Copyright Crisis

Friday, June 23rd 2000, 12:00 am
By: News On 6

First it was music. Now just about any intellectual property can be traded online. And many Americans don't think that's a problem.

The Napster Internet music-sharing program may have the recording industry in a tizzy, but similar software is threatening to overwhelm copyright laws guarding all sorts of commercial products. Loosely grouped as "distributed file-sharing," about a dozen Napster-type programs have recently sprung to life. All work off the same basic model - opening up millions of Net-connected hard drives for worldwide searches and user-to-user downloads.

But while Napster limits itself to MP3 files that users convert from their CD collections, this new breed is promiscuous. Windows operating systems, expensive graphics design software, pornography, first-run movies - everything is up for grabs. "These file-sharing services have not been around long enough yet to say that they're the end of Western civilization," says Bob Kruger, vice president of enforcement for the Business Software Alliance. "Looking forward, though, I think we have every reason to be very concerned." While Napster is bogged down with legal challenges from music trade groups as well as heavy metal's Metallica and rap master Dr. Dre, its clones are marching into new territory. This new breed of software can be used just like Napster to serve up and pull down legally and illegally copied music. But their developers attempt to skirt some of Napster's problems by claiming their programs aren't designed specifically to exchange music. Some - such as Ian Clarke, a 23-year-old Irish programmer who created Freenet
( - have created their products with heavy emphasis on anonymity and encryption in an effort to make tracing user activity virtually impossible.

For them, the concerns of law enforcement agencies and entertainment companies ring hollow. Radio, mimeograph machines, photocopiers, magnetic tape and VCRs, they say, were all greeted with the same handwringing. "Freenet doesn't do anything different from what can already be done with those technologies, it just does it more efficiently," says Mr. Clarke. "Artists and publishers all adapted to those new technologies and learned how to use them and profit from them. "They will adapt to Freenet as well." What started the file-sharing avalanche is Napster ( which sprang from the shaven head of a 19-year-old music lover.

Shawn Fanning, nicknamed Napster as a kid, created it while in college. He dropped out of school to work full time on Napster after its popularity soared across campuses.

As Mr. Kruger points out, the majority of those adopting Napster and its clones are just like Mr. Fanning - college-age males. "I think one reason it's that way right now is because college students have free broadband access through a university and they're not being carefully monitored at all by the college systems," Mr. Kruger says. "And what are these students more likely to want? Word processing software or Britney Spears?" So, right now, Mr. Kruger says, MP3 trading is the primary problem. But that doesn't mean it won't spread to software and other intellectual property soon. "I don't want to say we're not threatened by this, but at least today it's not on our doorstep as with the others," Mr. Kruger says.

Still, Mr. Kruger's group points to a survey that found piracy of software exceeded $12 billion worldwide in 1999 and topped $59 billion during the past five years, with illegal workplace distribution of software leading the way.

In that survey, commissioned by the Business Software Alliance and the Software and Information Industry Association, 43 percent of 604 randomly selected employed adults said using pirated software for personal use is an "acceptable practice." The software piracy estimates indicate that more than one in every three business software applications in use during 1999 was pirated. Those losses for the United States and Canada lead every other region of the world at $3.6 billion, or 26 percent of the total.

Trade groups predict that today's new file-swapping programs could worsen the problem by simplifying the process. Less than a million downloads of such software had been made 12 months ago. Today, some industry experts say, more than 10 million people worldwide are playing with Napster or its relatives.

Apparently, Napster and its clones are quickly spreading beyond campuses. A survey released last weekby the Pew Internet and American Life Project, a nonprofit research center, found that the majority of those illegally downloading music today are not college students. The phone survey of 2,503 Americans taken in April showed that 48 percent are between ages 18 to 29, 42 percent are 30 to 49 and the remaining 10 percent are over 50.

How they work

The basic capability to trade files over the Internet has always been problematic for intellectual property. Illicit activity in pornography, entertainment and illegally obtained software has added to growing calls for better tracking of Net activity.

On obscure Web sites and in the arcane world of Inter-net Relay Chat, copies of expensive games and other software are routinely swapped. Within mainstream programs such as America Online's Instant Messenger, file swapping has been a wildly popular feature with users.

