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INTRO 00'23": Six years ago, Napster emerged as one of the first so-called "peer-to-peer" software programs. It made the transfer of unauthorized copies of music from computer to computer very easy. Now one of its descendants, Grokster, finds itself in similar circumstances. Earlier this week, the Digital Music Forum in midtown Manhattan examined the future of music. Cyrus Farivar was there and filed this report.
NARR 00'55" : One of the things that was on everybody's mind at the Digital Music Forum on Wednesday was Grokster's looming legal battle, headed soon for the U.S. Supreme Court. One panel discussion on the case was heavily attended. Formally known as MGM versus Grokster, the case pits a group of film companies and record labels against another corporation that makes software used to trade unauthorized copies of films and music. Last year, the 9th U.S. Circuit Court of Appeals in San Francisco ruled that Grokster could not be held criminally liable for copyright infringement. The court based its ruling on a U.S. Supreme Court decision from 20 years ago. That decision, known as the Sony Betamax ruling, legalized the VCR even though Hollywood argued at the time that it would destroy the movie industry. Grokster and its supporters maintain that declaring them liable would limit technological innovation. Attorney Adam Eisgrau represents peer-to-peer software companies. He said that the Sony decision should stand.
TAPE 00'21" : But the fundamental core of that decision must be preserved. That innovators can and should and must be allowed to innovate in all of our interest without having to listen to the little voice on the shoulder of their lawyer -- dare I say: 'No, I'm not sure you want to think about that, that could be problems.'
NARR 00'11": On the other side was EMI Music attorney Victoria Bassetti. She maintained that Grokster's whole business model was based on drawing users to a service that provides unfettered access to unauthorized copies of music.
TAPE 00'28": Well, we live in a world where you do have to listen to the voice of your lawyer because sometimes your lawyer's telling you -- that's illegal. [Laughter.] So you know you should listen to the voice of your lawyer on your shoulder and ignore the voice of the little devil every once in awhile. And I think the 9th Circuit created a situation where you listen to the devil more than you listen to the lawyer who's telling you what you're doing is illegal or is cutting close to the line.
NARR 00'23": At another panel, the audience heard from the man who started the whole peer-to-peer frenzy. Shawn Fanning created Napster from his college dorm room in 1999. Within two years, Napster shut down after the courts found that it facilitated copyright infringement. Fanning, who is now 24, spoke at the forum about his new company, Snocap. The company acts as a broker between record labels, artists and the peer-to-peer networks.
TAPE 00'22" : I think that there's a strong need for a means of rights clearance that would effectively level the playing field. There's a single database, it facilitates rights clearance, it facilitates identification of content so you can determine for a given track, who owns it, what that track is.
NARR 00'23": Fanning says that Snocap uses "audio signature recognition technology." It identifies songs much in the same way that fingerprints identify people. This technology would provide a way for record companies, or even independent artists to charge for their work, to allow their work to be traded, or to prevent it from being traded. But Fanning says that would require a big agreement between peer-to-peer companies and record labels.
TAPE : 00'15" The majority of them are businesses trying to find means of generating revenue. To date it's been primarily advertising and spyware. I think the problem is there's been a deadlock in the industry that has prevented the two parties from working together because of the outstanding litigation.
NARR 00'21": Snocap's founder says there has been some agreement between the two often opposing parties. Just yesterday, the company announced its first deal with record label Sony BMG. While Snocap waits for future record companies to sign on, the U.S. Supreme Court is set to hear oral arguments in the Grokster case on March 29, 2005. Cyrus Farivar, Columbia Radio News.