INTRODUCTION :: In 1999, a Northeastern University freshman needed only a quiet dorm room to design the catalyst that would spark the peer-to-peer (P2P) downloading phenomenon. That freshman, the then-teenaged Shawn Fanning, spawned the now-infamous computer program Napster-a program that facilitated the free transfer of MP3 files between any two individuals anywhere in the world. Napster was widely accessible to the public, available as a free download on the Internet, and required only a simple subscription to utilize the software.
Although P2P had existed for many years,Napster distinguished itself with its foresight and innovative design. It “combined the practicality of sharing personal music and finding MP3s online with the community features of Internet Relay Chat,” a chat room interface popular with the computer- savvy. Importantly, Napster “provide[d] media fans with a forum to communicate their interests and tastes with one another . . . .”
As a free and fast way to get your favorite music, Napster quickly became popular, gaining ten million users within nine months of its July 1999 launch date. Merely a year and a half after its launch, Napster garnered nearly eighty million users. The record companies were not amused when after the release of Napster, CD sales fell as much as thirty percent. Seeing the CD sales market hastily eroded by what it viewed as “rampant piracy,” the recording industry sought the help of its trade group, the Recording Industry Association of America (RIAA). In an effort to stop or even reverse the effects of the P2P craze, the RIAA first turned to Congress and then to the courts for relief. Eventually, the RIAA turned its litigious eyes toward the individual infringers, relying on the exclusive right of distribution granted to copyright holders by the Copyright Act of 1976 (Copyright Act). In the process, the RIAA tested the limits of the distribution right and turned the case law interpreting that right upside-down.
Today, P2P litigation “present[s] one of the thorniest practical problems” in copyright law. Not only are individuals confused and misled about which actions are illegal and which are fair use, but the courts even disagree about the current state of copyright holders’ rights in the aftermath of the Internet revolution. In the past, Congress had simply modified existing copyright law every time there was a new technological advance that potentially threatened the rights of copyright holders. Since the massive overhaul of copyright law in 1976, Congress has amended the law more than fifty times. However, the recent “problems posed by the Internet are themselves more numerous-and reach farther into copyright law and policy-than those raised by earlier technology.” In light of current judicial struggles with Internet technology, it has become “difficult and awkward to adapt the specific statutory provisions to comport with the [copyright] law’s principles,” and therefore, it is time for Congress to make a change.
This Note analyzes the current legal climate of P2P litigation, specifically regarding the distribution right of 17 U.S.C. § 106(3), and argues that Congress should amend the Copyright Act once again to encompass digital transmissions and any future means of transmissions not yet thought of or invented. Part II of this Note offers a brief historical account of P2P litigation, with emphasis on the cases involving individual infringers. To assist in understanding many of the legal issues surrounding P2P and digital transmissions, Part III provides a technical overview of how P2P works and how the RIAA gathers evidence for litigation. Part IV outlines what constitutes copyright infringement and introduces copyright terms. Part V surveys legal authority and illustrates that a digital distribution, like all other distributions, requires actual dissemination of the copyrighted works. Part VI addresses the technological dissonance between current copyright law and digital distributions. Finally, Part VII argues that by amending the Copyright Act once again, Congress may finally resolve this dissonance and reinforce the Copyright Act against current and future problems associated with technology.
November 2014, Vol. 66, No. 6
Lily Kahng, The Taxation of Intellectual Capital