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File Sharing FAQ

Are you at risk of being sued for file-sharing?


Introduction

Background

File-sharing, also known as peer to peer file-sharing or simply "p2p," has become extremely popular and controversial since the invention of Napster (the first file-sharing software program) in 1999. In September, 2003, the Recording Industry Association of America (RIAA) filed copyright infringement lawsuits against 261 individuals for illegal file-sharing of copyrighted sound recordings. The RIAA lawsuits have resulted in a great deal of media attention and public debate on the issue of file-sharing. Many people have questions about the legality of file-sharing. This FAQ is intended to provide some answers to common questions about copyright and file-sharing. It is hoped that the information provided will be useful to anyone who is interested in the controversy revolving around the file-sharing of copyrighted works.

Disclaimer

This FAQ is intended to provide general information about copyright law as it applies to online file-sharing. It is intended for informational and educational purposes only. Some aspects of copyright law are quite complex and consequently some of the information presented has been simplified. If you need specific advice based on your own particular circumstances, you should consult with a qualified attorney.

Questions

What is file-sharing?

File-sharing (more specifically, "peer-to-peer file-sharing" or "P2P") is in simple terms a way for people connected to the Internet to share files stored on their computers. File-sharing services such as Kazaa, Grokster, Morpheus, i-Mesh, etc. provide software which enables people to search for files on other people’s computers. File-sharing software can be downloaded for free on the Internet although some file-sharing services charge a fee for premium services (such as versions which block pop-up advertisements, etc.).  Users of file-sharing software can download files from other users' computers and make files stored on their computer available to other users to download.  Most people use these services to search for music and video files in order to download (copy) them to their own computers. The vast majority of files made available over file-sharing networks contain copyrighted music and movies.  Most of the copyright owners of the music and movies "shared" through file-sharing networks have not authorized their works to be made available in this manner. 

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What is copyright?

Copyright is actually a group of rights afforded by law to authors (and other owners) of many types of artistic and creative works such as songs, sound recordings, movies and other audiovisual works, literary works, visual artwork (paintings, sculpture, photographs), etc. The exclusive rights provided by copyright law are:

  • The right to reproduce the copyrighted work
  • The right to adapt (or prepare derivative works) based upon the copyrighted work
  • The right to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending
  • The right to perform the copyrighted work publicly
  • The right to display the copyrighted work publicly
  • The right to perform sound recordings publicly by means of a digital audio transmission

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What is copyright infringement?

In general, copyright infringement occurs when someone other than the copyright owner (or someone authorized by the copyright owner) exercises one or more of the copyright owner's exclusive rights. There are however, some exceptions to this general rule such as when a use of a copyrighted work is held to be a "fair use" of the copyrighted work (these limitations are found in sections 107-122 of the U.S. Copyright Act of 1976, but none are likely to apply in most situations involving file-sharing).

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Is file-sharing illegal?

Whether file-sharing is illegal or not depends on exactly what is being shared and under what circumstances. There are certainly legal uses for file-sharing software. For example, some musicians chose to make their music freely available on file-sharing networks to try to generate interest in their music. It is also legal to share works that are in the public domain.  However, it is generally illegal to use file-sharing software to trade copyrighted music or other copyrighted works (e.g., movies, software, photographs, etc.) without the copyright owner’s permission. In other words, it is the copyright owner (whether a relatively unknown independent artist or a record company which owns the copyright to a very well known artist’s recordings) who is legally entitled to decide whether to make their works freely available through file-sharing.  Many copyright owners chose not to do so since they do not receive any payment from file-sharing of their works and since people obtaining free copies may be less likely to purchase copies.

The vast majority of file-trading activity is illegal since most of the works being traded are popular copyrighted music which has not been authorized to be distributed through file-sharing. This violates the copyright owner’s right of reproduction under U.S. copyright law. Although some people still seem to believe that file-sharing of copyrighted works is not illegal, courts that has addressed this issue so far have generally indicated that it is.

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Is file-sharing ethical?

Some people believe that file-sharing of copyrighted works without authorization is just like stealing (i.e., like shoplifting a CD from a record store). Under this view, file-sharing deprives musicians, songwriters, record producers, and record companies of income derived from the music they create and invest in. On the other hand, file-sharing proponents assert many arguments that file-sharing is a good thing. However, most of the rationales given in support of file-sharing, do not constitute legal defenses to copyright infringement and some do not really make much sense ethically or logically. Some of the more common are:

  • "CDs cost too much and usually only contain 1 or 2 songs I really want." Even if you believe this, that doesn’t give you the right to illegally obtain the songs you want through file-sharing. Although not a perfect analogy, if I want a new car, but believe the model I want is overpriced, would I be entitled to steal it?  Stealing a car and infringing a copyright are not the exactly same, but both involve violating someone's ownership rights.
  • "File-sharing is a way to sample music in order to decide whether you want to buy it on a CD." However, it is the copyright owner’s decision as to whether, how, and to what extent a work can be sampled before purchase. Again using a car analogy, cars dealers will generally allow you to test drive a car before you decide whether or not to buy it. However, they don’t let that test drive last indefinitely or let you keep the car even if you decide not to buy it.
  • "No one is really hurt by file-sharing or if anyone is hurt, its just the huge entertainment corporations." Anyone who believes that no one is being hurt by illegal file-sharing is probably unaware of (or prefers to ignore) what has been happening in the music industry over the past several years. Record sales have declined by about 30% since the emergence of file-sharing.  Large companies such as the major record labels and movie studios have certainly been hurt by illegal file-sharing (which has resulted in layoffs of thousands of employees). While there are other factors that have also contributed to the decline in record sales, illegal file-sharing seems to be the most significant factor. In reality, it’s probably the little guy (e.g., independent artists and record labels, record producers and small music publishers, etc.) that are being harmed the most by illegal file-sharing since small businesses often struggle to make enough money to stay in business in the first place.

