Ten Years After Napster, Court Lets File-Sharer Argue Fair Use

It was 10 years ago this month that Napster officially debuted, marking the beginning of the end for the record industry -- or at least for its business model.

Today, the Pew Internet & American Life Project released a new report that looks back over the changes to the music industry, and other media as well, since June of 1999. "Media analysts now broadly use the term, 'Napsterization' to refer to a massive shift in a given industry where networked consumers armed with technology and high-speed connectivity disrupt traditional institutions, hierarchies and distribution systems," the report says. And in many cases, those consumers have come to expect that a digitized version of a product -- such as news, movies or television shows -- should be available online for free."

While the major record labels weren't happy that people had found a way to share music for free online, there was little they could do to prevent it.

But that didn't stop them from trying. Among other tactics, the record labels waged a deeply unpopular litigation against individual file-sharers. For this effort, the major labels targeted around 35,000 file-sharers, plucked seemingly at random, and threatened to sue them unless they paid four-figure settlements.

The five-year litigation campaign cost the industry millions in legal fees, not to mention the goodwill of untold music fans. Last December, the labels said they would stop bringing new lawsuits, but would continue to pursue cases already in the pipeline.

Still, some of those cases -- including the lawsuits against Jammie Thomas and Joel Tenenbaum -- continue to make their way through the courts, and could have an impact for years to come.

The retrial of Thomas began today in Minneapolis. In 2007, a federal jury found that Thomas infringed the labels' copyright by sharing tracks and ordered her to pay $220,000, marking the first (and only) time a file-sharing case has resulted in a jury verdict. But the judge in the case, Michael Davis, declared a mistrial because he wrongly instructed the jury that they could find her liable for copyright infringement for simply making tracks available on a peer-to-peer network.

The other potentially landmark case involves Boston grad student Joel Tenenbaum. His defense team, led by Charles Nesson of Harvard Law, intends to turn the trial into a referendum on whether non-commercial file-sharing should even be considered copyright infringement.

Tenenbaum intends to assert a "fair use" defense and the judge presiding over his case, Nancy Gertner, has said she will allow him to do so, Ray Beckerman reports. (Beckerman, who runs the blog Recording Industry Vs. The People, has defended many alleged file-sharers, but isn't representing Tenenbaum.)

Tenenbaum aims to convince a jury that the non-commercial sharing of music should be considered fair use, similar to quoting from a book in a review.

It's not clear how a jury will react. But to even argue the issue raises the stakes of this lawsuit for the record labels. Before, Tenenbaum was the only party who risked financial ruin if he lost the case. Now, the industry also could see the final nail in its business model if a jury clears Tenenbaum on the theory that non-commercial file sharing doesn't infringe on the labels' copyright.

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