Case 545 U.S. 913 (2005)

This is a United States Supreme Court decision in which the Court unanimously held that the defendants, Grokster and Streamcast (P2P file sharing companies), could be sued for inducing copyright infringement via their marketing revenue from their respective file sharing software. The plaintiffs consisted over two dozen of the largest entertainment companies (led by Metro-Goldwyn-Mayer studios). The case is arguably one of the most important copyright infringement cases in the past 20 years. Justice Souter's decision is of particular importance : "We hold that one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties."

While the Court unanimously concurred that Grokster could be liable for inducing copyright infringement, there was considerable disagreement over whether the case is substantially different from the Sony Betamax case, and whether the precedent established by Sony should be modified. The majority of the Justices would have either expanded or contracted the Sony Betamax doctrine, however the Court as a whole did not chose to reexamine the Betamax precedent in the decision, given they were split into three equal-sized groups. Instead, a new, and perhaps more ambiguous, test has been developed to determine whether the software in question is not protected by the Sony ruling. In short, the distributors of the programs advertised and/or otherwise induced its use for copyright infringement. MGM et al. asserted that the defendants' refusal to incorporate a mechanism to filter copyrighted materials from the file-sharing network constitutes an intent to promote copyright infringement. However, Justice Souter notes that "...liability merely based on a failure to take affirmative steps to prevent infringement, if the device otherwise was capable of substantial noninfringing uses" would not be considered contributory infringement.

This case is important, because it illustrates the judicial precedence in regards to P2P as well as the extent to which large corporations disagree with the very essence of peer-to-peer sharing. It will be important to my paper because it is highly referenced in the literature and other sources.

International University in Germany 2004

In this paper Peitz and Waelbroeck run a type of global analysis (cross-country) and conclude that RIAA may be correct in its assertion that music downloads are causing a substantial decrease in music sales. Their data suggest that music downloading could have led to a 20% reduction in music sales worldwide between 1998-2002. They note that their estimate is a fairly crude estimate, but that it may be useful assessing the "exact substitution" that has taken place between CDs and MP3s. They admit, however that their analysis also reveals that other factors besides file-sharing network download are likely to be responsible for the decline in music sales in 2003.

These results seem unreliable. The study was done in  relatively short time period with very limited set of independent variables. Additionally, some question the validity of cross-country analyses in general because controlling for "unobserved heterogeneity" can be quite difficult, as other sources have noted. In addition, the authors themselves admitted to not having data on "MP3 downloads, Broadband, DMP and DVD variables for the years prior to 2002". In place of actual data they used variables in the regressions, assuming that the levels were "a good proxy" for first differences in that period for most countries, and that music downloading on file-sharing networks essentially started in 1999". This is an odd assumption, especially given that they sampled from 1998-2002.

This is an article that I will hold up as a mal-proven argument for the music industry's claim, in order to contrast with my other sources. One source actually mentions some of the flaws of this paper, pointing out that several of the regressions, including the most complete one (i.e. the one with all explanatory variables included) downloads are not even statistically significant.This paper will also allow me to expound upon some of the methodological difficulties surrounding this type of research.

University of Chicago Law Review, 2002

This law review article is sobering after pouring through mounds of articles quibbling over the how much money the giant music corporations may or may not be losing to P2P sharing. In the article, Ku reminds us of the original purposes of copyright: a tool for censorship and monopoly for the writers' guilds in response to the invention of the printing press. More modern copyright was intended to promote the progress of science and useful arts. As Ithiel de Sola Pool said, "the danger is not of an electronic nightmare,but of human error. It is not computers but policy that threatens freedom." Ku suggests we that enter the digital copyright debate mindful of the new and current, not focused on the traditions of the past.

Copyright developed as a response to the economics of Gutenberg's printing press, under which works of literature, music, and multimedia are delivered in the form of books, CDs, and videos. In the absence of legal protections against copying, this method for distribution was particularly susceptible to free riding by subsequent copiers. Today however, technology lets us to distribute and redistribute those same works as ".docs," ".mp3s," and ".mpgs" at virtually no cost. The economics of the industrial revolution are no longer needed, and with the connectivity of the Internet and technologies of the information revolution all but eliminate free-riding, in that there are no distribution costs to speak of, the public as a whole internalizes them, according to the author.

