1. Liberty vs. Piracy Piracy 2 Piracy 2 Craig Haughton Craig Haughton Mike DeSimone Mike DeSimone Brian Spada Brian Spada Jason Atkinson Jason Atkinson

2. What is Piracy? When we say “Piracy” we are referring to Software Piracy. When we say “Piracy” we are referring to Software Piracy. Covers several different activities: Covers several different activities: Illegal copying of programs Illegal copying of programs Counterfeiting software Counterfeiting software Distributing software Distributing software Even sharing a program with a friend. Even sharing a program with a friend.

3. Mp3 The music contained on a music CD is stored in a very high resolution digital format. The music contained on a music CD is stored in a very high resolution digital format. Basically, the MP3 format is a compression of the compact disk information. Using “Perceptual Noise Shaping” without sacrificing any audio quality whatsoever. Basically, the MP3 format is a compression of the compact disk information. Using “Perceptual Noise Shaping” without sacrificing any audio quality whatsoever.

4. Types of Networks Although Napster and other file sharing programs have just recently brought peer-to- peer sharing into the limelight, it has been around almost as long as the Internet itself. Although Napster and other file sharing programs have just recently brought peer-to- peer sharing into the limelight, it has been around almost as long as the Internet itself. Initially done over a Local Area Network (LAN) and File Transfer Protocol (FTP). Initially done over a Local Area Network (LAN) and File Transfer Protocol (FTP).

5. Centralized vs. Decentralized Networks Centralized Centralized examples: Napster, Morpheus examples: Napster, Morpheus A central server is used to connect users to each other. A central server is used to connect users to each other. The file being transferred over a direct HTTP link that the server makes between the two computers. The file being transferred over a direct HTTP link that the server makes between the two computers. The file is never actually stored on the server. The file is never actually stored on the server.

6. Continued... Decentralized Decentralized example: Gnutella example: Gnutella No central server. No central server. Computer basically logs on and informs other computers it has logged on. Computer basically logs on and informs other computers it has logged on. Basically a chain of computers networked together as opposed to all the computers running through one central server. Basically a chain of computers networked together as opposed to all the computers running through one central server.

7. History of the Napster case Napster gains popularity in early 1999. Napster gains popularity in early 1999. RIAA brings suit against Napster, Yale, USC, and Indiana University for copyright infringement not long after. RIAA brings suit against Napster, Yale, USC, and Indiana University for copyright infringement not long after. Judge initially rules in favor of RIAA and orders the site to be shut down. The ruling was appealed by Napster. Judge initially rules in favor of RIAA and orders the site to be shut down. The ruling was appealed by Napster. 9th District Court of San Francisco hears the appeal and assents that Napster is promoting and facilitating widespread copyright infringement. 9th District Court of San Francisco hears the appeal and assents that Napster is promoting and facilitating widespread copyright infringement. Napster agrees to remove copyrighted material. Napster agrees to remove copyrighted material. The case was put on hold and remains there to date. The case was put on hold and remains there to date.

8. The sides of the argument…. There are two main sides: There are two main sides: RIAA and the artists they represent RIAA and the artists they represent People who distribute these files using Napster, Morpheus, etc… People who distribute these files using Napster, Morpheus, etc…

9. Why mp3 sharing is illegal Two Steps: Two Steps: Conversion to mp3 format Conversion to mp3 format Distribution over P2P network Distribution over P2P network Both are illegal in the US under current copyright law Both are illegal in the US under current copyright law

10. Copyright in the US Gives the owner Gives the owner Exclusive right to reproduce, distribute, perform, display, or license the work Exclusive right to reproduce, distribute, perform, display, or license the work Lasts until 70 years after the author’s death Lasts until 70 years after the author’s death Does a loophole exist? Does a loophole exist?

11. Loophole in Copyright? Section 107 Section 107 “Fair Use” clause “Fair Use” clause Allows for criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research. Allows for criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research.

12. Is mp3 conversion illegal? Unless you plan on researching the life and times of Busta Rhymes, copying CDs into mp3s is illegal

13. What about the Betamax case? VCR’s record broadcast medium VCR’s record broadcast medium CD’s are a purchased product CD’s are a purchased product VCR’s make degraded analog copy VCR’s make degraded analog copy mp3 produces a near-perfect reproduction mp3 produces a near-perfect reproduction Courts may not use Betamax case as precedence Courts may not use Betamax case as precedence

14. Is sharing mp3s illegal? Even if courts rule that creating mp3’s is legal, it is still illegal to distribute copyrighted material to the general public.

