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Most people think of the Napster case, in which therecord industry sued a popular song-swapping service for piracy, as over anddone with, consigned to the annals of Internet history. After all, it has been nearly a year since the 9thU.S. Circuit Court of Appeals issued its opinion in A&M Records v. NapsterInc., 239 F.3d 1004, upholding a lower court’s preliminary injunction thateffectively put the free-wheeling Web site out of business. But in the words of a certain baseball legend, “itain’t over till it’s over,” and Napster, which was remanded to thedistrict court, continues to spin out interesting legal issues. In the latest development, Chief Judge Marilyn Hall Patel of the Northern District of California is requiring the record labels to prove thatthey own the digital rights to the 213 songs they claim were pirated over theNapster network. Copyright lawyers are watching the case closely. “Themusic industry is a bellwether, because the general public has a very differentperception of their rights to music than to other creative works [such as booksand movies],” said Brian Mudge, a partner at Kenyon & Kenyon’sWashington, D.C., office. But on this particular issue, the case actually has plentyof company. In the last year, the digital copyright question has been raised inat least four federal cases, and is pending in several others. “There’s a tremendous amount going on,” said RoseAuslander, a partner with New York-based Carter Ledyard & Milburn. “And it’s allinterwoven in the root issue [of digital rights].” Neil Boorstyn, counsel with San Francisco’s McCutchen,Doyle, Brown & Enersen and the special master in Napster, isreviewing the records submitted by the labels to determine whether they holdthe digital rights to each song. “Maybe the record labels do own the rights,” saidSteven M. Cohen, a partner at New York’s Kronish Lieb Weiner & Hellman, whois representing Napster. “But how do we know and aren’t we entitled toproof?” Russell J. Frackman, a partner at Los Angeles’ MitchellSilberberg & Krupp and counsel for the labels, said he is confident thespecial master will find his clients own the copyrights. “It’s their business to own these copyrights,” hesaid. “This is just another delaying tactic to put off the ultimate day ofreckoning when judgment is entered against Napster.” SENSITIVE ISSUE Frackman’s confidence notwithstanding, this is a sensitiveissue for the labels in light of their current battles with musicians overonline distribution and the rights to old recordings. And the other court decisions out there might give Frackmanpause, although he claims they do not. None of the decisions issued so far hasfound that traditional copyright encompasses digital rights as well. Three of the digital copyright cases have involved thepublishing industry, who were slower than the movie and music industries totighten up their licensing agreements to take into account new mediapossibilities. The first case to tackle the issue, Tasini v. New YorkTimes, pitted free-lancers against publishers who were selling digitalversions of their articles to the online database Lexis Nexis. The case endedup at the U.S. Supreme Court, which held last year that the Copyright Act didnot give publishers the unfettered right to make and sell digital reprints offree-lance articles. Rather, the high court found, the publishers could reprintthe free-lancers’ work only if it was in the same context in which it originallyappeared, such as microfiche. Since the articles could be electronicallysearched and individually retrieved, they were not covered. Just six weeks later, while publishers were still figuringout what to do with Tasini, the 11th Circuit dealt them another blow. In Greenberg v. National Geographic Society, 244 F.3d 1267, the court foundthat the National Geographic Society could not produce CD-ROM compilations ofold magazines without the permission of the free-lancers whose works were used.Even though they were exact reproductions, the court ruled the compilation wereunlike a microfiche because they were searchable and included an animatedintroduction. TWO 2ND CIRCUIT CASES Now, the 2nd Circuit is grappling with what Carter Ledyard’s Auslander described as a “next generation” case. Right around thetime of the Tasini and Greenberg decisions, Random House suedelectronic publisher Rosetta Books in the U.S. District Court for the SouthernDistrict of New York for selling e-versions of eight books the publishing househad previously released in paper form, including Kurt Vonnegut’s”Slaughterhouse-Five” and “Cat’s Cradle,” and William Styron’s”Sophie’s Choice.” Earlier this month, in affirming the lower court’s denial ofinjunction relief, the 2nd Circuit voiced skepticism at Random House’s claims.Although the publishing house’s argument had “some appeal,” it wrote,under New York state’s restricted view, digital rights are not covered unlessexpressly provided for in the contract between the author and publisher. The 2nd Circuit has another digital rights case on itsdocket, involving claims by a group of old R&B bands who are trying to stopthe record labels from transmitting their songs over the Internet. Last month,in Chambers v. Time Warner Inc., 2002 U.S. App. LEXIS 2652, the circuitcourt overturned a lower court’s dismissal of the case, finding that it hadimproperly considered unsigned drafts of contracts as evidence. The lawsuit isseeking class action status on behalf of all musicians who recorded songsbefore 1996 and do not have a current recording contract. BATTLE ON THE HILL The digital rights battle is being fought on Capitol Hill aswell. In previous years, the media industry has found a sympathetic ear inCongress, which passed the highly controversial Digital Millennium CopyrightAct and Sonny Bono Copyright Extension Act in 1998, both of which strengthenedcopyright protection. Media companies are once again knocking on Congress’ door.The Senate Judiciary Committee is holding hearings on a raft ofHollywood-backed proposals to force companies to insert content-protectiondevices in their products. Of these, the most controversial is the SecuritySystems Standards and Certification Act, which would require electronicsmanufacturers — who make DVD and MP3 players — to incorporate anti-copyingtechnology in their products and make it illegal for consumers to remove it. Out of the public eye, lawyers are also re-examininglicensing agreements to make sure they take new technology into account. “The music and motion picture industries have alwaysbeen very careful with their contracts,” said Jonathan Reichman, a partnerat Kenyon & Kenyon in New York. And since Tasini, publishers havecleaned up their contracts as well, he added. Still, the advent of the Internet has been a wake-up callfor copyright lawyers. “People definitely negotiate for ‘rights in any andall media now known and hereinafter developed,’” Reichman said. “Anysavvy attorney today would make sure that language is in there.” Auslander said there is also a larger issue at hand. How thedigital rights debate plays out in these different arenas will ultimately shapehow consumers use the Internet, she said. “We really are at a historic point,” she said.”We have an engine for distribution unparalleled in history.” “The challenge is to balance facilitating this amazingaccess while still protecting ownership in creative works,” Auslandersaid.

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