Hands off my iPOD - you can't stop the music

The Australian Federal Court and the US Supreme Court are currently confronted by cases that will determine the freedom allowed to owners of MP3 players.

The two cases could have major ramifi cations for consumers who download music and the music industry as judges review the largely unregulated arena of MP3 file usage.

This is a digital dog fight over two continents, with the music industry manoeuvring to secure artists’ rights and consumer groups arguing that this should be a cost-free technology.

At the heart of this issue is the problem that we have moved from gramophone to vinyl to CD to a medium where recording companies have little control. A music download is little more than a sophisticated electrical pulse and is much harder to regulate than a physical album or single.

In Australia, record companies are suing a music peer-to-peer network Kazaa, for authorising copyright infringement, in a case before Justice Murray Wilcox in the Federal Court.

The United States Supreme Court is considering whether the peer-to-peer network, Grokster, is liable for vicarious and contributory copyright infringement by users of the network. Protestors outside the court carried placards warning, “Hands off my iPod”.

The two cases will have wider implications for technologies, such as the Apple iPod and the Windows Media Player, which could be used to play unauthorised MP3 files.

These two cases will have great signifi cance with regard to the way courts deal with copyright infringement issues in future — and have the potential to greatly impact on consumers.

In Australia, the defence of fair dealing does not extend to allowing consumers to copy media files for personal use. The Attorney-General Philip Ruddock has announced an inquiry into whether copyright law should adopt a wider defence of fair use in the wake of the adoption of the Australia-United States Free Trade Agreement. His Department has released an issues paper on the subject, canvassing a range of policy options.

The Australian stakeholders are already jockeying for position in this important policy debate. Copyright owners argue that the defence of fair dealing should be maintained. They argue that all users of iPods and other MP3 players should at least be required to pay a levy or a statutory licence.

Others believe that users should pay a per-download fee, but no tax should be imposed on the use of technology. Some consumer groups argue that the defence of fair dealing should be extended to allow Australian consumers to change the format of a copyright work. Others go further still, and maintain that Australia should adopt an open-ended defence of fair use, as in the US.

In the US, the courts have recognised that the broad defence of fair use allows consumers to record and ‘time-shift’ television programs for personal use, and ‘space-shift’ their record collection to MP3 files. There has been much debate as to whether this defence extends to the activities of peer-to-peer networks.

In the Federal Court of the US, Justice Thomas held that the peer network Grokster had substantial non-infringing uses - such as promoting new music.

His Honour cited the case of the band Wilco, who lost a record contract, then released a new album on a music download website for free. The songs were very popular and on the basis of that, they then secured a new recording contract.

Justice Thomas observed that the courts were an inappropriate forum to resolve such clashes over market forces and technological change: “We live in a quicksilver technological environment with courts ill-suited to fix the flow of internet innovation.

The introduction of new technology is always disruptive to old markets, and particularly to those copyright owners whose works are sold through well established distribution mechanisms. Yet, history has shown that time and market forces often provide equilibrium in balancing interests, whether the new technology be a player piano, a copier, a tape recorder, a video recorder, a personal computer, a karaoke machine, or an MP3 player.”

Copyright owners appealed against this decision, claiming that Grokster was a pirate bazaar.

The Supreme Court of the United States has already heard argument on the matter. Justice Breyer observed that devices like the Xerox copy machine, VCR and iPod could have a “vast number of infringing uses,” and wondered how inventors could develop new products without being sued. Justice Scalia asked how much time an inventor should be given to increase the number of lawful uses. Justice Souter has said he is very interested in iPods and during proceedings has commented “I know that if I am going to get music without paying for it I will.”

The Supreme Court has reserved its decision. It remains to be seen whether the Australian Federal Court and the Supreme Court of the United States will seek to regulate the “quicksilver technological environment” of the Internet, or will leave such matters to the wisdom of elected Parliaments.

Dr Matthew Rimmer is a senior lecturer in the Australian Centre for Intellectual Property in Agriculture at the Faculty of Law, The Australian National University.