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Downloading in a Post-Napster World: For years, copyright holders and their advocates have worked to guard and protect the exclusive rights given to copyright holders by statute,1 including the exclusive right to reproduce, perform and distribute copyrighted works.2 Such exclusive rights create unlimited revenue streams for the copyright owner, as only the owner (a person or entity), has the right to license uses such as downloading music over the Internet, playing music in airports and elevators, and reproducing films on DVDs. However, consumers began to download and exchange music and film files over the Internet without obtaining the copyright owner’s permission through the form of a license. As such, some observers maintain that this behavior violates copyright owners’ exclusive rights to reproduce, publicly perform, and distribute their copyrighted works. In response to this trend, copyright owners began a strong push in the 1990s to convince Congress to pass laws designed to stop what they advocate as “illegal” downloading and exchange of their copyrighted works over the Internet. Also, copyright owners and licensors began to attach Digital Rights Management (DRM) tools to their compact discs (CDs), DVDs, and digitally downloaded products. Further, as part of DRM, copyright owners and/or their licensors have allowed consumers to download their copyrighted product for only a limited amount of time. In addition, these owners offer the availability of extended rights to listen to or otherwise use the copyrighted work if the consumer purchases the copyrighted product or subscribes to a service with unlimited downloading capabilities of that work. Often, consumers who purchase the work also must purchase the devices that work with the service offering the copyrighted work for download (e.g., iPods for music downloaded from the iTunes online store). Creative consumers however, have found ways to circumvent DRM measures as they continue to download and exchange copyrighted works. In response, federal lawmakers passed the Digital Millennium Copyright Act (DMCA), enacted in 1998, which outlines civil and criminal penalties for the circumvention of DRM technologies.3 As expected, opposition to DRM exists on the basis that DRM unfairly chills and/or violates consumers’ rights of Fair Use4 and First Sale,5 which are both legitimate exceptions to the Copyright Act. Further, the opposition argues that the DMCA could unfairly subject legitimate purchasers of copyrighted works, who use them in accordance with the Fair Use or First Sale doctrines, to exorbitant fines or prison time for enjoying their purchases on mediums other than the original one delivering the download (i.e., burning a downloaded song to CD for use in a car or MP3 player, versus only being able to enjoy it on a computer, both forms of “space-shifting”).6 Is this a meritorious argument, or do DRM measures really violate consumers’ right to personal use under the Fair Use doctrine? Fair Use, notwithstanding the exclusive rights outlined in Section 106 of the Copyright Act, grants the right to exercise the exclusive rights normally reserved for the copyright owner under Section 106, for purposes of “criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research.”7 Such uses do not infringe on a copyright owner’s exclusive rights. Further, the Fair Use statute lists four factors that courts may use in determining whether the non-copyright owner’s use is fair:
Without much complete litigation on this issue, courts have not provided a bright line rule regarding DRM and the Fair Use Doctrine. This issue probably will surface soon in litigation surrounding online distribution of copyrighted works, as several DRM lawsuits have been filed in the last year. Consumers across the country and the Texas attorney general filed lawsuits against Sony BMG Music Entertainment for the adverse effects its copy protection software, which is part of DRM, has had on consumers’ computers. One New York class action against Sony BMG Music Entertainment, In Re SONY BMG CD Technologies Litigation, involved the consolidation of six complaints filed in the Southern District of New York in late 2005.9 The plaintiffs alleged that certain CDs with DRM applications exposed their computers to security risks that would not have otherwise occurred but for the automatic download of Sony’s copy protection software on their computers.10 The plaintiffs contended that once the CD loaded, the XCP or MediaMax versions of copy protection software automatically loaded onto their computers’ hard drives, without an option to decline the protective software. Thereafter, their computers became vulnerable to third party “malware,” which includes viruses or applications of software whose purpose is to steal the consumer’s confidential information on the hard drive.11 The In re Sony case, which has now been settled (as of this writing, however, Texas has not settled with Sony), demonstrates an example of DRM gone wrong and supports many anti-DRM advocates’ positions that DRM use is overreaching. Thus, what can this case teach consumers about Fair Use implications? The CDs in the In re Sony case included copy protection features, which allowed