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Peer-To-Peer Pressure: Life After Napster
by Drew Clark
The recording industry emerged triumphant last week as two major peer-to-peer (P2P) computer services it had long viewed as adversaries suffered crippling blows.
The long-dormant Napster finally was removed from life support as it shut its doors, dismissed its employees and began liquidating its assets. The end finally came when a Delaware bankruptcy judge refused to permit the German media giant Bertelsmann to buy Napster's assets under a reorganization plan, charging conflicts of interest.
Meanwhile, federal District Judge Marvin Aspen in Illinois rebuked the less-well-known Aimster, which became Madster after settling a trademark dispute with America Online. Aspen granted the recording industry's request for an injunction against the company, and absent an appeal, the site could go dark within weeks.
"Defendants manage to do everything but actually steal the music off the store shelf and hand it to Aimster's users," Aspen declared in an opinion that followed the reasoning of the 9th Circuit Court of Appeals in its February 2001 decision against Napster. He said Aimster had engaged in "contributory" and "vicarious" copyright infringement by enhancing the ability of its users to trade digital music files using AOL Time Warner's Instant Messenger program. America Online was not a party to any of the copyright cases.
"This unequivocal ruling today underscores that companies and individuals will not be permitted to build a business on music they do not own and will be held responsible for their actions," Recording Industry Association of America CEO Hilary Rosen said. She added that the "decision helps to support the continued development of the legitimate online music market for fans."
The Death Knell For File-Sharing?
For more than two years, the entertainment industry has been targeting the technology popularized by Napster and adopted by many other companies, each of which added their own unique twist to the technology. The most popular P2P services are Madster, Kazaa, StreamCast Networks and its Morpheus software and Grokster -- each of which have been sued for contributing to copyright infringement.
In simplest terms, P2P services permit Internet users to connect their computers without relying on a corporation "server" computer. The key legal question is how far the recording industry can go in holding technology companies responsible for their users' actions before facing the legal precedent of Sony Corp. v. Universal Studios. That 1984 Supreme Court decision absolved videocassette manufacturers from liability for copyright infringement by its users so long as the technology permitted "substantial non-infringing uses."
Next up is the case involving Kazaa, StreamCast and Grokster -- one that has some technologists truly worried. The first major briefs are due Monday, and the case could be argued in federal district court in Los Angeles as early as December.
On the one hand, attorneys for the three companies note a key difference between their clients and the defendants in prior cases. Unlike Napster and Madster, they argue, Kazaa, Streamcast and Grokster merely provide P2P software and do not operate a central server listing the screen names of users. But a legal defeat could be devastating for P2P technology development, some argue.
"Even if this decision were to go badly, there is lots of P2P software in 'open source' form, and it will always be out there," said Fred von Lohmann, senior intellectual property attorney at the Electronic Frontier Foundation, which is assisting in the three companies' defense. "But the person who should be watching this case is not the kid in the college dorm who is looking for the latest music to download. It is the general counsel for Intel, Hewlett-Packard and Microsoft" who might find the P2P future foreclosed by a negative decision.
The Future Of P2P
Yet as the technology is being pounded in court, P2P is still regarded as an extremely promising approach for solving problems that have plagued the Web and for offering greater efficiencies in the future. The O'Reilly Network, a technology publisher, created a P2P directory of hundreds of companies developing variants grouped into categories like "collaboration," "distributed computation," "infrastructure," and the currently most popular category of "file sharing."
The notoriety that Napster brought "is unfortunate because P2P is fundamentally just a network architecture, a way of utilizing this big system of connected computers called the Internet," said Jeff Seul, general counsel of Groove Networks. Headed by Ray Ozzie, the creator of Lotus Notes, Groove designs collaborative software that allows Internet-connected computers to simultaneously work in the same word-processing document.
"Napster was about huge numbers of strangers doing one thing on a P2P network," Seul said. "Our software is about a relatively small number of people known to each other getting a lot of types of meaningful things done together over a P2P network."
Other P2P companies, such as CenterSpan Communications, offer Hollywood studios and recording studios new ways to cheaply and securely distribute their works, and the entertainment moguls cite CenterSpan as proof that they are not opposed to all forms of P2P. But thus far Sony and Vivendi Universal are the only studios that have signed deals with CenterSpan.
Peer-to-peer applications are "the natural consequence of what happens when you hook very fast processing speed with large hard drives and fast broadband connections," said Phil Corwin, an attorney at Butera & Andrews, the Washington representative for both CenterSpan and Sharman Networks, the Australian company that owns the Kazaa software and Web site. "That is what the Internet is designed to do."
Caught In The Copyright Crossfire
But companies like Groove Networks fear that the recording industry's legal -- and now legislative -- battle against P2P services will leave them caught in the crossfire. Together with Internet service providers and tech companies generally, the file-sharing firms are concerned about a bill, H.R. 5211, that would exempt copyright holders from anti-hacking laws when they interdict or delete computer copies of their copyrighted material. And they are trying to counter expected new criminal cases against P2P users.
"It really does make this mistake of equating P2P networking with music file-sharing," Seul said. "It just doesn't get the point that this is an important kind of networking technology." Moreover, "there is no way to guarantee that these attacks would be narrowly focused." He compared the bill to allowing publishers to cut the phone wires of people who the companies suspect are faxing unauthorized reprints of printed articles.
A spokesman for Rep. Howard Berman, D-Calif., disputed that and other negative characterizations of his bill and -- together with an executive of the Motion Picture Association of America -- is scheduled to debate Butera & Andrews' Corwin and Public Knowledge President Gigi Sohn next week at the Cato Institute.
In the meantime, Corwin has set his sights on countering a July letter, sent by Rep. Lamar Smith, R-Texas, and Sen. Joseph Biden, D-Del., urging the Justice Department to start prosecuting P2P users. "A war against file-sharing is going to be more futile than the war against drugs," Corwin said. He added, however, that unlike drug use, file sharing has not been shown to be harmful to the health of the recording industry.
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