] The Napster court also reasoned that because Napster derived significant advertising revenue directly from increases in its userbase, Napster had a financial interest in increasing the number of users, who were primarily sharing copyrighted files.[106] [p195]

5. Contributory Infringement

Plaintiffs also brought suit against Napster for contributory infringement. [107] The recording industry alleged that Napster had knowledge of the direct infringement of their copyrights and had materially contributed to the direct infringement.[108] The Napster court reasoned that Napster had actual and constructive knowledge of the sharing of copyrighted files because the recording industry had informed them of the presence of copyrighted files on the Napster system. [109] Also, a document written by a Napster company officer acknowledged that users were sharing copyrighted files. [110] The Napster court concluded that Napster materially contributed to the sharing of copyrighted files since, without Napster’s centralized searching index, users could not find and download copyrighted music.[111] The material contribution element depended heavily on the centralized architecture of the Napster system.[112]

6. Further Litigation

After the Napster litigation and injunction, the RIAA engaged in licensing negotiations with Napster.[113] However, no acceptable agreement was ever reached, and the recording industry ended up spawning its own file sharing endeavor, MusicNet, that was later investigated by the U.S. Department of Justice for antitrust violations.[114] MusicNet engaged in a [p196] licensing agreement with Napster.[115] However, Napster later argued the licensing agreement to be unduly restrictive and a misuse of the RIAA’s copyrights.[116] The courts agreed somewhat, but before Napster could pursue further litigation, it filed for bankruptcy.[117]

7. Advantages of Napster for the RIAA

The recording industry seemed to forget about all the advantages of licensing to Napster, and failed to make it happen. The Napster centralized index provided some control over the transfer or sharing of MP3 files. If the recording industry ever wanted to implement substantial control over the file sharing process, Napster’s centralized server architecture could allow that control. For example, the recording industry might want to limit the number of times a user could share a particular song.

Napster had a broad user base consisting of millions of users. The recording industry would not have to start from scratch to develop a user base or new software. The Napster software was already user tested and had achieved “mindshare.” Mindshare occurs when a user has become so comfortable with the look and feel of a software application that the use of the application becomes second nature. [118] The product that gets to the software market first has the distinct advantage of achieving mindshare before any other product. Consequently, software users may tend to expect the software in a given market to have the look and feel of the first product to hit the market. Most software analysts would agree that this is a tremendous advantage. By failing to license Napster, the recording industry lost out on this tremendous advantage and the opportunity to become the dominant supplier of the initial market.

C. Grokster

In Grokster,[119] the recording industry brought suit against three new file sharing software services, Grokster, Streamcast Networks, and KaZaa (Grokster).[120] Grokster’s file sharing services were based on the FastTrack [p197]networking technology, a pure P2P architecture. [121] The recording industry alleged that FastTrack technology had been designed simply to overcome the Napster decision and to fill the void left by Napster’s apparent demise. [122] The recording industry alleged Grokster to be liable for the copyright infringement by users of their file sharing software under theories of both vicarious and contributory infringement. [123] Defendant KaZaa claimed it was not subject to the jurisdiction of the U.S. District Court for the Central District of California. [124] However, the Grokster court disagreed and KaZaa’s motion to dismiss was denied.[125]

After finding jurisdiction, the analysis of the Grokster court closely followed the indirect copyright infringement analysis for file sharing software established in Napster.[126] As with all claims of contributory and vicarious liability, the Grokster court first considered whether Grokster’s users had directly infringed the copyrights of the recording industry. [127] After finding direct infringement, the Grokster Court applied the tests of contributory and vicarious infringement, while considering the new completely distributed or pure P2P architecture of the Grokster system.[128]

1. Jurisdiction and Enforcement

The Grokster court denied KaZaa’s motion to dismiss for lack of personal jurisdiction, lack of subject matter jurisdiction, improper venue, and forum non conveniens.[129] Prior to the case, KaZaa transferred ownership of key assets, including its Kazaa.com web site and its software, from its Netherlands corporation to Sharman, a “company organized under the laws of the island-nation of Vanatu and doing business principally in Australia.” [130] Despite this maneuver by KaZaa, the Grokster court held that the recording industry had satisfied its burden for specific [p198] jurisdiction. [131] KaZaa was found to have numerous contacts within the state of California, including providing software and end-user license agreements to at least two million California residents. [132] Thus, KaZaa was unable to escape the jurisdiction of the California district court.[133]

