A legal matter: peer-to-peer file sharing, the Digital Millennium Copyright Act, and the higher education opportunity act: how Congress and the entertainment industry missed an opportunity to stem copyright infringement.

• Author: Storch, Joseph

"Only one thing is impossible for God: to find any sense in any copyright law on the planet."--Mark Twain (3)

1. START ME UP: (4) AN INTRODUCTION TO HIGHER EDUCATION AND PEER-TO-PEER FILE SHARING

   A palpable tension has existed between higher education and the content industry since the advent of peer-to-peer ("P2P") file sharing software. There have been several attempts by both higher education and the entertainment industry to negotiate a workable compromise, including the Joint Committee of the Higher Education and Entertainment Communities Technology Task Force (5) and the Digital Citizen Project. (6) Alas, no compromise was ever achieved. The P2P file sharing regulations included in the Higher Education Opportunity Act ("HEOA") are the latest chapter in a story of an industry that has pressured colleges and their students, as well as an amenable Congress, to force higher education institutions to act against illegal file sharing and the technology that supports it. The unfortunate result of more than a decade of struggle over the issue is legal requirements that will create some additional work for colleges, but do little to stem the problem of illegal file sharing.

   The only constant about both music and technology is change. For hundreds of years, songs were passed down orally from person to person, and later through sheet music. Only recently have sound and video recordings been mechanically or digitally captured to be shared the world over. For much of that relatively brief time, individuals could listen to the music captured on the recorded medium (e.g. phonograph records), but had no power to change the recording, what Professor Lawrence Lessig referred to as the ""Read/Only' ('RO') culture."' (7) Those who held the copyright and controlled the rights to music could manufacture and sell as many records as desired (or as the market would support), confident that one would need the record to listen to the music. That is, even though buyers could resell or trade the record, once they did so, they no longer possessed that original record,s

   1. Video Killed the Radio Star9

      The world changed somewhat with the advent of recordable tape. Around the time that the Buggles' Video Killed the Radio Star (10) kicked off Music Television (MTV) (11) in August 1981 for a changing music audience, individuals acquired the ability to record and share music, albeit rudimentarily at first. This process became easier as blank tape prices plunged. In fact, Congress legalized the consumers' right to make non-commercial recordings of music, including recording songs played on the radio onto cassette tapes.12 The quality of these second and third generation recordings improved as music fans began to record tapes from compact discs ("CDs") for trade or resale. The concomitant harm to this technological advance was that recording companies, and the musicians who rely on sales to make a living, saw diminishing profits due to sales or trades of dubbed recordings. The way that society listened to music was changing as well. Music had generally been consumed in groups until the early 1980s when consumers plugged headphones into a new device from SONY called the "Walkman" and, for the first time, enjoyed a solitary experience listening to music they chose themselves. (13) Just shy of twenty years after Video Killed the Radio Star's debut, a college sophomore began the process of "Digital Kills the Compact Disc Star." The digital music revolution began on June 1, 1999, when nineteen year old Shawn Fanning shared the beta version of his Napster software. Within a few days, an estimated 10,000 to 15,000 people had downloaded the file-sharing software.

   2. I Fought the Law (and the Law Won) (14)

      The recording companies, which had become accustomed to high margins from CD sales by multiplatinum artists, (15) were not pleased, and Napster, at least in that incarnation, was not long for this world. Within a year of distributing the original version of the Napster software, the Recording Industry Association of America ("RIAA"), heavy metal band Metallica, and rap artist Dr. Dre, had all brought suit against the startup. (16) Metallica and Dr. Dre's lawsuit also initially named three universities, the University of Southern California, Yale University, and Indiana University, and the band's management company issued a statement that said, "[f]acilitating that effort are the hypocritical universities and colleges who could easily block this insidious and ongoing thievery scheme." (17) The universities were later dropped from the suit. (18)