the consumer to download the purchased music on to the computer, a portable device(s), and only three blank CDs.12 Thus, the copy protection allowed the purchaser to upload music to his computer; however, for the sake of argument, let’s assume that the CDs copy protection did not grant any licenses for uploading its music on to the purchaser’s computer or for copying to blank CDs. In that fact scenario, Fair Use advocates may argue that the presence of the copy protection unfairly limits the purchaser’s right to make personal copies of the CDs purchased. They would likely argue that copying a CD for personal, non-commercial use constitutes Fair Use and that the presence of copy protection, a measure often used under DRM, violates a purchaser’s right to personal use by preventing copying of the work. Alternatively, copyright owners would argue that any unauthorized copying of the Sony CD violates the copyright owner’s exclusive rights, regardless of whether it was for personal use. In applying the first factor of the four factor Fair Use test outlined above, to this scenario, the Fair Use advocates may argue successfully that the purpose and character of the use in this situation is strictly personal and without commercial gain. The advocates, however, do not fare as well regarding another element that the courts have added to the first prong. The court, in A&M Records, Inc. v. Napster, Inc., (“the Napster court”) discussed an additional element of the first requirement under Fair Use: whether the copied work is “transformative,” which entails a determination of whether the work “merely replaces the object of the original creation or instead adds a further purpose or different character.”13 Citing the United States Supreme Court, the Napster court stated that courts should determine “whether and to what extent the new work is transformative” and explained that courts “have been reluctant to find fair use when an original work is merely retransmitted in a different medium.”14 Thus, with regard to the “transformative” analysis in this situation, Fair Use advocates would not be able to surmount the transformative factor in the first requirement because there was nothing new added to the work—a mere copy was made. As to the second factor of the Fair Use test, the nature of the CD is creative or expressive. Thus, the viability of the advocates’ Fair Use argument is likely to fail if it depended only on this factor. The third factor concerns the amount and substantiality of the portion used in relation to the copyrighted work as a whole. Although copying an entire CD does not seem fair, “copying a protected work in its entirety does not mean that it cannot be fair use, per se, [but] it militates against a finding of fair use.”15 Clearly, this position does not help the advocates’ case for fair use either. Finally, the fourth factor concerning the copyrighted work’s value or the use of a copy on the potential market, gives the advocates a light at the end of the tunnel. The effect of a personal copy of the CD on the potential market would be negligible, but only if the purchaser decided to make a few copies and not make it available for a large number of people. Courts have held that making a single copy available to millions of people, who could potentially make copies, although the person making the copy available does not charge a fee, is still commercial use.16 Therefore, Fair Use advocates would likely fail on all but the final factor of the effect on the potential market; however, if the courts consider the potential of one copy to give birth to millions of copies, quite possibly eliminating a market for that particular CD, the advocates would probably fail on this factor as well. Courts are likely to rule that DRM does not violate a purchaser’s Fair Use of CD’s in this scenario. But if DRM continues to ravage personal computers the way it has, such as in In Re Sony, and more and more consumers are affected by it, there may be enough public outcry to end DRM’s current use. Of course, the complete elimination of DRM would make copying of copyrighted CDs and DVDs easier, bringing a smile to Fair Use advocates’ faces, but, for now, such measures are wishful thinking as the courts have repeatedly ruled against downloading, copying and distribution of downloaded works as Fair Use. Until the courts rule differently, most Fair Use challenges against DRM will not prevail.17 Seemingly, the constitutionality of the DMCA will be upheld by future cases as well.18 Accordingly, it seems that the best way for consumers to avail themselves of the Fair Use Doctrine in this type of scenario is to, at the very least, ensure that they can show that copying for personal use can be restricted to home use. Carol Y. Guess is the principal of The Guess Firm, P.L.L.C., a boutique law firm with practice areas in entertainment, business, intellectual propery, and litigation. The Guess Firm’s clients include multi-platinum and gold certified songwriters, producers and recording labels, among others. She is a graduate of Vanderbilt University and Thurgood Marshall School of Law, and is a council member of the Entertainment and Sports Law Section of the Houston Bar Association.
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