Although the Grokster court did not have to consider it, enforcement of the requested injunction would have been very difficult. [134] Given that KaZaa, along with other offshore P2P software providers tend to scatter their assets outside the United States, it would be very difficult for a U.S. court to find domestic assets to seize. [135] Even if a court ordered a shut down of an infringing site, making that happen might be next to impossible. [136] Where domestic assets are not available to use as negotiating collateral, shutting down a foreign based P2P software provider would almost certainly have to involve cooperation from the P2P’s home country. [137] However, when the home country does not see a problem with the P2Ps activities, such as KaZaa, then getting such cooperation is unlikely.[138] The U.S. government may even be reluctant to lobby on behalf of the recording industry, as the federal government has been under some pressure from certain powerful technology companies, including Apple Computer, Microsoft, Dell Computer, Cisco Systems, Hewlett-Packard, and Intel, that are upset with what they see as the recording industry’s attempt to control the progress of technology.[139]

2. Grokster System Architecture

After establishing jurisdiction, the Grokster court analyzed the Grokster system architecture. The Grokster court noted that Grokster’s file sharing system architecture[140] allowed operation of the system without any [p199] centralized file servers. [141] The Grokster court further observed that without the necessity for centralized file servers, Grokster’s users operated the system completely independent of Grokster.[142] Grokster’s users, therefore, needed no assistance after downloading Grokster’s free user software to transfer MP3 music files.[143]

The Grokster court also noted subtle differences in the origin and operation of the defendants’ file sharing systems.[144] The Grokster court found that all three defendants, Grokster, KaZaa BV, and StreamCast, distributed software originally based upon FastTrack technology. [145] However, defendant StreamCast’s file sharing software now employs the “open” or non-proprietary Gnutella technology. [146] Defendant Grokster continued to employ the proprietary FastTrack technology.[147]

3. Contributory Infringement

After the Grokster court considered the Grokster’s system architecture and origin, it addressed the contributory infringement claim. [148] The Grokster court found that defendants had knowledge of the infringing activities of their users but had not materially contributed to the infringing activities. [149] Unlike Napster, who provided the “site and facilities” in the form of centralized file servers, Grokster’s system operated without any such facilities.[150] Thus, the Grokster court considered that while enjoining Napster would prevent further file sharing in the Napster system, enjoining defendants would not stop file sharing on Grokster system.[151] Thus, the Grokster court concluded that the defendants were not liable for contributory infringement. [152] [p200]

4. Vicarious Infringement

The Grokster court also addressed the vicarious infringement claim. [153] The Grokster court found that defendants received a financial benefit but did not have a right to control their users. [154] Unlike Napster, who had the power to terminate infringing users and had done so, the defendants had no such ability. [155] The recording industry argued that the defendants could modify their system software to prevent or reduce infringement. [156] However, the Grokster court concluded that the defendant’s software was out of their control. [157] The Grokster court reasoned that defendant Grokster lacked control because it used proprietary software from a third party.[158] The Grokster court likewise determined that defendant StreamCast lacked control, because it used non-proprietary or open source software[159] and, thus, no individual entity had control over the source. [160] Without a right to control, the Grokster court concluded that Grokster was also not liable for vicarious infringement.[161]

5. Public Policy

The Grokster court acknowledged that the defendants may have intentionally designed their file sharing systems to avoid indirect copyright liability. [162] In the meantime, defendants profited from the growth of their file sharing systems.[163] The Grokster court, however, expressed a reluctance to expand copyright law without legislative guidance when technological innovations have changed the landscape of copyright law.[164] The Grokster court recognized that Congress is better suited to hear [p201] competing interests on new technology and to make any changes in the scope of copyright law.[165]

6. Disadvantages of Grokster for the RIAA

The recording industry missed the boat with the opportunity to license the Napster system to distribute music. In the absence of Napster, the pure P2P Grokster technology became the mainstream method of file sharing. However, the recording industry could not enjoin the operation of the Grokster system because of the change to a pure P2P architecture and the Grokster decision. So, the recording industry cannot force Grokster to license its copyrighted musical works. Even if the recording industry did license its music to Grokster, the P2P architecture would not allow for control over the system. The recording industry needed control to prevent system users from sharing copyrighted files, and the Napster system had such control. Now, the recording industry is left with some tough choices.