      The Napster case provided a glimpse into the future. In March 2001, the Northern District of California issued a revised injunction ordering the RIAA to provide Napster with a list of their copyrighted material. Napster was then to filter their system and remove all such infringing content. (19) Despite testing filtering technology based on digital "fingerprints," Napster found it technologically impossible to achieve a one hundred percent effective removal rate.2o In July 2001, Napster settled with Metallica and Dr. Dre, conceded defeat, and ceased operations. (21) Yet, like the proverbial mystical Learnaean Hydra, when Napster was shut down, many other file sharing options sprung up in its place. Since the technological requirements to develop file sharing software were not onerous for those (especially young) individuals with the requisite knowledge, P2P file sharing spread across the Internet like wildfire. Students, and increasingly non-students, (22) found myriad ways to share music files (and increasingly movie and book files) without paying any compensation.

      Later that year, the entertainment industry found a new litigation target--the companies that distributed software to facilitate P2P file sharing. (23) In October 2001, a conglomerate of thirty music publishers, composers, and movie studios filed suit against Morpheus, KaZaa, and Grokster, three services that had established themselves as major players in the market for file sharing after Napster shut down. (24)

      All three companies distributed software that licensed technology based on the KaZaa protocol. (25) This new technology enabled users on all the other computers connected to the network to exchange files directly without the use of any centralized system or server. (26) The file sharing companies earned revenue by serving advertisements into the end users' software each time they ran the program. (27) At the time the suit was filed, thirty-four million copies of the software had been downloaded, and in September 2001 alone, 1.5 billion songs were exchanged. (28)

      In April 2003, the District Court ruled in favor of the companies that distributed Morpheus and Grokster. (29) The judge found that the companies were akin to those which created the VCR, another technology that enabled users to make personal copies of content. (30) The software, in essence, was capable of substantial non-infringing uses. (31) And the decentralized nature of their operations rendered the software companies unable to control or monitor the activities of end users. Therefore, the judge found, they were not liable for the actions of those end users. In August 2004, the Ninth Circuit affirmed the lower court's decision. (32)

      The entertainment companies petitioned the Supreme Court to overturn the Ninth Circuit's decision in October 2004 (33) and the Court agreed to hear the case. (34) In June 2005, the Supreme Court unanimously ruled in favor of the entertainment companies, holding the software companies liable for intentionally inducing infringement. (35) The court reasoned that the software distribution companies could be sued because their business activities showed a "purpose to cause and profit from third-party acts of copyright infringement," and remanded the case to the District Court. (36) The parties settled that November. (37) The terms of the agreement required Grokster to terminate its service, cease distributing the software, and pay $50 million. (38) However, despite the entertainment companies' victory, file sharing activity continued to increase. (39) As with the death of the original Napster, disaggregation of file sharing software continued. With the corporate side of these instant defendants felled by lawsuits, (40) other services sprang up to take their place, including a reborn Napster offering a subscription-based service. (41) Most recently, a court ordered that file sharing service LimeWire disable its software. (42) The impact of this most recent decision remains to be seen.

   3. Money (That's What I Want) (43)

      Unable to silence the companies that distributed the P2P file sharing software, or to stem the increasing popularity of devices used to play MP3 files, (44) the recording industry, and later other content producers, turned their attention to the group of individuals that they felt were engaging in the largest amount of illegal file sharing: college students. Industry representatives began sending scores of Digital Millennium Copyright Act ("DMCA") "takedown notices." (45) As explained in Part II, below, such notices allege infringing activity and request that the alleged infringing content be removed from servers managed by the Internet Service Provider ("ISP").

      Additionally, the industry began filing lawsuits against students who it alleged were illegally sharing songs and other content. (46) As part of that process, the industry sent subpoenas to institutions for Internet Protocol (47) records. Some colleges opposed this process, moving to quash subpoenas. (48) The companies also asked colleges to forward pre-litigation settlement letters that offered students the opportunity to settle their own cases, and avoid potential future lawsuits, for an upfront payment of several thousand dollars. (49) The recording industry "helpfully" set up a Web site where students (or their parents) could pay these thousands of dollars by...