Ku believes that the new economics of digital technology should be encouraging in the creation and dissemination of human expression, not hindering. The author furthers his egalitarian stance by noting that it is not unreasonable to reach for a world in which no one is excluded from creations of the mind because they are unable or unwilling to pay. Furthermore, the same system can allow for, and stimulate, growth of a diverse group of artists, all connected directly to the public. Ku questions whether preserving copyright in cyberspace could even be considered constitutional if the underlying justifications of copyright no longer exist. Ku realizes his views are fairly radical, but remarks that just as Gutenberg's printing press threatened the dominance of scribes, so too do peer-to-peer networking and MP3s threaten the recording industry, and we must keep in mind "that the digital world will be what we want it to be... will we program it for the benefit of the few or for the good of all?"

Despite the fact that Ku is an obvious ideologue, his article brings new perspective to the discourse. It is important to maintain a certain sense of reality in trying to answer this question; it's important to stop and ponder for a moment whether in theory, however difficult in practice, Ku is correct in his assertion that reconfirming copyright in new internet technologies is not the most sensible of steps. I plan to use this article partly in the introduction of the topic and as a reality-check of the whole situation in my conclusion.

Electronic Frontier Fondation / Springer Berling, 2003

This is a paper written by by Fred von Lohmann a senior intellectual property attorney at the Electronic Frontier Foundation.Among other things, this article discusses “direct” infringement, typically at the hands of the individual who is sharing copyrighted files. As a "direct infringer" the individual has directly violated one or many of the copyright owner's exclusive rights. This is important because in the world of P2P, there is almost certainly some amount of infringing activity. The paper also covers contributory and vicarious infringement which will be less important to the particular topic at hand, but still relevant in painting a full, accurate picture. Lohmann notes that non-infringing uses of a P2P application are what allow it to be created. If a product is intended to work as a mechanism for copyright piracy, legal trouble is afoot. Almost all peer-to-peer systems can be used for many different purposes; the existence of real, substantial noninfringing uses increases the plausibility of invoking the “Betamax defense”.

Specifically the article notes that since every digital file is “fixed” for purposes of copyright law (whether on a hard drive, CD, or merely in RAM), the files being shared generally qualify as copyrighted works. The transmission of a file from one person to another results in a reproduction, a distribution, and possibly a public performance (e.g. transmitting a copyrighted work to the public)

I chose this paper because it is a good source of general information that will help me develop an introduction with some background about what peer-to-peer file sharing is and what its association copyright implications are. It is also a useful supplement to the actual court case, because it explains not only copyright law, but also how it is applied specifically to peer-to-peer file sharing.

 Journal of Political Economy, 2007 - UChicago Press

This paper further investigates Oberholzer and Strumpf's previous attempt to take account of recent literature and endeavours to obtain more robust results through more a fine-tuned methodology. Oberholzer and Strumpf, use data on downloads provided from a P2P system combined with sales data extracted from the "Billboard" music chart to look at the impact of file-sharing. They suggest that file sharing has no statistically significant effect on purchases of the average album in their sample. The data gives estimates of a modest size when compared to the drastic reduction in sales in the music industry.

At most, they project that file sharing can explain a tiny fraction of this decline. This result is plausible given that movies, software, and video games are actively downloaded, and yet these industries have continued to grow since the advent of file sharing. The scope of the article is not large enough to explore the actual cause of the recent decline in record sales, but suggests: poor macroeconomic conditions, a reduction in the number of album releases, growing competition from other forms of entertainment such as video games and DVDs, a reduction in music variety, and possibly a consumer backlash against record industry tactics. Their method involves a panel data regression of albums sales over time against estimates of downloading (noting that the simple correlation between downloading and sales yields biased estimates). Overall the impact on sales, even in the most pessimistic model, is minimal: "Focusing on the most negative point estimate, the annual industry sales loss due to file sharing is 3 million copies. This is virtually rounding error given that sales in 2002 were 803 million CD albums (RIAA, 2004)."

This paper will be useful because it is perhaps the most convincing study among my sources to argue that the effect of file sharing on record sales is not statistically significant. It is strengthen by the fact that this is a reiteration of the author's previous study, and yielded a similar, but more robust set of data.

 

This book is an objective look at the various implications of digital sampling and copyright infringement in the music industry.  It offers numerous examples of instances in the production of music that range from simply “causing a stir” to reaching a major court decision – and it provides the results of each.  It has been written and edited by a collection of scholars, specializing in a number of fields and commenting from a variety of backgrounds and points of view. 