III. Solutions for the Recording Industry

The Grokster decision left the recording industry searching for solutions. One of the first solutions pursued by the industry was to go after direct infringers. The industry also considered licensing its musical works to various file distribution services. In the background of all the controversy and dispute was still the possibility of developing new technology to fully enforce the copyright laws (self-help measures). Other possibilities include consumer education and cooperation with universities.

A. Licensing Music to Distribution Services

There are many reasons why it makes sense for the recording industry to finally and fully license musical works to an Internet distribution service like Napster, KaZaa, or iTunes (Apple’s online music distribution service). Music consumers have been clamoring for this method of distribution since Napster and MP3 music compression arrived. This solution would allow artists to inexpensively distribute their music. Start up costs for new musical groups would also be lowered. However, the ease of distribution would come at the expense of recording industry control, which they have wielded throughout the history of the industry. At this point there may be no alternative, because consumers have shown that they have a great affinity for online music distribution and sharing. Consumers are altruistic [p202] and want to comply with copyright law given the opportunity. The recent success of some pay-per-download services reflects this thinking.

1. Apple’s iTunes

Apple began iTunes for MacIntosh (Mac) computers in March 2003. [166] The iTunes service is a legal music downloading service that has sold over ten million songs and has actually generated a profit.[167] The service charges users approximately a dollar per song downloaded.[168] Recently, iTunes released a version of their downloading software for Windows computers and more than a million copies were downloaded in the first three days. [169] Other pay-per-download services are following in Apple’s footsteps, including a resurgent Napster.[170]

2. The New Napster

Napster just launched its legal, pay-per-download service some weeks ago. [171] The cost per download will also be approximately one dollar.[172] Napster will be hoping to tap into the millions of users that have flocked to the iTunes service along with all other file downloaders who would like to conduct transactions legitimately and legally and comply with copyright laws. [173] Other legal downloading services include MusicMatch, Rhapsody, and BuyMusic.[174] However, all these downloading services suffer from a failure to provide all available songs because of limited licenses.[175]

3. Limited Licensing

The recording industry has many players and not all are in favor of online licensing. [176] The result is that each pay-per-download site has an incomplete selection of music.[177] So, not only does the pay-per-download music industry have to compete with free sharing services like Grokster [p203] (KaZaa), but they have less music to offer.[178] This problem is a result of the recording industry’s failure to organize and allow compulsory licensing for online music download sites. Without such agreements, the online music selection for pay-per-download sites will never be complete,[179] nor will they be able to fully compete with free file sharing services. [180] The recording industry will probably have to rectify this situation by developing some sort of compulsory licensing scheme to make the pay-per-download services competitive in the digital music market. In the meantime, the recording industry will continue to try to dissuade file sharing by filing suits against direct copyright infringers.

B. Lawsuits Against Direct Infringers

Beginning in 2003, the RIAA began a campaign to wipe out or discourage copyrighted file sharing by suing direct infringers.[181] This approach is, however, risky at best. The RIAA is essentially suing many of its own customers.[182] The result is bad publicity and alienation of the RIAA’s customer base.[183] At least some copyrighted file swappers will be deterred, but there are a great number that will not be.[184] Also, there are many swappers who live in other countries whose governments might not be vigilant in enforcing copyright laws for online file sharing.[185]

The RIAA has had difficulty in enforcing subpoenas to find copyrighted file swappers. [186] Internet service providers (ISPs) have been reluctant to give up subscriber information. Without the subscriber information, the RIAA cannot easily pinpoint who is swapping copyrighted files. The ISPs are reluctant to give up such information for fear of alienating their customers and have argued that Digital Millenium Copyright Act (DMCA) protects them from complying with any such subpoenas.[187] Although ISPs were ordered to comply with the subpoenas, they are appealing the decision. Several universities have also refused to [p204] comply with RIAA subpoenas, citing administrative rules on student privacy. Although the courts sided with the universities, campuses are stepping up ways to reduce copyrighted file sharing by their students. [188] Since suits against direct infringers have failed to stop or greatly reduce copyrighted file sharing, the RIAA might have to take matters into its own hands.

