NAPSTER CASE STUDY

Q. Based on the facts in the Napster case, who do you think should have control over intellectual
property; the artists or distributors of their works? How did the legal system answer this question?

A. The control over the intellectual property (IP) can be vested with either the artists or the
channels that distribute their work, provided both get compensated for the job done by them. Here,
Napster is the distribution network in question. Napster let users download music for free, which is a
straight violation of copyright laws, where the artists or the music companies were not given the
credit their IP. The courts took the right decision by ordering Napster to shut down its service, so
that there wasn’t any further loss of revenue to the music companies or the artists, who were the
owners of the IP.

Q. Can Napster’s existence be defended on the basis of the idea that other online music services will
take its place if it is forced to shut down?

Napster was the one who paved the way for the online music distribution model using the MP3s.
The popularity of Napster among the people who used it did give rise to a lot of peer to peer (P2P)
websites and torrents, many of which continue to function even today.
But the popularity of these services cannot take away the fact that the principle behind such services
is wrong, as the due credit does not reach the IP owners. Hence, we cannot defend the existence of
Napster using the other services which come after it, who work on the same principle.

Q. While there are many legal issues in this case, identify the characteristics of Napster’s service that
made it so successful. What can other dotcoms learn from Napster’s success?

Napster was the first of its kind P2P file sharing service, and thus had a huge database within months
of its operation. In a little more than a year, it has managed to get almost 15 million users.
Although Napster violated the copyright laws, it did provide a head start to bands like “Radiohead”
and “Dispatch”, which were unknown till their work, was downloaded in huge nos. via Napster. This
is a direct outcome of the huge following that Napster had, which in turn gave Napster the power to
promote new talent.