            The book does not necessarily pose an argument as much as it clarifies the dispute between the recording industry and the digital sampling community.  It pits the copyright laws against the “creativity” of new musicians.  The book takes neither stance but rather gives adequate attention to both.  On one hand, it states that copyright is often blamed for curtailing creativity in music, in that it prevents the production of completely new songs simply because of their use of a small sample of a previous work.  Conversely, the authors acknowledge that copyright is also seen as a catalyst for creativity, offering incentive to create fully original work instead of somehow deriving it from a pre-existing source. 

            This dichotomy is essential to my argument seeing as it offers equal views and examples on the subject of digital sampling.  The cases identified in the text are sound evidence of the evolution of the copyright law as a result of the development of the digital sampling technologies and practices.  As a result of these case studies, the book also calls to mind a number of musical examples that can not only be analyzed further, but can also be used to find other examples or to gain further insight into the specific case in question. All of these items are discussed in a case-by-case basis with commentary following and this formal structure provides an easy reference into any single instance of copyright infringement that results from the practice of digital sampling.  This source will prove invaluable in the completion of the final paper, seeing as it outlines all of the surrounding facts and intricacies of copyright law as it pertains to music.  In deciding whether or not a sampling is within the bound of copyright law, this book has been cited numerous times, and will be upon completion of the paper. 

 

This book is a guide – as its title might suggest – to all things digital when it comes to music.  It serves as not so much an analysis on copyright in the music industry as a whole, but rather as a set of legal and technical guidelines so that one may participate in the consumption and production of such music without infringing on copyrights.  In other words, it describes for the reader all of the ins-and-outs of the digital music industry so that one may know where in the law his practices may reside. 

            Hill’s book has entire chapters devoted to the assessment of what is legal, what is not, and how to go about participating in said sanctioned musical practices.  He identifies a list of acceptable file-sharing websites, and offers his own commentary on why others are forbidden, as well as why these are acceptable.  The book begins with a basic introduction into the technologies and methods used in the digital realm and then goes deeper to list available services and to comment on the merits of various practices.  His advice is clear and he condones no illegal activity, yet he makes clear why certain people might be motivated to circumvent copyright laws in terms of digital music.  He further lists specific file types and programs that are used in these practices and he identifies useful software.  He finishes the book with another broad chapter about the “Conscience of Digital Music” as a whole as well as his prediction of the future of the industry.

Hill’s technological knowledge is a key aspect of this book that has allowed me to delve deeply into the details of digital music production and sharing.  He explains these issues in simple terms, while still conveying the complexity of their implications.  In writing this final paper, the technological terms and details from this book will provide much-needed expertise in a field that I am not necessarily well-versed in.  In my analysis of the acceptability of digital sampling, I must first know how the practice works and what techniques are involved; this book offers me this knowledge, which is key to reaching a conclusion in my final paper on what sampling is acceptable within copyright law.

 Copyright Silliness on Campus

    This Washington Post article discusses the intensity of the RIAA in their fight against illegal downloading of music and movies. The article explains how the Record Industry Association of America is questioning 19 major American Universities regarding their actions against students who download. One of the major questions being asked is whether or not these universities are expelling students who practice peer-to-peer file sharing and illegally download. The RIAA claims that certain universities are not expelling enough students for these causes. It seems that even with the RIAA attempting to control universities, they continue to sue and threaten individual students. The monitoring techniques the RIAA wants universities to utilize are not only costly, by also ineffective. Students will be able to outsmart the monitoring system either through the internet or simply with blank CDs and hard drives. Music and movies can be shared even with the RIAA’s “copyright hall monitor”. This article recommends a blanket license that would allow students access to music and movies from whatever source they choose. This blanket license would be similar to that used by universities for a cappella groups that perform on campus and cable television subscriptions. The article concludes claiming that universities have more important things to worry about than the RIAA’s fight for money.

    This article supports my thesis. It provides a variety of reasons why the RIAA is losing control over their copyright battle. Not only is the RIAA threatening students, but it is also attempting to discipline major American universities who do not follow suit in acting against their own students. The author offers another option of blanket fees as opposed to suing every student and threatening universities. This way of handling the file-sharing phenomenon supports my own argument for promoting awareness as opposed to financially attacking students.