C. New Protection Technology or Self-Help Measures

The classic method of music distribution, the CD, offers no security or technological protection from ripping or sharing. The recording industry has attempted various self-help measures to stop or reduce copyright infringement, but have failed to come up with any effective universal solution. Such a solution would be difficult. However, other industries have resorted to self-help measures with some success. For example, the Audio Home Recording Act (AHRA) provides some protection for the DVD industry. Also, Microsoft limits installation of its XP software on any PC other than the PC originally purchased with the software installed.

The recording industry will have to consider technological protections and self-help as part of any licensing agreements. The industry is going to require that any licensed agents impose some sort of restrictions on the use of digital music. Otherwise, there will be no protection to keep users from buying a song for a dollar and sharing it with the world via KaZaa. The solution will probably be some proprietary compressed file format, like MP3, that can maintain copyright usage statistics. In order for the technological protection to work, software developers, like Microsoft, will have to be made aware of the chosen proprietary file format and write their media playing or file management software accordingly. Of course, any protection scheme can and probably will be subverted by hackers. However, by making the file format proprietary, the recording industry could probably legally protect against the distribution of hacker software. However, no one in the Internet community likes proprietary file formats. A better solution may start with education.

D. Education Campaigns

The RIAA has launched a campaign to educate consumers on the negative impact that unauthorized file sharing has on the music industry. [189] [p205] The RIAA web site now features anti-piracy quotes from artists representing a variety of musical genres, including one from rapper Eminem admonishing infringers. [190] A coalition named MUSIC (Music United for Strong Internet Copyright) also launched an education campaign to address Internet piracy on September 26, 2002.[191] MUSIC purchased full-page ads in newspapers to pose the question: “Who Really Cares About Illegal Downloads?”[192] Superstars such as Britney Spears and Elton John supplied the answers.[193] The initial launch was followed by a series of radio and television spots featuring famous recording artists speaking out against piracy. [194] In addition, the Copyright Society of the USA launched Copyright Awareness Week in 2002, a yearly event directed at school-age children.[195] The Society offered teachers handouts and lesson plans for the week for children of all ages.[196]

1. Do Consumers Know It Is Illegal

A spokesperson behind the consumer education campaign claims, “Our analysis shows that there’s still a significant percentage of people [who do not] realize it’s illegal, and when they do, they are willing to change their behavior.” [197] The Copyright Society, in turn, believes that young people know very little about copyright and that asking the public to respect copyright laws is futile until the public understands and appreciates these laws. [198] However, not everyone is convinced that education is a realistic solution for the recording industry.[199]

2. Ineffective Campaigns

Many consumers must be aware that what they are doing is illegal, considering the enormous publicity generated by high profile cases like [p206] Napster.[200] So any effective campaign will have to do more than simply exhort copyright law. Also, the existing campaign needs to be more thoughtful and realistic.[201] For example, MUSIC’s campaign compares illegal downloading with stealing music from the shelves of a record store.[202] This analogy of the tangible world of physical goods to the intangible world of the Internet may not be persuasive. [203] A consumer will not see the similarity between taking a CD from a store and pressing a button on his computer that downloads a file.[204] Thus, any such campaign that just equates online piracy with shoplifting may be ineffective.[205]

3. Campaign Improvements

Instead, a better thought out campaign might be more effective. [206] For instance, copyright owners should attempt to educate consumers on the economics of the music industry which would relate to the consequences of their file sharing activities. [207] Also, campaigns should rely less on famous artists and large corporations to spread the anti-piracy message and more on lesser known artists, songwriters and independent labels. [208] Consumers will have a better affinity for the small guy than the multi-millionaire artists that they see on MTV’s “Cribs.” It would be hard for a consumer to believe that such an artist would miss a few dollars for a song based on their extravagant lifestyles glamorized on MTV.[209]

E. Cooperation with Higher Education

The whole music file sharing craze really took off first at colleges, where software innovation met students who possessed a variety of music on CDs. Because music file sharing began at colleges, it may be the best starting point for attempting to control or reduce such sharing. The direct suits may intimidate some students, but university cooperation is essential to reduce illegal sharing. [p207]