15. Who is to blame? Is Napster responsible for its users’ actions? Is Napster responsible for its users’ actions? Is Ford responsible in an accident? Is Ford responsible in an accident? Napster should not be held responsible for the actions of its users Napster should not be held responsible for the actions of its users

16. Does Napster have a legitimate use? Small artists have used Napster to gain attention Small artists have used Napster to gain attention Majority of files on Napster were copyrighted Majority of files on Napster were copyrighted Many alternative distribution methods exist: Many alternative distribution methods exist: Websites Websites FTP FTP Others Others Napster allows copyrighted works to be distributed, searched, and centralized Napster allows copyrighted works to be distributed, searched, and centralized

17. Can Napster be outlawed? Napster was shut down by court order Napster was shut down by court order Central server allowed easy shutdown Central server allowed easy shutdown Next-generation P2P clients do not use a central server Next-generation P2P clients do not use a central server Shutting down one host still leaves others operating Shutting down one host still leaves others operating May be able to limit new users from entering May be able to limit new users from entering Destroying Napster may have done more harm than good

18. What can artists/labels do? Lower price of CDs Lower price of CDs + increase sales volume + increase sales volume + still make a reasonable profit + still make a reasonable profit - most will not take risk of decreased revenue - most will not take risk of decreased revenue CD resistant to digital transfer CD resistant to digital transfer + stop most media creation + stop most media creation - may lose customers - may lose customers - discs may not work in all players - discs may not work in all players - potential warning - potential warning

19. What else can artists/labels do? Change public opinion Change public opinion Use TV and radio ads to highlight benefits of purchasing CD and the problems of sharing mp3s Use TV and radio ads to highlight benefits of purchasing CD and the problems of sharing mp3s + keeps prices stable + keeps prices stable + no newfangled copy protection schemes + no newfangled copy protection schemes + could also benefit other industries (like software) + could also benefit other industries (like software) - create negative attention - create negative attention thetruth.com ads thetruth.com ads

20. Why should file sharing be legal? File sharing is a new technology that makes listening to your favorite artists and watching your favorite movies more enjoyable. There are many reasons why file sharing should be legal. File sharing is a new technology that makes listening to your favorite artists and watching your favorite movies more enjoyable. There are many reasons why file sharing should be legal.

21. Oh no, Beta! Sony released the first version of a VCR in the 1970’s called the Betamax. Sony released the first version of a VCR in the 1970’s called the Betamax. Many people in Hollywood claimed the Betamax would ruin sales of movies and movie rentals. Many people in Hollywood claimed the Betamax would ruin sales of movies and movie rentals. U.S. Supreme Court declared Betamax legal. U.S. Supreme Court declared Betamax legal. Movie rental sales did not decline. Movie rental sales did not decline.

22. Audio Home Recording Act In 1992, the Audio Home Recording Act was passed. In 1992, the Audio Home Recording Act was passed. This requires all manufactures of blank media to make royalty payments to the United States Copyright Office. This requires all manufactures of blank media to make royalty payments to the United States Copyright Office. The Copyright Office will then distribute those royalties to the proper people as compensation. The Copyright Office will then distribute those royalties to the proper people as compensation.

23. Losing money Since the age of file sharing, record companies have lost money. However, most of the reason for this has nothing to do with file sharing. Online piracy may just be a scapegoat for dropping record sales. The most popular albums still sell just as well.

24. Record companies can actually make money File sharing can actually increase sales of many artists. File sharing can actually increase sales of many artists. People can actually preview songs they would have never heard otherwise, and possibly be introduced to a new artist whose record they would purchase People can actually preview songs they would have never heard otherwise, and possibly be introduced to a new artist whose record they would purchase

25. Harmless Downloading Many people own mp3’s just to collect, and would never buy the album anyway. Many people own mp3’s just to collect, and would never buy the album anyway. Some of the pirated games are not made anymore or are not for sale. Some of the pirated games are not made anymore or are not for sale. Record companies should adhere to this new more convienent way of listening to movies or watching movies. Record companies should adhere to this new more convienent way of listening to movies or watching movies.

26. Present Status of the Napster Case As a result of the constant appeals, this case is currently on hold. As a result of the constant appeals, this case is currently on hold. Meaning that there is no exact way that the effects of this ruling can be predicted. Therefore I will be making logical projections as to what could occur. Meaning that there is no exact way that the effects of this ruling can be predicted. Therefore I will be making logical projections as to what could occur.

