First published in ART+law, March 2000.
Background:
Over the past year, a number of US-based online music businesses have have taken advantage of new software that offers consumers faster access to streamed and downloaded music online. One of the best known of these companies- MP3.com- has bought over 80,000 CDs and copied them into digital files, thereby creating an online music library which is growing by over 1,500 CDs a day.
my.mp3.com members can collate their own personal online music library which can be accessed wherever and whenever they connect to the internet. Beam-It software instantly recognises music CDs placed into a computer. the software enables instant access to streaming of mp3 digital versions of that CD, and instantly registers those versions to their personal my.mp3.com online music library (househed on hte mp3.com server). Instant Listening software offers the same service when members buy a CD online through an MP3.com partner. Unlike other online services that take around 20 minutes to transform a full CD into a digital file, MP3.com offers the music industry.
The court cases:
Recently two actions for copyright infringement have been brought against MP3.com in relation to the new my.mp3.com account service.
One of the actions is by the Recording Industry Association of America (RIAA) which is objecting to the unauthorised copying of its members' CDs into digital files to create the MP3.com online library. No permission or licences were sought by MP3.com from any of RIAA's record label members. Accordingly, RIAA wants the service shut down and is seeking damages and costs.
The second case is a joint action by music publishing companies MPL Communications and Peer International.They claim MP3.com has infringed copyright in musical works which they either own or control, by copying works onto a server, and by develivering those works over the internet without permission.
MP3.com's defence:
MP3.com has countered by bringing their own action against RIAA for unfair business practices and defamation. In its defence MP3.com claims that only the person who buys the CD is entitled to listen to it using their services. therefore royalties payable to the compose, music publisher, recording artist and record company should not be affected by their services. but there appears to be no way for MP3.com to ensure that a member actually bought the CD.
MP3.com also claims that their services are simply another media device: a 'virtual CD player'. A key aspect of their defence is the argument that when someone purchases a CD they are buying a licence to listen to that music on any format and on any device in the world as allowed under the US-specific First Sale Doctrine.
This doctrine states that a person who owns an authorised copy of a CD is allowed to 'sell or otherwise dispose' of that CD in any way they like, without needing the copyright owners' permission. MP3.com also argues that individuals loading their own CDs onto Internet servers for personal listening are covered under the copyright defence of 'fair use'.
However the law does not permit the CD owner to copy or publicly perform the work without the copyright owners' permission. So even if MP3.com owns the CDs, which are authorised copies of sound recordings, it is doubtful whether they have the right to upload (ie copy) them onto the internet without obtaining permission from the various copyright owners.
What this means for the music industry:
The outcome of these cases has the potential to impact on the music industry worldwide.
If MP3.com successfully defends these actions, it will make it very difficult for copyright owners such as composers, recording artists and record companies to prevent or control US online music sites' use of their material and they will not be entitled to any licence fees. This in turn may have a detrimental effect on the revenue they would otherwise have received from royalty income.
More information can be found online at www.mp3.com
