The Music Industry’s Fight Against Napster – Part 1: Napster’s Rise to Fame

On December 6, 1999, the Recording Industry Association of America (RIAA) sued the first file sharing platform Napster for copyright infringment. This was the start of a still ongoing campaign against file-sharing and related practises. On the occasion of the 15th anniversary of RIAA’s lawsuit against Napster, I would like to retell the story of Napster relying on Joseph Menn’s book “all that rave. The Rise and Fall of Shawn Fanning’s Napster” (2003) as well as on court documents and press articles.

In part 1 Napster’s rise to fame until RIAA’s filing its lawsuit against Napster is highlighted.

 

Part 1: Napster’s Rise to Fame and the RIAA Lawsuit

Napster Rises to Fame

The main protagonists of the Napster drama, Shawn Fanning, Jordan Ritter and Sean Parker, were about 20 years old, when Napster was incorporated as a company in 1999. When they got in touch on the Internet, at the end of the 1990s, MP3 music files were still available on several online platforms. However, the number of file available was very limited. Shawn Fanning wanted to change this – from his perspective – unsatisfactory situation and started to write a software that enabled users to access hard drives on other computers on the net. Fanning presented the first beta version to his hacker peer group in autumn 1998. Jordan Ritter’s task was to maintain the main server as well as the back-up server. Sean Parker was involved to detect and to eliminate bugs in the software, but also to approach investors for funding (Menn 2003: 34-39).

The fundamental architecture of the Napster software still existed early in 1999. Fanning cancelled his studies at the Northeastern University in Boston to focus on the finalisation of the Napster software. His uncle, John Fanning, offered his support by setting up a company to market the software. In May 1999, Napster was incorporated. John Fanning was the main investor with a capital share of 70 percent, leaving just a minority share of 30 percent for his nephew Shawn (ibid.: 53-55).

During the summer of 1999, Yosi Amram was the first investor to put US $250,000 into the new company. In return, he demanded to relocate Napster Inc. to his residence San Francisco and he appointed an executive board as well as a board of directors by his grace. (ibid: 84). According to Menn (2003: 100-103) chaos dominated in this early period. Nobody had a knowledge of the music business and of the copyright system. The members of the executive board disagreed on the strategy of Napster, whether it should stay a non-for-profit file sharing platform or a fully licenced music subscription service. Since the traffic on the Napster servers exploded from a few 1,000 users per day to more than 10,000 users in June 1999, many software engineers – most of them students and teenagers – had to be hired in very short time. In October 1999, the number of users crossed the mark of 1 million visits per day. Napster had become the fastest growing software application on the Internet. No wonder that media became aware of the Napster phenomenon. The first detailed article about Napster was published in the tech-magazine Wired on November 1, 1999.[1] The author already questioned if the Napster business model would infringe copyright. CEO Eileen Richardson assured that all copyright provisions were met: “We’re going to follow all the laws to the letter, including the Digital Millennium Copyright Act. … [Napster is] much more about community. We are not interested in people doing anything illegal.” (Menn 2003: 123).

The Recording Industry Association of America (RIAA) painted a different picture. RIAA became aware of Napster in the summer of 1999, when the anti-piracy team routinely searches chat rooms for MP3-files (ibid: 161). Frank Creighton, the head of the team, approached John Fanning in an e-mail on September 23, 1999 informing him that the Napster-software would infringe copyright: “As may or may not be aware, your software, while exciting to both consumers and producers (including potentially our members) of sound recordings, unfortunately facilitates in many cases the unauthorized posting of our members’ sound recordings.” (ibid: 163). Creighton invited Fanning to a “mutually beneficial dialogue” (ibid: 162) to solve the problem. Fanning misunderstood Creighton’s kindness as weakness and thought that RIAA was bluffing and had no evidence of a copyright infringing behaviour by Napster. Thus, Fanning played out and did not even answer Creighton’s e-mail. When the head of the anti-piracy team wrote again in October, Fanning replied politely, but referred to Napster CEO Eileen Robertson. Robertson, however, continued the delaying tactics and hoped that Napster’s user numbers would grow further to have a better bargaining position with RIAA (ibid: 163).

