Meet the Napster

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Napster, insists Aydar, could not have been written by a team, nor could it have been written by anyone 21 or older. "Shawn could focus on problem solving--and there was no one to tell him he couldn't do these things. There was no one who ever really understood what he was doing. He didn't even understand the legal issues involved. It was such a cool idea that he never once stopped, never really came up for air."

Those issues--what Fanning knew and when he knew it--are now integral to the legal proceedings that will determine the future of digital music and perhaps the future of all industries that trade in intellectual property (see following story). Attorneys for the record industry have subpoenaed Fanning's e-mails and taken depositions from him, his uncle and other early Napster employees. Their contention is that Napster is guilty of something called tributary copyright infringement, which means Napster is being accused not of violating copyright itself but of contributing to and facilitating other people's infringement.

Which really means that if consumers are not guilty of breaking the law, then Napster cannot be found guilty. The issue may come down to what Napster lead attorney David Boies, who successfully prosecuted the Department of Justice's case against Microsoft, describes as "the definition of commercial or noncommercial uses." It is perfectly legal for consumers to copy music for their own enjoyment--i.e., noncommercial use. Congress has even declared, in the Audio Home Recording Act of 1992, that it is legal to make recordings and lend them out to people, provided it is not done for commercial purposes. It is unlawful, of course, if it's done to make a profit. "The law does not distinguish between large-scale and small-scale sharing or lending," insists Boies, who puts Napster's chance of winning the suit at fifty-fifty.

The record labels certainly disagree, and they have sought an injunction to shut down Napster, which U.S. District Judge Marilyn Patel granted in July. Although it was immediately stayed by federal appeals judges, the same injunction will be ruled on by a federal court as early as next week. That ruling is likely to determine the future of Napster.

The criterion for an injunction is, among other things, that the plaintiff should be able to prove that irreparable harm is going to occur between now and the completion of the case. That may not be so easy. Although Napster might seem to be taking sales away from the record companies, CD sales have actually increased in the Napster era--by $500 million this year alone.

If the injunction is upheld, Napster may be forced to fold. By the time the case reaches the Supreme Court, as it is likely to do, the company may be only a hazy memory in most computer users' minds. On the other hand, if Napster staves off the injunction, then the likelihood of a settlement with the record industry increases considerably. "Remember, as a lawyer I may be interested in this case because it raises policy issues," says Boies, "But from the client standpoint, what they want to do is get on with their business."