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Feb 4, 2002 Music Labels In Cover-Up Mode The ongoing Napster case has brought up vital legal issues which have placed the record companies down shit's creek without a paddle. The alert Napster defense attornies have turned the tables on an institution which once thought of itself as untouchable. There is a god after all. Here is a legal case which is directly related to the Napster litigation and involves copyright misuse. The following analysis about the case is also provided in the article: "Although the specific holding of the case invalidates a copyright based on the owner's condition that a licensee agree to a noncompete provision to obtain access to a license, the implications of the case go far beyond this ruling. Once the Pandora's Box of copyright misuse is opened, other practices may fall afoul of this doctrine as well. For example, defendants in copyright suits may claim the right to examine every license agreement that the plaintiff has ever entered into to, find possible bases for claiming misuse. Defendants can be expected to argue that every restriction on use or conduct imposed by a copyright holder beyond those expressly authorized by the Copyright Act constitute misuse, thereby invalidating the copyright." What does this have to do with the Napster case? Plenty. In June of 2001, Napster signed an exclusive deal with music subscription service MusicNet, which may not permit Napster to offer content from the other two major record labels, Sony and Vivendi Universal. Here is an article relating to the Napster-MusicNet contract agreement. Since Napster is a copyright defendant, they apparently have the right to request to examine every license agreement the record labels have entered into. This request would permit Napster to attempt to discover any potential copyright misuse engaged in by the labels. It would also look into questions involving copyright ownership by the labels. Now here is the kicker: Napster can argue that any restrictions on use of the copyright material imposed by the labels which go beyond those expressly authorized by the Copyright Act (such as the MusicNet agreement not permitting Napster to offer music from competitors) constitute misuse, thereby invalidating the copyright. Wow! The Napster agreement is just one example where this may apply. How many other agreements have the labels entered into where copyright misuse may apply? Since the exclusivity clause is included in the Napster agreement with MusicNet, are these types of conditions included in other contractual agreements the labels have entered into in the past? If this is the case and found to constitute copyright misuse, such a situation may lead to the invalidation of an enormous amount of copyrighted material which the labels "claim" to own. Since Judge Patel in the Napster case was more than willing to have Napster investigate these explosive copyright misuse issues, you can see why the labels are, all of the sudden, in a hurry to shut down the Napster case. An inquiry into the labels' copyright holdings in the Napster case may expose both copyright misuse (which may invalidate the labels' copyrights) and it also may determine the labels actually do not own the copyrights to the material they are claiming to own. Either way, the labels are screwed! Although it is obviously in the labels best interests to shut down the Napster case immediatelty (this is quite a change of heart from the labels previous aggressive, win at all cost attitude), the next time around the labels may not be dealing with a company like Napster, which is owned by BMG and obviously has no intentions to take this all the way. Therefore, copyright reform will not come from politicians, who have only made the copyright laws more absurd and label friendly over the years. Eventually, reform will come from a legal case which brings into the open potential copyright misuse issues. Sphinx |
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