In the summer of 1999 a company was formed that forever changed the internet. Napster, as it came to be known, was created as a P2P (person-to-person) file sharing program. The idea behind the company was that one person could upload a file, of any kind, to the Napster server and others could take that document free of charge. As Napster put it, it was allowing its users to share files with friends. The problem behind this idea lies within the legalities of ownership. With Napster, only one person would need to purchase a file and after uploading it, everyone could take the file for free. The legalities arose when music became the common file to share. Musicians and record label companies who owned the rights to the music brought Napster to court believing the sharing of their music was copyright infringement. The idea and case of “file sharing” over the internet had never been dealt with prior to and so the courts had to make decisions based on what they believed the law inferred. The real questions of topic were, was there a crime being committed and if so, what were the laws being broken?
Napster was a short lived company due to the major lawsuits filed against it. In December of 1999, Napster received its first legal battle. A&M Records, and several other companies, filed a lawsuits against Napster stating that Napster was allowing and supporting the use of copyrighted infringement material to be accessed for public use. This case is known as A&M RECORDS, Inc. v. NAPSTER, INC., 239 F.3d 1004 (9th Cir. 2001). To be proven guilty of copyright infringement, the court had to prove two things: 1) the record companies must show ownership of the allegedly infringed material and 2) the record companies must demonstrate that the alleged infringers violate at least one exclusive right granted to copyright holders. To state the basics, a item is copyrighted when an individual or group wants to protect something that is their original work and only they have exclusive rights to it. More specifically to this case, once an item is copyrighted, it allows the owner to decide how and who shall use the item for beneficiary gain. Copyright infringement is the act of using one's copyrighted item for their own beneficiary gain without the owner of the items consent.
Prior to Napster ever existing, a forerunner on the case of copyright infringement was brought upon the United States Senate in 1992. Known as the Audio Home Recording Act, it answers the question as to whether or not the reproducing of audio items is legal. According to this act, persons are allowed to reproduce audio items if the reproductions are not to be sold for profit, meaning it is to use as a source of backing up materials for personal usage. The significance of this act was that it was the first mandate of copyright law involving technology. Ten years later, this act helped decide the decision on Napster by defining such terms as a “digital audio recording device” and “digital audio recording media.” Also, this act helped to impose royalties owed to owners through the government. Another act that helped define the outcome of the Napster case was the Digital Millennium Copyright Act. Signed into affect in 1998, this act achieved several things; imposes rules prohibiting the circumvention of technological protection measures, sets limitations on copyright infringement liability for online service providers (OSPs), expands an existing exemption for making copies of computer programs, provides a significant updating of the rules and procedures regarding archival preservation, mandates a study of distance education activities in networked environments, and mandates a study of the effects of anti-circumvention protection rules on the "first sale" doctrine[1].
In the case of A&M RECORDS, Inc. v. NAPSTER, INC., the district court ruled in favor of A&M Records stating that Napster was secondarily liable for direct copyright