 

The Lawsuit

At the end of October, RIAA president Hilary Rosen was at the end of her tether. She wrote to the RIAA lawyers to start their investigations against Napster and to set up a complaint for copyright infringement. On November 15, 1999, Wired reported that RIAA intended to sue Napster. A RIAA spokeswoman was cited in the tech magazine: “We made several attempts over the last few weeks to communicate with [Napster] (…). Unfortunately, our urgent requests for a meeting were not taken seriously. We really had no other option but to file litigation.” Napster CEO Eileen Robertson alleged RIAA to lie: “She [Robertson] said she had been communicating with the RIAA via voicemail, and left her last message for them 10 days ago. She added that Napster is ‘absolutely’ interested in meeting with the RIAA.”[2]

On December 6, 1999, RIAA sued Napster for copyright infringement at a San Francisco district court.[3] In paragraph 44 of the complaint, Napster was accused to commit music piracy on the large scale: “In stark contrast to these legitimate companies, Napster is not developing a business around legitimate MP3 music files, but has chosen to build its business on large-scale piracy. Napster seeks to profit by encouraging and facilitating the distribution and reproduction of millions of infringing MP3 files. Moreover, by deliberately refusing to maintain any information about its users in order to make copyright enforcement next to impossible, Napster has created a virtual sanctuary where music piracy can and does flourish on a monumental scale.” (A&M Records Inc. v. Napster Inc.: 12).

In paragraph 46 the RIAA’s lawyers detailed how Napster’s software worked: “(…) Napster provides to its users (at no cost) Napster’s proprietary ‘MusicShare’ software. This Napster-developed software enables users to connect their computers to a hub of computer servers maintained by Napster, and interacts seamlessly with ‘server side’ software developed and maintained by Napster on its computer servers. By using Napster’s MusicShare software, once connected to Napster’s servers, users choose which of their own MP3 music files stored on their computer hard drives they want to make available for copying by other Napster users. Napster then takes an inventory of the music files each user has so designated and combines and organizes a listing of those song files into an extensive database and directory, which is maintained on Napster’s servers and which Napster makes available to all Napster users.” (ibid: 13). The description highlights Napster’s central server architecture that played the main role in the following trial for a provisional injunction against Napster – a trial on copyright infringement, however, never took place.

RIAA’s lawsuit drew the attention of the world public on Napster. Each day journalists approached officials of Napster to comment on the lawsuit and to explain their own position. The cover stories of international media created a Napster hype that multiplied Napster’s publicity. At the beginning of 2000, Napster was the best known brand in the music business.

 

Musicians Pro and Contra Napster

Also musicians had to take a stand. Public Enemy band member Chuck D praised Napster in an open editorial in the New York Times.[4] Radiohead, Courtney Love, Madonna, Dave Matthews, Moby and Limp Bizkit also supported the P2P file sharing platform with their comments in media.[5] RIAA, however, also presented “their” musicians such as Emimem and Peter Gabriel, who spoke out against Napster (Menn 2003: 140-141).

The most prominent critics of Napster were the members of the heavy metal band Metallica. Metallica sued Napster in April 2000 for repeated copyright infringement of their songs. In addition, Yale University, University of Southern California (USC) and Indiana University were sued by the band since these universities did not block their students’ access to Napster.[6] At the beginning of May 2000, Metallica lawyer as well as drummer and band leader Lars Ulrich arrived at Napster’s headquarter in San Matteo to demand to shutdown Napster (Menn 2003: 144-145). They handed over thirteen boxes with 335,435 names of Napster users offering Metallica songs on the P2P file sharing platform to the executive board of Napster and demanded the immediate blocking of the users’ accounts.[7] Thereupon, Napster blocked 317,377 users on May 10 to demonstrate willingness to cooperate. The blocked users, however, registered under a different user name and, thus, circumvented the blocking measurements.[8] Besides Metallica, rapper Andrew Young aka Dr. Dre also sued Napster at the end of April[9] and requested Napster to block 239,612 users’ accounts that were infringing his copyrights.[10]

 

