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No one could have missed the battle over peer-to-peer file sharing, where digital files, music for the most part although now also increasingly movies, are exchanged between computers on the Internet. The U.S. and Canada, though, have different views about whether it’s right or wrong. The earliest file swapping software, Napster, relied on a central server that listed who had what on their computer. It was shut down fairly quickly, since one company had control over the directory that was needed to run the whole operation. After that, though, peer-to-peer, or P2P, software developed, with files moving directly from user to user without the need for a central directory, which is also much more difficult to shut down. Unlike analog files, a digital file can be copied many times over without (in theory) any degradation in quality, so there is no natural limit on the number of generations of copies. In the record and movie industries’ opinion, this makes file swapping far more harmful than past varieties of copying, since users will have no reason to purchase music and movies when they can get free copies that are just as good as the original. Advocates of file swapping instead argue that listener sampling does not harm anyone (because no one would actually be buying that much content anyway) and may ultimately lead to increased sales as consumers are exposed to more variety. In the United States, various tools are used to try to stem the ever-growing perceived threat. One provision of the Digital Millennium Copyright Act, passed by Congress in 1998, made it easier to find out the identity of file swappers without having to actually file a lawsuit. The U.S. recording industry has also filed numerous well-publicized copyright infringement lawsuits, both against the companies distributing the file swapping software and against individuals, to try to convince users that file sharing is both wrongful and risky. As a result, it is now fairly well-accepted in legal circles in the United States that file swapping is illegal. But just across the border, the Canadians look at it a little differently. First, in Canada, the Copyright Act states says that “the act of reproducing all or any substantial part of a musical work embodied in a sound recording onto an audio recording medium for the private use of the person who makes the copy does not constitute an infringement of the copyright.” So, in Canada, ripping music to a computer is explicitly allowed under its law. In the United States we assume this is true, but its never been tested in court. But Canada has gone even one step further. In a case earlier this month where the Canadian Recording Industry Association was seeking the identity of file sharers (albeit without the special mechanism available in the U.S.), the trial court opined that there was nothing wrongful about merely placing copied music files into shared directories, and, since the individuals had done nothing wrong, it refused to require the disclosure of their identities. The Canadian court said putting files in a shared directory was no different than a library placing a photocopy machine in a room full of copyrighted material, which is just not a copyright infringement. It appears now, assuming the decision is not overturned on appeal, that in Canada the only recourse is against the person actually taking a copy from the shared file folder, a person who cannot be easily identified. Compare this to the United States. Here, we have assumed almost from the beginning that the people making the music available through the Internet on shared directories are themselves engaged in illegal activity, only fighting a battle over whether the P2P file sharing software itself is infringing. When file swappers are caught, it appears that almost all of them have acquiesced, paying the record companies to settle the suit. So who’s right, the U.S. or Canada? Is file swapping a threat to the very core of our artistic endeavor, or does business just need to figure out how to rely less on exclusivity and more on business acumen? Only time will tell, but it will be interesting to watch both models and see which triumphs.

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