STANFORD INSTITUTE FOR ECONOMIC POLICY RESEARCH, 2004

This paper examines the changes in household-level spending on music in the United States, particularly in relation to emergence of Napster. By utilizing the information contained in the Consumer Expenditure Survey, three approaches are used to measure the effect of Napster. The "difference-in-difference kernel matching (DDM) method" which is intend to directly quantify the effect. Results found that the quarterly music expenditure of the average U.S. household decreased by about 3 dollars as a result of using the Internet, possibly Napster specifically. The paper asserts that this accounts for nearly 40 percent of the decline in total recording sales in 2000. The second approach estimates a demand system for entertainment goods. The estimated cross-price elasticities, (i.e., the responsiveness of the quantity demanded of a good to a change in the price of another good) imply that changes in prices of other entertainment goods could also explain the slump in recorded music sales. In 2000, approximately 37% of the decline in recording sales is due to such changes in prices. The final method involves constructing hypothetical groups to make predictions. The results indicate that transition to CDs from LPs could describe the increase in music sales during the 1990’s as well as the more recent slowdown in growth. The author asserts that these methods account for more than 80% of the sales decrease in 2000, which partially vindicates Napster. He therefore reasonably concludes given conservative estimates that Napster accounted for more than the remaining 20% of the decrease, and likely substantially less than that.

This article employes a fresh methodology of reverse calculation approach that adds diversity to the ways in which my source papers have approached the issue of the effect of peer-to-peer on the music industry. Instead of trying to survey people on their download habits, which assumes people respond honestly, or trying to calculate number of song downloads (estimates greatly vary), Hong examines areas where the data is reliable and the calculations are less obscure.

The purpose of this note is to address foreign countries that harbor counterfeiters that by association indirectly support the act of piracy. This piece of literature further argues that the primary effect of piracy on foreign economies would seem to be a substitution of sales and profits away from American subsidiaries to locally owned companies. With this movement of sales, this substitution contributes to a reduction in producers’ surplus and allows for a short run gain in profit for foreign economies. As such, this reduction in the inflow of foreign investment will strengthen the perception of those foreign countries being susceptible to piracy, labelling them as less appealing markets. The second part of the article further distinguishes the differences between government protection and market protection. The macroeconomic effects of piracy that are discussed also relay the idea that domestic consumers benefit from lower "priced" imports that are acceptible substitutes for the "original" goods. With this idea in mind, the author argues that the U.S. has a strong influence on global productivity because of its economy’s incredible efficiency. Firmly holding this notion, the author believes that greater flexibility in distribution techniques can mitigate piracy problems. Though this article does not address peer-to-peer file sharing directly, it seems obvious that this issue would be heavily implicated in piracy and copyright infringement.

The future of file sharing seems bleak considering that the U.S. has decided to form alliances with other nations in order to rally support against broad-range piracy. This article in particular addresses the act more and strongly defines what constitutes an act of piracy and the damaging effects on various economies. I found this to be of use since it defined the umbrella term of piracy and how file sharing could be grouped within this category, since shared material appears to be the "lower" priced import. The notes following the read provide more legislative material to justify the claims of the author. Either way, this piece provides information about preliminary control over piracy issues and future implications that may result from actions taken by larger corporations and organizations.

         Media moghul Comcast plans to use protocol agnostic controls to manage online traffic. Comcast, a US cable provider, strives to appease global IPR parties by mediating broadband traffic via time-spaced analysis of internet usage.  As a result, the normally strengthened pipeline for information transfer is deemed as severely handicapped via this inevitable middleman. It thus comes as no surprise that “Comcast’s objective here is still largely to prioritize NON-peer-to-peer traffic above P2P sharing." Commentator Shaun Nichols writes that Comcast plans to use these deliberate traffic limits in order to prevent users from occupying large chunks of bandwidth with the use of P2P services. Comcast claims that online traffic will be analyzed every 15 minutes in order to rank users based on the amount of bandwidth each is occupying. Individuals who appear to be occupying large amounts of bandwidth will be placed at a lower priority for network access, inhibiting access to peer-to-peer applications. This compromise will be met with increased speed for web page viewing during peak access times, leaving non-peer-to-peer users at a general advantage as far as web surfing is concerned. Not to our surprise, the Electronic Frontier Foundation (EFF) found this to be an improvement over the ACTA’s (Anti-Counterfeiting Trade Agreement) initial stringent regulatory stance on file sharing.
         The structure of my argument hinders upon the past and future implications of file sharing legislation. Considering that the middle man (in this case the service provider) is of central importance to the movement of information across the web, it makes for a nice standstill between the normally warring EFF and ACTA. However, the ACTA’s ability to recruit more providers across the country could force users to look elsewhere for alternative means of accessing information. Though this article addresses the role of internet providers in information transfer, it largely ignores the general transfer of information via Bluetooth and other external devices that can also be used in file sharing.

