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File-traders in the crosshairs

The record industry is threatening legal and technical action against individual file-swappers. But what's the real risk for consumers?

When the recording industry last month let slip plans to sue individuals who trade copyrighted songs on file-swapping services, Web surfers everywhere pulled down their MP3 collections in a frenzy of fear.

OK, not really. Despite the music industry's hopes, such threats have so far been met with a collective yawn in the file-swapping community, which has yet to see much damage in spite of repeated legal wrangling with the Recording Industry Association of America.

In the face of crackdowns on file-swapping services such as Napster and cease-and-desist letters to companies that allow employees to swap files, some free music junkies have become more determined than ever, turning to smaller and more obscure sites and services to grab their favorite tunes. Although it requires more effort, fans say, they can still get a song if they really want to.

So now, it appears, the music industry is preparing to loose its legal dogs on those wily listeners themselves. Two weeks ago, sources close to the record labels said lawsuits against individuals are being seriously considered in the fight against peer-to-peer piracy--a battle that until now has focused primarily on the companies that provide file-swapping software and services.

"I think they're serious about it," said Siva Vaidhyanathan, an assistant professor at the University of Wisconsin at Madison and the author of "Copyrights and Copywrongs: The Rise of Intellectual Property and How it Threatens Creativity." "I think they're serious about it because they're desperate, but I would predict it's going to do more alienating than scaring."

Threats to go after individual users is just the latest in the labels' campaign to choke off a file-swapping system they fear will cause them to lose control over their music. In addition to suing peer-to-peer companies, the RIAA has threatened suits against companies that allow their employees to swap files.

In addition, the labels have started using technical measures to flood swapping sites with bogus files. Such tactics could be further expanded if Congress approves legislation backed by the record labels that would explicitly allow them to harass file-swappers without fear of liability.

So far, the labels and artists have only conducted isolated crackdowns on individuals, including an Oklahoma State University student and some Napster users who swapped Metallica and Dr. Dre songs.

Just how far the record labels would go in expanding legal efforts against millions of ordinary file-swappers remains a mystery. After all, the labels risk alienating some of their best customers by suing them. Anyone with thousands of files on his or her computer is obviously a music enthusiast--albeit one the music industry fears is taking music instead of paying for it.

The RIAA thus far has focused its legal endeavors primarily on suing the peer-to-peer services that let people swap files. "It's easier for them to do that than sue the individual consumer because there's less fallout," said Judy Jennison, an intellectual property attorney at Perkins & Coie. But she's not surprised the record companies might decide to go after file-swappers.

"In some cases, it makes more sense because peer-to-peer companies aren't the ones who are making copies of the files," she said.

Picking their battles
The challenge, legal experts say, is finding unsympathetic defendants who stand little chance of galvanizing broad public protest against the actions of the record labels--industry giants that are facing twin revolts from consumers over the high price of CDs, and artists complaining about unfair contracts.

Jennison thinks the RIAA will target people in their late 20s or early 30s who are making available massive numbers of files that are current and popular. The RIAA may also look for people who could otherwise afford to buy CDs but instead choose to play the free-swapping game, she speculated.

Others suggest that the industry would pursue, as University of Wisconsin's Vaidhyanathan called them, "hacker types," or people who look like they might spell trouble to mainstream Americans. Already, similar tactics have been put in play by the movie industry, which successfully convinced several judges that the operators of hacker publication 2600 aided copyright infringement by providing links to code that could be used to crack copyright protections on DVDs.

The record industry also could lean on law enforcement to do its dirty work for it, said P.J. McNealy, a research director at Gartner. "One of the problems with file-sharing right now is consumers aren't afraid of police knocking in doors and seizing computers," he said. However, criminal copyright charges, which usually must involve monetary losses or an intent to make money, often are hard to prove in cases involving individuals.

Nevertheless, the Business Software Alliance (BSA), a trade group that represents major software owners including Microsoft, has worked successfully with law enforcement to crack down on copyright infringement in the software arena--including a sting operation that resulted in jail time for several members of the DrinkOrDie software piracy ring. The RIAA has said it wants to model its efforts after the BSA's.

Record executives are split on whether individual lawsuits are a good idea, insiders say. No decision has been made one way or the other. But the idea is under consideration.

"Music sales over the past year have slumped, and the industry is looking at a variety of tactics to tackle online piracy," one industry executive said.

Cutting the wires
Typically the labels, like other copyright holders, have pursued individuals alleged to be involved in online piracy though their Internet service providers. ISPs have received hundreds of letters from labels, studios and other copyright holders over the past year, asking that subscribers offering large amounts of copyrighted material be stopped.

Similar tactics were used against individuals who used different types of technology, such as FTP sites or Internet Relay Chat (IRC) to trade files. The RIAA has sued individuals operating pirate FTP sites in the past, the organization said.

Most industry watchers think entertainment companies are going to go after just a few defendants in an effort to show they're serious about stopping unauthorized trading of music files and trumpet the cases very publicly. The effort could be more than just a publicity stunt, however.

A study of Gnutella users by Xerox's Palo Alto Research Center found that about 10 percent of network users provide 90 percent of the material available on some peer-to-peer networks. What's more, the Motion Picture Association of America said it's seen a 45 percent drop-off in the number of sites offering pirated music since the DrinkOrDie operation began.

In a sense, the sue-the-user tactic is one that supporters of Napster and other file-swapping services have pointed to as an alternative to suing companies all along. During cases filed against Napster, Scour, Morpheus and others, supporters of those services have argued that the technology itself is neutral--after all, you wouldn't expect a copyright holder to go after Xerox for providing the copying machine on which documents were illegally duplicated.

Judges, however, have disagreed, saying, for example in the Napster case, that the company intended to profit from the file-swapping and was designed primarily to allow swapping of copyrighted works.

Even Fred von Lohmann, an attorney for the Electronic Frontier Foundation, which has aided in the defense of many tech companies accused of copyright infringement, said he's hard-pressed to come up with a defense under current law for someone who copies millions of files and then makes them available, without permission, to the world via the Internet. However, he's hoping cases involving individuals could spark debate over the laws themselves.

"Then I think we can really start having a national discussion about whether copyright law has gotten out of sync with people's expectations," he said.

News.com's John Borland contributed to this report.