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God didn’t sue Johann Gutenberg for copyright infringement. Neither did the monasteries of Christian Europe, which, until Gutenberg’s invention of movable type in the 15th century, enjoyed a complete monopoly on Biblical texts. Richard H. Horning doesn’t see much difference between Gutenberg’s printing press and the Napster software that allows users to download and swap music files across the Internet on a peer-to-peer basis. Both the printing press and Napster software are technological advances allowing users a new level of access to content, says Horning, an intellectual property litigation partner at Palo Alto, Calif.’s Tomlinson Zisko Morosoli & Maser. He has represented the San Francisco-based Electronic Frontier Foundation in several high-profile Internet technology cases. “Consider the trafficking in alms that the monasteries enjoyed by having the only copy of the Bible,” Horning says. The monks, he says, probably suffered a real monetary loss at about the time printed Bibles began to be widely available. Morgan Chu, a partner in Los Angeles’ Irell & Manella L.L.P., agrees it’s an apt analogy. “There are usually a series of battles among different interests that unfold whenever there is some new technology,” he says. Professor Paul Goldstein, who teaches copyright law at Stanford University and is of counsel to San Francisco’s Morrison & Foerster, echoes that sentiment, saying that he’s seen a lot of sky-is-falling sentiments from content owners who fear Napster and videodisc de-encryption technology. “The sky is not falling,” he says. He points to a series of similar concerns that date back through the development of piano rolls, radio broadcasts of recorded music, videotape cassettes, and home video machines. Charles Dickens, he notes, complained bitterly that his novels were being pirated by the more efficient U.S. publishing companies. And Goldstein predicts that eventually the content owners will come up with a pricing model “high enough to give them a decent return, but low enough so users will be disinclined to go through the trouble of hacking.” The most successful model, he says, came about as the result of the movie studios’ loss of a copyright case involving home-use videotape, Sony Corp. of America v. Universal City Studios Inc., 464 U.S. 417 (1984). “Video rentals now rival box-office receipts for the studios.” THE NAPSTER RULING In the most recent court case involving new technology’s access to content, the content owners won, at least for the moment. On July 26, in A&M Records v. Napster, No. C99-5183, Leiber v. Napster, No. C00-0074, U.S. District Judge Marilyn Hall Patel issued an injunction that would have shut down the Napster Web site at midnight Friday, saying that Napster supported “such a wholesale copying effort” that “I just can’t let it go on.” The 9th U.S. Circuit Court of Appeals granted a stay of the injunction hours before it was to go into effect. Russell J. Frackman, a partner at Los Angeles’ Mitchell, Silberberg & Knupp, had argued on behalf of the music industry, saying that 90 percent of the music downloaded by Napster users is copyright protected, but that the artists, retailers, the union members behind the scenes, and the distributors receive no compensation. He said that Napster could prove to be the destruction of the music industry’s business model. The Napster legal team, led by David Boies of Armonk, N.Y.’s Boies, Schiller & Flexner, is appealing the ruling to the U.S. Court of Appeals for the 9th Circuit. Boies led the government team in the antitrust case against Microsoft Corp., and Patel provoked laughter in the overflow courtroom by calling Napster “the Microsoft of the industry.” But the solution to invasion by new technology is simple enough says Chu: develop a new kind of business model — “not to frustrate technology, but to leverage it.” He declines to discuss the advice his firm is giving to clients. But he does say that “at a theoretical law firm with a hypothetical content-company client, developing new business models has to be a major topic of discussion, and the far-sighted business executives will see the new technology as a great opportunity.” Litigation isn’t the best way to settle these disputes, Chu says, but is inevitable. “People who run these companies — indeed, most human beings — abhor change of any kind,” he says. “If you have a model that has been successful for the past 20 or 30 years, you’re reluctant to turn it upside-down. “Content owners may be successful in a series of battles protecting their view of copyright law in business models. But the technology will eventually force people to adopt different business models.” FOLLOWING EUROPE Mark F. Radcliffe, a partner in Palo Alto, Calif.’s Gray Cary Ware & Freidenrich, suggests that European countries will provide the model. He notes that, in Germany, part of the fee that people pay to use a photocopy machine goes into a pool that is distributed to copyright owners. A levy is charged on blank tapes so that some revenues go to the music industry. “We need to understand that, as the technology gets easier and easier to use, there’ll be much more personal copying,” he says. But there are “a whole bunch of ways the record companies could blow this opportunity,” Radcliffe warns. They could fail to make the new music available rapidly enough, develop an overly complex downloading technology, or charge too much per download, all of which would encourage illegal copying. For the moment, though, companies that are planning to develop new Napster-like technologies may find themselves cash-starved. Radcliffe predicts that venture capital firms will be leery of companies that may become targets of copyright infringement suits. Says Radcliffe, “Venture capitalists make lemmings look like rugged individualists.” Carey R. Ramos of New York’s Paul, Weiss, Rifkind, Wharton & Garrison is representing songwriters and music publishers in the Napster dispute. He notes that content owners are already involved in discussions with companies working on a technology to insert a meter on peer-to-peer Internet music exchanges that would provide revenues to his clients. “A solution that would provide for the payment of royalties is of interest to our clients,” he says.

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