In their paper, Does Peer-to-Peer Harm Copyright Owners: Protecting and Distributing Digital Products, Anne Duchene and Patrick Waelbroeck create an economic model of peer-to-peer content sharing versus traditional distribution with specific respect to online music sharing. Although the paper was written about music in 2003, it can be thought about with respect to film and television today.

            The model makes a few major assumptions to reach its conclusions. First, the original work provides more utility than the copy. This can easily be supported in today's terms that the original versions are of higher quality and can provide additional features such as DVD extras. The second assumption is that content producers will spend a large amount of money marketing and distributing under the traditional methods, but these costs will be 0 for peer-to-peer distribution. This assumption decidedly focuses on small independent produced content and ignores studio produced content. Along with this assumption is that there is a cost to downloading copies both in the opportunity cost of finding the copy and second in the copyright protection both technically and legally. This assumption does seem to hold true to real world issues.

            The findings of their model is that as copyright protection is increased, not only is consumer surplus decreased through decreased utility for copiers but also for buyers in terms of higher prices passed on to implement the higher protection standards, but also that higher copyright protection favors the large studio productions that have the ability to overcome the capital thresholds for marketing and distributing through traditional media. This could easily apply to film and television new media as well. As the studios block access to files through DRM, they are increasing production costs and favoring themselves over low capital producers who cannot afford to implement these strategies.

This has interesting implications over the future of new media in terms of concentration versus fragmentation of the media industry. It appears that if left unfettered, the online channel allows for a fragmentation of content producers. This is evidenced by YouTube, Funny or Die, and other small yet popular independent online content producers. However, if the studios are able to enforce higher levels of copyright protection, for example winning the Viacom v YouTube case, this could further concentrate power in the studios. In this example, the higher costs of copyright protection would lower YouTube or other smaller sites abilities to operate profitably. If these sites that support user generated content are hampered, it will allow sites such as Hulu.com to dominate and favor studio produced content over user produced content.

 

The most recent Supreme Court ruling on this controversial issue was in the case of MGM v. Grokster.  Reversing the opinions of both the district court and the Third Circuit, the Supreme Court found that, though the software could be used for both infringing and non-infringing purposes, the companies “induced” its users to infringe copyright.  Even though the software may have had substantial non-infringing uses and may thus have passed the Sony test, the court unanimously felt that the software was created with the intention of allowing users to infringe copyright for the profit of the company .  While these file-sharing networks were shut down as a result of the ruling, the government did not seek prosecution of users, many of whom had shared less than $1000 dollars worth of copyrighted works and were thus not criminally liable under the current U.S. code.  And while the government may have had a shot at prosecuting the creators and marketers of the software itself, as their product had been found to induce copyright infringement, with damages likely totaling thousands of dollars, a federal case was never made of it.  Grokster was shut down, and numerous file-sharing networks popped up in its place, while legal digital distribution networks gained popularity as well, filling the gap left by the popular illegal networs.  The war on piracy continued despite this dramatic ruling, and the complaining on behalf of the record companies has yet to cease.

Though peer-to-peer file sharing has yet to be legislated, the courts have provided us with some guidance on how to deal with the new technology.  The most recent revision to copyright law dates back to December of 1997, a year and a half before the release of Napster, the first mass file-sharing network.  The No Electronic Theft Act (the NET Act) was designed to close a loophole in criminal law that prohibited prosecution of people who distributed copyrighted software over the Internet without making a profit.  The NET amendments included a new provision that made "reproduction or distribution, including by electronic means, during any 180-day period, of 1 or more copies or phonorecords of 1 or more copyrighted works, which have a total retail value of more than $1,000" a criminal offense, punishable under United States code by imprisonment of up to one year or fines.  Under this new law, reproduction and distribution of copyrighted material with total retail value under one thousand dollars remained a non-criminal offense unless the copyright was infringed for the purposes of commercial or financial gain. Importantly, this amended law does not allow for criminal prosecution of downloaders who do not distribute copyrighted works, but merely download them.  Obviously, without people distributing the works, there would be nothing for these non-sharers to download, and while it seems that cutting off the supply chain could effectively stop these people from downloading, this has yet to occur.  The closest parallels to a possession of unlicensed copyrighted material are laws prohibiting the possession of stolen goods (not intellectual property.)  However, Dowling shows us that property law cannot be used to prosecute offenders that copyright law does not apply to (e.g. transportation of “stolen” intellectual property over state lines).  This means that the targets of RIAA scare campaigns are actually often not committing a felony by downloading music, a fact that the RIAA is negligent to admit.