The Hearing of Evidence

In April 2000, 50 mainframe computers had to be connected to cope with the exponential growth of search requests. The growth also led to a liquidity crisis and the Napster executives had to find immediately investors who would provide funds despite ongoing litigation. John Fanning, however, was a roadblock too. Whenever a deal with a venture capitalist seemed to be finished, Fanning vetoed since he feared to lose ground. Eventually Hummer Winblad Venture Partners were willing to invest US $14.5m in Napster. John Fanning accepted the deal since he could keep his board seat. Nevertheless, he lost his veto right by a capital increase of 15 percent. Thus, Hummer Winblad controlled 20 percent of the voting stock and got in total control of Napster. Eileen Richardson was displaced by copyright lawyer Hank Barry as CEO, since his expertise was crucial for the upcoming trial (Menn 2003: 211-214).

Barry’s strategy was to define Napster as a service provider that fell under the “safe harbor” provision in the Digital Copyright Millenium Act (DCMA). The law grants a copyright infringement liability limitation “(…) for transmitting, routing or providing connections for material through a system or network controlled or operated by or for the service provider”.[11] However, district judge Marilyn Hall Patel ruled on May 5, 2000 that Napster was not an Internet Service Provider (ISP) since it did not transmit or route the music files, which were directly shared between the Internet users. Furthermore, Napster omitted to stop copyright infringement for a long time. Measures against infringing behaviours were not set until RIAA had sued Napster in December 1999. And the infringing IP addresses were not blocked but only passwords were changed.[12] This ruling was a severe set-back for Napster. Napster’s legal position was shaken to the core. In the following trial Napster had to fear a preliminary injunction to shut down the file sharing network.

In May 2000, the hearing of evidence by the plaintiffs started. This included the hearing of witnesses by the plaintiffs’ lawyers. Russell Frackman, who was leading the suit against Napster, conducted the hearings to highlight that Napster was established as a profit oriented company that did not just tolerate copyright infringement behaviour by its users but even encouraged them to break the law. Napster co-founder Sean Parker had delivered the “smoking gun”. In an e-mail to Shawn Fanning he wrote “(…) they [RIAA people] see that we are not just making pirated music available but also pushing demand” (Menn 2003: 230). This e-mail was presented to Parker by an assistant of Frackman as the final proof that all the Napster executives were aware to foster copyright infringing behaviour.

For the RIAA lawyers the case was crystal clear. Napster was infringing copyright on a large scale. Therefore, they filed for preliminary injunction June 12, 2000 that would lead to shut down the service.[13]

 

Sources

[1] Wired, “Napster: Music Is For Sharing”, November 1, 1999 (accessed October 30, 2014).

[2] Wired, “RIAA Suing Upstart Startup”, November 15, 1999 (accessed November 4 2014).

[3] A&M Records Inc. v. Napster Inc., Complaint for contributory and vicarious copyright infringement violations of California Civil Code Section 980(a)(2) and unfair competition. case no. C99-5183-MHP (accessed November 4 2014).

[4] New York Times, open editorial by Chuck D, April 30, 2000. See also: CNET, “Rapper Chuck D throws weight behind Napster”, May 1, 2000 (accessed November 4, 2014).

[5] Artists’ comments on Napster can be found here: http://www.singsing.org/files/causacivile/napster/ (accessed November 4, 2014).

[6] Metallica v. Napster Inc., case no. C 00-4068 MHP

[7] CNET, “Metallica fingers 335,435 Napster users”, May 1, 2000 (accessed November 4, 2014).

[8] CNET, “Napster boots 317,377 members from service”, May 9, 2000 (accessed November 4, 2014).

[9] Andrew Young p/k/a Dr. Dre and Aftermath Entertainment v. Napster Inc., case no. C 00-3997 MHP.

[10] CNET, “Dr. Dre chimes in with names to ban from Napster”, May 17, 2000 (accessed November 4, 2014).

[11] Digital Copyright Millenium Act 1998, Sec. 201, Title II: Online Copyright Infringement Liability Limitation Act, §512(a).

[12] Court’s 512(a) Ruling, May 5, 2000, case no. C99-5183-MHP.

[13] A&M Records et al. v. Napster Inc., Complaint for contributory and vicarious copyright infringement, violations of Californian Civil Code Section 980(a)(2), and unfair competition, June 12, 2000, case no. C99-5183-MHP.