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 Napster.com 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).

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

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 court’s 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 Napster’s 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 won’t 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.

Author