Though this book is biased against internet file sharing, it provides a good background on some of the issues that arise when dealing with the topic.  Hinduja provides a difference between file sharing and CD stealing that neither the detractors nor supporters of file sharing had thought to mention, perhaps because it is so obvious.  Theft of digital property over the Internet is much easier and quicker than physical theft.    He goes on to attempt to liken the two, claiming that the desire to innovate and develop creative works can be stifled if the rewards are less than anticipated, but there is a clear argument against this.  That is, most artists struggle for years making absolutely no money before “making it,” and even then there is no guarantee of survival.  These artists cannot anticipate that the returns will be high, because the likelihood of this to be the case is so low.  It is in fact, these artists who struggle for years for no money who benefit from file sharing, as it enables them to share their work and develop a fan base without the stifling influence of a giant record label.  Thus, for these artists, the same harmful peer-to-peer network that supposedly squelches the desire to innovate actually stimulates it.  It provides the possibility that their work will be heard, which would otherwise be unlikely.

Though the author is against file sharing, he admits that digital intellectual property is characterized as a public good.  Its utility is not decreased when the property is shared.  It is also an “information good,” with a marginal cost of production of about zero.  Though the author describes these factors as augmenting the attractiveness of the commodity, he informs the reader that because of the attractiveness, the music industry refused for years to embrace the format changes and introduce it into their business model.  This seems at first to make little to no sense, until we consider the historical resistance to change in this industry. 

Hinduja further describes the government’s general resistance to legislate on the matter of punishment for copyright infringement, suggesting that a reason for this is that most individuals lacked the capacity to violate the laws.  This is no longer true, and perhaps the government should step in and make their position on the matter known.  This potentially contradicts Lessig’s argument that the technology must develop before rules are made concerning its use. 

 

In Chapter 7 of Jack Goldsmith and Tim Wu’s book, entitled “The File sharing Movement,” the authors detail the “movement” from the creation of CDs to the Grokster decision.  They introduce the idea of the “Internet surplus,” the difference in music distribution prices before and after Internet file sharing became a possibility, and suggest that the file sharing battle is merely a battle over this.  The Grokster case, described in detail in this chapter, is an important element to study in determining the challenges the music industry faces and its first response to grand-scale piracy.  While the Electronic Frontier Foundation argued that copyright law had been flexible in the past in permitting the development of new technologies, and should continue to be so in the face of the Internet, the RIAA remained stubborn, firing additional litigation at its own customers, an act supported by management and some artists, but denounced by consumers and the EFF.

            This chapter also includes a quote from Frances W. Preston, president of BMI: “Illegal downloading is theft, pure and simple, we must end the destructive cycle now.”  This is reflective of the misguided attitudes that the recording industry took in response to the proliferation of file sharing. 

            The chapter finishes by describing the newer advancements in online distribution of music, suggesting that iTunes will be collecting some of the enviable Internet surplus created by the new easier distribution technologies.  The iTunes model is, for the time being, the most accessible to the consumer who wishes to use music both on the computer and on the go.  As more companies catch on and the music industry agrees to grant more online distribution licenses, this is likely to be the wave of the future, and the answer to the online piracy dilemma.

It is no secret that the biggest threat to today's music industry is peer to peer file-sharing, labeled piracy by its detractors. It is also indisputable that most of the activity on such networks is an infringement of the copyrights held, for the most part, by the record companies that seek to stop such sharing. The Recording Industry Association of America (RIAA) is at the forefront of the anti-piracy campaign. While campaign material threatens college students and other infringers with criminal convictions and hefty government fines, the reality is that most piracy litigation has been civil, not criminal. Moreover, according to copyright legislation, it is the distribution of the copyrighted material, not the possession of it, which is punishable by Federal Laws. File-sharing is not, as the record companies would lead us to believe, always and indiscriminately, stealing. While it would be difficult to argue that file-sharing is legal, it is worth noting that the RIAA itself has engaged in unethical and dishonest campaigning in its own effort to maintain its current business model in the face of inevitable change at the hands of the new technology. It may in fact be in the recording industry's best interest to embrace file-sharing, as recent studies have suggested that the new technology may provide a better predictor of record sales than other previously popular methods, including radio airplay. In order to make the most out of the innovations that the Internet and the proliferation of MP3 technology have provided, the recording industry should shift its focus away from stopping illegal file-sharing and towards providing and taking advantage of the benefits of a legal file distribution method.