What Napster did was make the trading of MP3 files easy even for the most technically challenged. When users fire up Napster and similar programs, they add their own selected hard disk areas to a public database. Once they've shared their files, users can quickly search through everybody else's using keywords. Users then simply click on what they want downloaded to their hard disks.

Napster is being sued as a contributor to rampant copyright infringements. Companies using monitoring software have been able to track trading of their copyrighted songs because Napster uses a centralized server to store the directory of available music. At any one time, more than a million MP3 files are available through Napster, making it a huge target for legal action. "The record company isn't going to all the individual homes to seek damages," says Kelly Kordzik, an intellectual property attorney with Winstead Sechrest & Minick in Austin, Texas. "What they're going to do is look for someone with deeper pockets to sue." Some Napster clones - programs such as Gnutella and Freenet - make things even more slippery for monitoring by avoiding the centralized database of files. When a search is initiated with those programs, each connected home computer answers the search request individually. When a match is made, the two computers link directly over the Internet to make the transfer.

It works like electronic gossip. One computer asks 10 computers for, say, a file; if it's not found, those 10 each ask 10 more. The process either finds the requested file or gives up trying after all the networked computers are queried.

The file-swapping network, then, cannot be shut down by attacking one company or Web site. Every computer on the network would have to be unplugged to shut it down. Laws will have a hard time addressing such Nap-ster clones because no central authority exists, legal experts say.

Marc Andreessen, co-founder of Netscape Communications and a former chief technology officer for AOL, compares Gnutella to a benevolent virus, calling it a "revolutionary" program that spreads the power of publishing from an elite set of corporations to anyone who has a computer. "It changes the Internet in a way that it hasn't changed since the browser," Mr. Andreessen recently told The Associated Press.

For those charged with protecting copyrights, however, the clones seem destined to create major headaches. "These people are a real threat that no matter what regulation, no matter what law is passed, it seems they will always be able to come up with some technical work-around," says Mr. Kordzik.

Mass file-sharing

The Audio Home Recording Act of 1992 allows for the use of digital audio recording devices for personal, noncommercial recording of copyrighted music without liability. These sorts of rules have come to govern software and other digital products. "Convenience copies," once feared by the industry, are now routinely accepted by those marketing music CDs, software and games. "Gosh, in the old days, we all copied," says Mr. Kordzik. "I'd get albums from my friends and made a greatest Led Zeppelin hits tape for myself. I should have paid for that. But it was just a cost of doing business that the record companies accepted." The new breed of file-sharing programs makes a single act of sharing a worldwide event. "In old days, it was something you did with a friend; the copying was very limited," Mr. Kordzik says. "In this case, the copying can be absolutely, positively unlimited.

If a whole group or the whole world wanted to boycott a singer, they could hypothetically just spread that artist's music out all over the place for free and why would anyone buy it?

"That's powerful stuff."

Young, tech-savvy Americans growing up with computers and the Internet are showing few qualms about downloading pirated entertainment media or software. One poll taken by the Business Software Alliance recently showed that Americans believe speeding or lying to be worse offenses. Greenfield Online's latest Pulsefiner On-Campus Market Survey found that 75 percent of college students say they have downloaded digital music from the Internet. Nearly 90 percent indicated that creating homemade CDs is "in" on campus. Another Greenfield Online study revealed that 27 percent of 600 respondents ages 18 to 24 download music at least once a week.

On discussions across the Internet, the predominant opinion seems to be that free exchanges of MP3s should be permitted. In fact, when Metallica filed its Napster lawsuit, dozens of critical Web sites sprang up and thousands of its fans joined e-mail campaigns condemning their favorite group.

Meanwhile, various surveys have shown Internet downloads have either crippled or rejuvenated CD sales.

When it comes to Gnutella and similar programs such as CuteMX and iMesh, users often make free speech arguments about the need for private, anonymous, untraceable Internet activities. "We're sharing all kinds of files with Gnutella - books we've written, software we designed, MP3s, videos - things that can't be shared directly over the World Wide Web," says Shane Wallace, 20. "In the cases where stuff has been censored by governments or laws, there's no other way to get your stuff distributed. "It's our right." Concurring to a point are officials with the Electronic Frontier Foundation ( a civil liberties organization working to protect online rights.

