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Net music changing copyrights?

The debate that is raging over how online music should be regulated under current copyright laws, if at all, echoes arguments over phonographs and player pianos from the turn of the century.

When phonographs and player pianos burst onto the scene at the turn of the century, they touched off a firestorm of debate over their proper place under copyright law.

Popular composers such as John Philip Sousa worried that inventions would strain their livelihoods by killing the public's appetite to attend paid performances. Warning that the new invention would harm their incentive to create music, they argued that they should receive royalties every time one of their songs was recorded.

But the courts, at the behest of the phonograph and player piano industries, saw the matter differently. In a landmark 1908 decision, the MP3: Sound and fury Supreme Court ruled that records and player piano rolls were not copies for purposes of copyright and that, accordingly, they should not be subject to protection under the law. Congress quickly overturned that decision with the Copyright Act of 1909, which laid the foundation for the system that exists today. It awards composers a royalty each time a song is carried on a record, compact disc, or other format than can be replayed mechanically.

Echoing many of the fears composers expressed at the beginning of the 20th century, the Recording Industry Association of America, which represents large record companies, has publicly challenged many uses of the MP3 format (MPEG 1, Audio Layer 3), arguing that it will make piracy rampant and erode the rights of copyright holders.

The group last fall sued Diamond Multimedia, claiming that its device for replaying MP3 files violates a law passed in 1992 governing digital recording devices. At issue is whether Diamond's Rio PMP300 player, which allows users to download music in the MP3 format and replay them on home stereos and boom boxes, fits the definition of a "digital recording device" for purposes of the Audio Home Recording Act. Diamond last week announced an agreement with Intertrust Technologies in an effort to ensure copyright protection in MP3 downloads to its Rio player; the RIAA declined comment on how Diamond's move might affect the lawsuit.

The dispute "is an excellent example of the challenges of Bob Kohn trying to force a new technology into old law," said Brad Biddle, the former general counsel of MP3 download and community site MP3.com and an adjunct professor of cyberspace at the California Western School of Law. "The industry will be watching the results of the suit very closely."

Trotter Hardy, a professor specializing in copyright and Internet law at the College of William and Mary, agreed, saying the battle is no different from battles that raged over the phonograph, or later photocopiers, cassette tapes, and video tapes.

"There's always a question as to whether a new technology should change copyright law, or how copyright law applies to the new technology," said Hardy.

But the MP3 debate is likely only the beginning. As RealNetworks, Apple Computer, Liquid Audio, Microsoft, Sony, and other companies roll out digital music delivery formats, all looking to become the standard, the debate about their place is likely to grow fiercer and may pit former allies against one another.

For instance, a battle over the legal status of digital transfers of music pits the Harry Fox Agency, which collects royalties for the sales of recordings, against ASCAP, which enforces rights when songs are broadcast over the airwaves. Harry Fox views digital distribution as downloads that are no different from getting a copy of a tape or CD. ASCAP, meanwhile, sees it as more akin to broadcast.

The distinctions are made especially dicey because of the subtle technical differences in certain types of Internet technology. Technically speaking, downloading music is different from broadcasting or streaming it over the Net. And yet, there are close similarities between the two. Far more than a semantic exercise, the debate is another reminder that Internet technology is pushing the law to its limits.

"It's becoming increasingly clear that music Trotter Hardy copyright law is under significant pressure by what's happening with digital music," said Biddle.

In the end, surviving the transition to digitally transferred music is likely to have more to do with savvy business managers than aggressive lawyers, said William and Mary professor Hardy. "The bigger underlying issue is not the effect of technology on copyright but the effect of new technologies on business practices," he said.

The lesson has not been lost on Bob Kohn, the chairman of MP3 distributor GoodNoise and coauthor of the industry tome Kohn on Music Licensing.

"Every time a new technology comes along that affects the music industry it changes the industry," said Kohn, who draws parallels between this fledgling industry and the now-booming video industry that was created by the advent of the VCR.

"It's going to be a shift from revenues derived from CDs to revenues derived from digital downloads," he said. "Music is going to become much easier to purchase."  

Go to: Labels tuning in to Net