Internet Piracy 2001

The downloading of movies and other copyrighted material via the Internet has touched off a controversy between proponents of free downloads, Hollywood representatives and legal officials.

With Napster heading off to court to fight lawsuits brought against it by members of the music community, lawyers and entertainment industry analysts are scrambling to figure out how–and what–to enforce regarding the downloading of copyrighted materials from the Web.

Napster officials say it is just a technological company, not responsible for what its members do–or trade–via the site.

And that's what the controversy is–who's at fault, if anyone. Legal officials are hesitant to comment because the legal issues and rulings are being determined and changed nearly every day.

Now, it's not just music fighting this 21st century battle. Last month, it was reported in USA Today that Gladiator–in theaters just a few weeks–was found on various Internet sites and chat rooms, available for free downloading onto personal computers.

Those in Hollywood consider piracy a problem for video because each pirated copy of Gladiator downloaded for free is one less copy that might be sold.

Although the MPAA doesn't have any hard, numerical facts about exactly what Internet piracy could cost Hollywood and the video industry, it's still a large threat looming on the horizon.

"We would consider the potential loss to be large," says Ken Jacobsen, senior v.p. and director world-wide anti-piracy operations for the MPAA."We are concerned that theft of our product through the Internet will deprive all of those in our industries through lost ticket sales, lost sales of DVDs, lost video rentals."

In the June 14 edition of The Wall Street Journal, Napster officials said file sharing of music–a copyrighted work, just like movies–over the Internet is perfectly legal.

Napster's Hank Barry, c.e.o. of the San Mateo, Calif., company, argued that music listeners "are confused about their rights." He also told Reuters News Service he questions if one-to-one, non-comercial file sharing is really an infringement of copyright law.

"The music industry would disagree," says John Schwarz, c.e.o. of digital rights management company Reciprocal Inc. "The law would disagree."

"You are violating copyright laws by downloading a copy of [a movie]," says Brad Bohrer, attorney for the San Diego-based law firm of Blanchard, Krasner & French, which deals heavily in Internet-related copyright issues.

"It's just like walking into a movie theater and snatching a [physical] copy of it."

Some, such as singers Courtney Love, Neil Young, Chuck D. and others quoted in a June 5 issue of Newsweek, feel Internet trading sites don't pose threats, so long as the copyright owners get paid.

"I'm down for a parallel business even if it's parasitic," Chuck D. from Public Enemy told Newsweek. "Napster is the new radio. It's the most exciting thing since rap, disco and the Beatles."

"We're very concerned that a segment of our society is beginning to live with an understanding that evertying on the Internet is free," says Jacobsen.

Although Web sites that act as a middleman between traders–like Napster–have received the bulk of the publicity lately, sites and chat rooms are equal threats to copyright infringement, claim Hollywood officials and attorneys alike.

"The rules do not deal with the methods of distribution, only with the content," Schwarz says. "The person who provides you with that content is breaking the law."

Mark Litvack, the Motion Picture Association of America's v.p. and director of legal affairs for world-wide anti-piracy, says there's no question Web traders are breaking the law.

"When our members' motion pictures are traded on the Internet [without authorization], that's a violation of the law," he says. "The illegal use of the Internet is an ongoing threat to the movie industry. It is a threat to each aspect of the business: theatrical, home video, TV."

Bohrer also says downloading movies from the Web–either through file-sharing sites or via a chat room–is an infringement of the Copyright Act because those who are downloading movies from the Web aren't using copyrighted material in accordance with the law.

According to the law, it is legal to use copyrighted materials for the sharing of ideas, teaching, research, reporting, etc. in the promotion of ideas. But to use said copyrighted materials for other purposes–such as to make a profit–that's an infringment, say lawyers.

"You're [downloading movies] so you can get them and not pay for them," says Bohrer.

It's not a violation of the law to make copies of anything copyrighted for your own personal use. But when you make copies to give to others–or to sell–that's an infringement.

"Copying a disc to send to your friends is not OK," Schwarz says.

By 2002, Hollywood will be experiencing the same anti-piracy battles as the music industry is today, he adds.

"It's going to dramatically effect movie sales and the video market," Bohrer says.

Earlier in June, Walt Disney Co. chief Michael Eisner spoke to members of the Congressional Internet Congress, urging them to consider laws making Internet service providers install technology preventing copyrighted downloads.

"Theft is theft, whether it is enabled by a handgun or a computer keyboard," he told the lawmakers as reported in The Los Angeles Times.

"I would hope the laws as they exist now will be utilized to stop illegal piracy," Litvack says.

Already, some studios are taking steps to protect themselves from digital pirates. New Line Cinema created a first-of-its-kind download to promote its new Adam Sandler Movie, Little Nicky. The one-minute trailer utilizes digital rights management security and services and is completely protected, say studio officials.