Can't Stop the Music
This article was taken from the Venner Shipley Newsletter edition 20
The downloading of music from the Internet has been a much-debated topic in recent years, not least in the field of intellectual property. First there was Napster, a peer-to-peer music sharing service.
The service was shut down in 2001 as a result of an injunction, sought by a number of major US recording companies, ordering Napster to stop the trading of copyrighted music on its network. Napster has since reopened as a pay service with limited success.
One of the reasons the network could be shut down was that it was not a pure peer-to-peer network. It used central servers to store lists of connected systems in the network and the files they provided. When the central servers were shut down, the system could not function.
After Napster had been closed down, a number of new music sharing services opened and one of them was Kazaa, which is fully peer-to-peer. The owners of Kazaa have defended themselves by arguing that they are not responsible for the actions of the users of the service. The RIAA (Recording Industry Association of America) responded by suing several private individuals who had shared a large number of music files through Kazaa. Most of these suits were settled with monetary payment. Many other lawsuits followed in various countries both against Kazaa and its users. The claimants argued that even if Kazaa is not responsible for the actions of its users they are encouraging individuals to steal music and videos over the Internet and thereby infringe copyright laws. In July this year it was revealed that the owner of Kazaa, Sharman Networks, had settled a lawsuit with the recording industry and that it would commit to becoming a legal music download service.
The changes to Napster and Kazaa were a result of the music industry, including both the labels and the artists, though mostly the labels, taking the companies to court and the authorities being able to successfully enforce the rulings of the court. What happens when the authorities do not enforce court rulings or when the copyright laws of the countries where the companies are based do not make it illegal to distribute copyrighted material? This is a relevant topic not just with regard to copyright in the music industry but in the whole field of intellectual property.
This topic was again recently debated in the British media when the International Federation of the Phonographic Industries (IFPI) tried to shut down the Moscow based music Internet company AllofMp3. AllofMp3 was founded in 2000 by Mediaservices, Inc. and offers albums on their website for around £0.75 each, compared to around £10.00 at iTunes Music Stores. The price of an album is based on the size of the file downloaded rather than the number of songs or the artist responsible for the songs. AllofMp3 is licensed by the Russian Multimedia and Music Society (ROMS) and Rightholders Federation for Collective Copyright Management of Words Used Interactively (FAIR) and they claim that they pay license fees according to the copyright laws of the Russian Federation. The international community and the record companies do not agree. Moreover, they argue that ROMS does not have the right to give licences to AllofMp3 since the laws of Russia state that ROMS needs the permission of the rightholders to grant licences and the rightholders have not given their permission. Moreover, even if it did have the right under Russian law, AllofMp3 is selling albums outside Russia and is therefore infringing foreign copyright laws.
In 2005, the IFPI filed a formal complaint at the Moscow City Prosecutor’s office. This also coincided with the Moscow City Police recommending that AllofMp3 be prosecuted after a preliminary investigation of the website. However, later than year, the Moscow City Prosecutor's office decided that Russian copyright laws do not cover online distribution of creative works and refused to bring a criminal suit against AllofMp3. Russian copyright law covers distribution of creative works in physical form such as DVDs and CDs. However, the law does not make it illegal to perform phonograms publicly without the authorisation of the copyright owner for broadcasting and cable transmission. AllofMp3 argues that the Internet falls under this exemption. Incidentally, they will not be able to use this argument after 1 September 2006 at which point new legislation that specifically deals with the Internet will come into force in Russia. Since 2005 both criminal and civil proceedings have been brought against the owner of AllofMp3.
The battle is also being fought at home. The British Phonographic Industry (BPI) has recently been given leave to sue AllofMp3 in the High Court for infringing UK copyright laws. Allofmp3 argues that it is not operating or advertising its business on the territory of other countries. The BPI argues that they provide an English interface and allow users with credit card billing addresses in the UK to buy the music files. Even if the BPI wins they might face problems enforcing the ruling. Russia is experiencing major problems with piracy and the Internet is not be a priority at the moment. However, it has been argued that with Vladimir Putin’s effort to make Russia a member of the World Trade Organisation, the country may be pressured to take action.
The bpi has issued a statement that they do not intend to go after the individual users of the site. However, even if they did, it is not a clear cut case. The copyright law of the UK states that the copyright in a work is infringed by a person who, without the license of the copyright owner, imports into the United Kingdom, other than for his private and domestic use, an article which is, and which he knows or has reason to believe is, an infringing copy of the work. Most users of the website clearly imports the music file for private and domestic use.
Moreover, unfortunately for the record labels, statistics show that all the media attention given to AllofMp3 as a result of the legal measures taken by the industry has resulted in increased downloads from the website.
If the new legislation in Russia clarifies the copyright laws and the Russian authorities take serious steps to enforce the court orders, AllofMp3 may go the same way as Napster and Kazaa. Moreover, Russia may set a useful precedent for other countries with the same problems. However, even if AllofMp3 shuts down or becomes legal, the trends in recent years show that consumers are willing to buy cheap copyrighted material from companies breaking the law, rather than to pay the recording industry the costs set by them and, therefore, there are likely to be more Napsters, Kazaas and AllofMp3s.