27. Possible Rulings If Napster were to win If Napster were to win This means that the service they provided does not constitute or facilitate copyright infringement. This means that the service they provided does not constitute or facilitate copyright infringement. If Napster Loses If Napster Loses This means that saying that if you share a file that is copyrighted by the music industry and you do not pay royalties to them, you and the service will be held liable and charge with copyright infringement This means that saying that if you share a file that is copyrighted by the music industry and you do not pay royalties to them, you and the service will be held liable and charge with copyright infringement

28. Effects of the Napster Ruling Whom it will effect? File Sharing and File Sharing Communities File Sharing and File Sharing Communities Freedom of Technology Freedom of Technology Music Industry Music Industry “Money” “Money” Artists / Musicians Artists / Musicians Incentive Incentive Government Government Copyright Laws Copyright Laws Definition of the Internet Definition of the Internet

29. File Sharing and File Sharing Communities IF NAPSTER WINS: IF NAPSTER WINS: Boom in the Information Technology Market Boom in the Information Technology Market More File-Sharing programs will be created and implemented by industrious programmers. More File-Sharing programs will be created and implemented by industrious programmers. Different types and higher performance Different types and higher performance For Example : For Example : Audiogalaxy, Gnutella and its offspring, and Morpheus. Audiogalaxy, Gnutella and its offspring, and Morpheus.

30. File Sharing and File Sharing Communities Increased Interest in File-Sharing Increased Interest in File-Sharing With more interest in file sharing sites comes more financial value. With more interest in file sharing sites comes more financial value. $$$$$More Money$$$$$ $$$$$More Money$$$$$ Increase in Internet Commerce Increase in Internet Commerce More Corporations will get involved in this new medium. More Corporations will get involved in this new medium. Why Stop at Music? With the increase in file sharing sites, there will be a demand for more. Movies Newscast Archived Television shows

31. File Sharing and File Sharing Communities IF NAPSTER LOSES IF NAPSTER LOSES File Sharing as a whole will be vulnerable File Sharing as a whole will be vulnerable Will set legal precedence for the RIAA (Record Industry Association of America) to apply to any site and community that shares music without permission. Will set legal precedence for the RIAA (Record Industry Association of America) to apply to any site and community that shares music without permission. DeCSS and other decryption programs will be partially outlawed. DeCSS and other decryption programs will be partially outlawed. Allows only the industry to market selected items Allows only the industry to market selected items not at the Napster Scale. not at the Napster Scale.

32. Music Industry IF NAPSTER WINS: IF NAPSTER WINS: The Music Industry has to address the Internet as a new medium. The Music Industry has to address the Internet as a new medium. Make the adjustment similar to the one made with radio stations and cassette tapes. Make the adjustment similar to the one made with radio stations and cassette tapes. Create new communities Create new communities Fan Clubs and other Music-based Communities Fan Clubs and other Music-based Communities

33. Music Industry IF NAPSTER LOSES IF NAPSTER LOSES The Music Industry will have a tighter grip on the music that is spread through the internet. The Music Industry will have a tighter grip on the music that is spread through the internet. The music that the industry wants to promote will dominate The music that the industry wants to promote will dominate

34. Artist / Musician Incentive Incentive Napster, hypothetically, robs artist of a reward for their work Napster, hypothetically, robs artist of a reward for their work therefore, hypothetically, an artist may not have the same incentive to create the best possible product. therefore, hypothetically, an artist may not have the same incentive to create the best possible product. Resulting in Poor Quality of Music Resulting in Poor Quality of Music

35. Government: Copyright law IF NAPSTER WINS: IF NAPSTER WINS: the government will be forced to augment the present Copyright Laws the government will be forced to augment the present Copyright Laws Napster case creates a legal precedence for internet pirating. (Worse Case Scenario) Napster case creates a legal precedence for internet pirating. (Worse Case Scenario) Lack of Protection for Artist Lack of Protection for Artist IF NAPSTER LOSES IF NAPSTER LOSES The Copyright laws remain the same but the enforcement of the Internet will have to be addressed The Copyright laws remain the same but the enforcement of the Internet will have to be addressed

36. Government: Internet Regulation Government Needed Intervention Government Needed Intervention Win or Lose, the Internet must be defined Win or Lose, the Internet must be defined Business, Entertainment, or Information Resource Business, Entertainment, or Information Resource Regulation Regulation Upon definition the guidelines of the Internet must be set Upon definition the guidelines of the Internet must be set Addressing the File Sharing Community Addressing the File Sharing Community The legal precedence may lead to the impedance of the access to information. The legal precedence may lead to the impedance of the access to information.