Instead of taking action against Web sites and software makers, they say, punishment should be directed at those using the products illegally. Don't punish the technology, they say; punish the offenders. But the foundation also contends users of file-sharing programs should be entitled to anonymity on the Web for all activities.

But when the software encrypts its activities and there is no one in control of the file-exchanging network, how can the rights of users be balanced against those who produce copyrighted work? "Some people seem to think all software should be free," says Mr. Kordzik. "But they don't appreciate the fact that intellectual property laws do cause creation. They do engender creation of new ideas. The fact that there are software patents helps create markets they're using. We've got to be able to protect intellectual property to encourage people to create more."


As faster Internet connections spread, copyright holders fear illicit activity will rev up to warp speed.

The development of the Napster clones is speeding along, fueled by the promise that they are the basis for faster, more complete and targeted Web search engines. Already, some of Gnutella's programmers are showing off Infrasearch ( a file-sharing search engine that links thousands of computers.
As the Net continues its phenomenal growth, search sites may need such tools to suppleme
nt existing mechanisms, although there are still significant problems to overcome. One of the biggest is that searches slow dramatically as more computers are added to these ad hoc networks. And some virus writers have already begun designing ways to commandeer home computers that exchange files using these programs. Developers, mindful that their products are being scrutinized as potential copyright menaces, are scurrying to find legitimate niches.

Brian Christal, director of marketing at GlobalScape, software maker of CuteMX, says that adding searches for file-exchange programming to search engines just makes sense. "The search engines today aren't hitting all the pages out there right now," he says. "They only index about 20 percent. This technology stands to bring a whole lot more information to Internet users." Other developers are hard at work on products such as MediaEnforcer ( to help catch illegal exchanges of music and software on Napster and its clones. On the corporate front, some entertainment companies are pushing for governmental regulation.

"We need to create a standard that balances one's right to privacy with the need to restrict anonymity, which shelters illegal activity. ... [Otherwise, we] countenance anarchy," Edgar Bronfman Jr., head of the Seagram Co., said in May. "In the appropriation of intellectual property,, Napster and Gnutella [are] the ringleaders, the exemplars of theft, of piracy, of the illegal and willful appropriation of someone else's property." At the same time, companies such as Seagram, owner of the Universal Music Group and Universal Pictures, are working aggressively to take advantage of digital distribution. Seagram recently announced a deal with Sony to develop an online subscription service for music. Another company, EverAd ( has worked to package music with advertising, allowing free, unlimited exchanges of digital recordings as long as an ad stays attached.

For software manufacturers, file-sharing programs will add to the problem that has plagued the industry for years, forcing it to adopt software locking codes, encryption and other methods of control. "In some respects," says Mr. Kruger of the Business Software Alliance, "I find myself saying to recording and movie picture industry folks, 'Welcome to our problem.' "

Filing through file-sharing software

CuteMX ( Offers software for searching and downloading any type of file on a network.

FileFury ( Allows users to share files in an Internet Explorer-type interface. Users can choose sharing properties for the directories on their computers; once shared, a directory can be searched by any other connected member.

Freenet ( A peer-to-peer, decentralized network designed to allow the distribution of information without censorship.

Gnutella ( An open-source search and download system for media and archive files.

Hotline ( A simple software that enables live communication through any personal computer. Users gather in the Hotline Network, chatting, sending messages, holding news discussions and transferring files. ( This file-sharing Web site and software offers advanced features such as simultaneous download, which means that if the same file is found at two locations, the download will be performed from both locations at the same time, making sure you get the file faster.

Jungle Monkey ( A file-sharing program in which users can either join particular channels to download files or create their own channels.

Napster ( Allows members to search and share MP3 files.

OpenNap ( Extends the Napster protocol to allow sharing of any media type; it also links servers together.

Spinfrenzy Xchange ( Music-oriented site that offers MP3 files available from others' collections. It allows users to start their own free Web pages of favorites.

Wrapster v1.0 ( File-sharing software for Napster users that can be used to share content.

Staff writer Doug Bedell can be contacted by writing