1. Truce

Universities may be in the best position to coordinate or negotiate some sort of truce with the recording industry.[210] Students and industry may have to realize that some common ground must be met for the mutual love of music to continue.[211] The recording industry’s amnesty program might be the first step at that common ground, but at first strike appears a bit ingenious in implementation.[212] The program must give true amnesty. Perhaps a summit between both parties would help.[213]

2. RIAA’s Policemen

Many universities are, however, less than thrilled about becoming the recording industry’s policemen. Last year, the RIAA approached over 2000 university presidents and encouraged them to crack down on music piracy. [214] Since then, many universities have either threatened students with honor code sanctions or slowed down Internet connection speeds into dorm rooms in an effort to deter online piracy. [215] These actions, however, have not gone without protest. Educators are becoming “ambivalent about being forced into the role of intellectual-property police.”[216] They worry that fear of falling victim to a Napster-like lawsuit may be pushing some schools to “become so aggressive they’re compromising intellectual freedom on campus.” [217] As an adjunct professor at the University of Michigan’s Gerald R. Ford School of Public Policy, explained, “it creates a chilling environment when we want to have an environment of openness and creativity.” [218] Monitoring is not completely impossible, but it can be expensive, and its effectiveness is still debatable. [219] Most universities still refuse to monitor students, citing privacy concerns. [220] [p208]

3. University Developed Monitoring Software

Nevertheless, several schools have begun programs to monitor and discourage illegal file sharing. Penn State, Stanford, and others warn incoming students, as part of orientation, that trading music, films, and other copyrighted works over the Internet is a crime.[221] They also provide serious penalties from revoked network access to student honor code violations. Detection is made possible by newly developed software. For instance, the University of Florida (UF) has developed special software that allows the housing department to detect and stop file sharing among students in dorms.[222] Students caught in the act twice at UF are shut off for five days from network access. [223] Those caught a third time lose Internet privileges indefinitely.[224] Over the summer, twelve hundred students were caught sharing music, movies, or pornography.[225]

4. Pressplay at Penn State

Perhaps, the best illustration of a cooperative arrangement with universities is Pressplay’s discount contract with Penn State students. [226] Pressplay executives offered to provide a tailored version of its subscription service for students along with a discount that would be billed along with other student fees. [227] A company spokesman said, “Offering a legitimate alternative that provides quality, reliability and the music that people are looking for is an important element in helping to reduce piracy on campuses.” [228] Hopefully this program will be successful.

IV. Conclusion

The recording industry has a tough road to travel down. It won the early battle against Napster using theories of indirect liability. A decentralization of the architecture of P2P file sharing networks, however, resulted in a victory for the online file sharing services in Grokster. The recording industry passed up a golden opportunity to control the online music market by fully licensing the Napster technology. Napster had a [p209] proven product and established user base that would have solidified the recording industry’s position as the first and most formidable distributor of online music. Somehow Microsoft has never lost its edge as the dominant supplier of operating systems. Such dominance was initially established simply by being first to market.

The recording industry must consider several solutions that are not mutually exclusive. Licensing to online music distributors such as Apple’s iTunes has already begun. However, under this scheme consumers do not yet have the full selection of music that they would like. Yet, customers have flocked to the service and iTunes has become profitable. The new Napster may follow suit.

The recording industry will probably continue bringing suits against direct infringers. Since they cannot target all swappers, at best they will discourage some infringers. Still the lawsuits are bad publicity and tend to alienate the same people who are also customers of the recording industry. Additionally problematic is that ISPs do not want to cooperate for fear of alienating their customers.

Technological protections or self-help may be the answer, or at least part of the answer, for the industry. Any licensing scheme will probably incorporate some sort of protection. The self-help route is probably more difficult than other solutions since it requires the cooperation of not only the entire music industry, but also software developers. However, self-help has been successful in other industries.

Education of consumers and cooperation with universities could also be very helpful. However, the current education campaigns could be vastly improved. Many consumers may not know that what they are doing is illegal and the full effects of such behavior on the music industry. University cooperation can bring about a reduction in file sharing through monitoring software and penalties by school officials. But anytime a music subscription service, such as Pressplay, directly engages university officials and students with a special contract, the result is most promising.