This is a very interesting article from WSJ.com on the Judge's decision in the MP.3 case, normally off topic, but note the rule of law cited in the case re copyrighted material such as Windows 98.
Just as MP3 distributes the work of Metalica, so VARs distribute the work of MSFT.
May 4, 2000
Document Explains Judge's Ruling
For Record Firms vs. MP3.com
By LARRY NEUMEISTER
Associated Press
[The U.S. Constitution and the Copyright Act give companies with copyrights the right "to curb the development of such a derivative market by refusing to license a copyrighted work or by doing so only on terms the copyright owner finds acceptable," he said.]
NEW YORK -- A federal judge says it wasn't a close call when he found that the Internet-based music service MP3.com Inc. infringed on the copyrights of the nation's major record companies.
"The complex marvels of cyberspatial communication may create difficult legal issues; but not in this case," Judge Jed S. Rakoff wrote in a legal opinion filed Thursday in U.S. District Court in Manhattan.
MP3.com Has Infringed on Copyrights of Five Record Firms, Judge Decides (May 1)
The 10-page opinion explained the reasons that he issued a one-page order last Friday in favor of the record companies.
He rejected several legal arguments by MP3.com, including the claim that the company does not violate copyrights but instead provides a useful service to consumers who otherwise would be served by "pirates" on the Internet.
"Stripped to its essence, defendant's 'consumer protection' argument amounts to nothing more than a bald claim that defendants should be able to misappropriate plaintiffs' property simply because there is a consumer demand for it," Judge Rakoff wrote. "This hardly appeals to the conscience of equity."
The rulings were a legal blow to MP3.com, a San Diego-based company that has promised to appeal Judge Rakoff's findings.
Judge Rakoff said it "is clear" that MP3.com has infringed the copyrights of Sony Music Entertainment Inc., Warner Bros. Records Inc., Arista Records Inc., Atlantic Recordings Corp., Capitol Records Inc. and others.
Although the ruling Friday initially caused the value of MP3.com's stock to fall by more than 30%, the stock has since recovered as the company suggested it would eventually reach a settlement with the record companies.
MP3.com President Robin Richards said there were no surprises in the written decision.
"The marketplace is moving beyond the speed that the courts can digest it today," he said. "It's time to get all this stuff out of the courts and into the boardroom and continue what has been very good negotiations to arrive at a business resolution."
He said the number of dollars to be paid to the record companies did not dominate negotiations as much as how to "blend this old world and new world together" to benefit artists, record companies, MP3.com and the consumers.
"I feel very upbeat about what's going to happen with MP3.com and the labels," he said.
Michael Robertson, MP3.com's chief executive officer, has said the judge was criticizing a new product that accounts for only 4% of the company's revenues. MP3.com's Instant Listening Service and Beam-it program ultimately are aimed at allowing customers to access their music at any time on any device connected to the Internet, whether it be a handheld computer or a telephone, Mr. Robertson said.
The judge wrote that MP3.com infringed on the copyrights when it purchased tens of thousands of popular CDs and then copied the recordings onto its computer servers so it could replay them for its subscribers.
The judge rejected the company's argument that it did not violate copyright law because it required subscribers to prove they already own the CD version of the recordings by briefly inserting them into their computers.
Judge Rakoff said this practice was not the functional equivalent of storing its subscribers' CDs.
"In actuality, defendant is re-playing for the subscribers converted versions of the recordings it copied, without authorization, from plaintiffs' copyrighted CDs," he wrote.
He said MP3.com was simply repackaging the recordings to transmit them through a new medium, invading the right of the record companies to license their copyright sound recordings to others for reproduction.
The judge was not persuaded by MP3.com's argument that the record companies will benefit from having their music played over a new medium.
The U.S. Constitution and the Copyright Act give companies with copyrights the right "to curb the development of such a derivative market by refusing to license a copyrighted work or by doing so only on terms the copyright owner finds acceptable," he said.
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This is the argument that MSFT made in front of Judge Jackson, which he ignored/dismissed, in his opinion. |