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Is it possible to legally obtain music using file-sharing software?

Yes. It is possible to legally obtain music through file-sharing since some copyright owners (primarily independent musicians) authorize the free distribution of their music through file-sharing services. However, it is very difficult to know whether a particular music file has been authorized or not. The vast majority of the music being traded by file-sharers has not been authorized to be distributed by file-sharing services and music by well known artists is almost certain not to be authorized. Finally, while some independent artists authorize file-sharing of their music, many others do not. The best approach from a legal standpoint is to assume that music is not authorized for file-sharing unless you somehow know otherwise (e.g., an independent artist, on their website or elsewhere, encourages fans to download their music using file-sharing services).  In addition, there have recently been some attempts to offer legal file-sharing services by companies such as iMesh, Mashboxx and Ruckus which recently introduced a free service for college students.  Record companies and many artists have generally agreed to make their music available through file-sharing services as long as they are compensated in some manner.  Some file-sharing companies are experimenting with advertising supported services (with part of the advertising revenue going to pay copyright owners) while others are offering paid monthly membership services.

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What is the RIAA?

The RIAA is the Recording Industry Association of America, a trade organization which represents the interests of record companies in the United States. Among other things, the RIAA seeks to protect its members legal rights (record companies typically own the copyrights in sound recordings made by artists they have under contract). In September, 2003, the RIAA initiated the first round of copyright infringement lawsuits on behalf of its members against individual file-sharers, suing 261 people. Other organizations representing copyright owners such as the International Federation of the Phonograph Industry (IFPI) and the Motion Picture Association of America (MPAA) have also sued file-sharers and file-sharing companies.

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Why is the RIAA suing file-sharers?

There are several reasons why the RIAA has chosen to file lawsuits against individuals who are illegally making copyrighted music files available through online file-sharing services. Sales of pre-recorded CDs have declined by about 30% over the past 5 years. The RIAA believes that file-sharing is the main reason for this dramatic decline in sales (a logical assumption considering that the sales decline began shortly after file-sharing started to become popular due to the original Napster file-sharing company). As a result of this sales decline, the music industry is in dire straights - the 5 major record companies have laid off thousands of employees and many independent record companies, music publishers and retail stores are struggling to stay in business or have gone out of business.

The RIAA has tried to combat file-sharing in several ways. At first, the RIAA limited its legal actions to the file-sharing services, winning lawsuits against Napster and Aimster. Although the RIAA suffered a setback, initially losing a lawsuit against file-sharing services Grokster and Morpheus, the U.S. Supreme Court ultimately reversed this decision in MGM Studios v. Grokster, ruling in favor of the record and film companies.

In addition to their legal efforts, the RIAA (as well as other organizations representing copyright owners such as the Motion Picture Association of America) have spent millions of dollars in educational efforts, including television advertising campaigns, to let people know that file-sharing of copyrighted works without permission is illegal. In May, 2003, the RIAA sent over four million instant messages to alleged copyright infringers using Kazaa and Grokster file-sharing software warning them that their illegal file-sharing activity is not anonymous and that they could be sued if they didn’t stop (according to the RIAA, these notices were sent to virtually all of the 261 individuals in the initial round of lawsuits filed in September, 2003). The RIAA also sent warning letters to many universities since many students use high-speed university Internet connections to download music using file-sharing software. In June, 2003, the RIAA filed lawsuits against four college students who were operating file-sharing networks over their universities computer networks, all of which were quickly settled. Despite the RIAA’s efforts to make the public aware of the illegality and the damage caused by file-sharing, use of file-sharing services continued to increase. That apparently convinced the RIAA that it had no choice but to begin suing individuals for illegal file-sharing.

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How can I get caught illegally sharing copyrighted music?

Although many people seem to believe that their actions online are anonymous, almost anything you do online can be traced. File-sharing in particular is not a private type of activity. As the name "file-sharing" implies, you are "sharing" files stored on your computer with other file-sharers. Since you are making the files on your computer available to others to download (unless you restrict the settings of the file-sharing software you are using), other people (including organizations representing copyright owners) can easily see what files you are sharing. Organizations such as the Recording Industry Association of America (RIAA) constantly monitor file-sharing activity in order to identify unauthorized uses of their members’ copyrighted works.

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Is it illegal to have file-sharing software installed on my computer?

No. Since there are legal, non-infringing uses for file-sharing software (e.g., sharing non-copyrighted files or sharing copyrighted files with the copyright owner’s permission), it is not illegal to have the software installed on your computer and to use it for legal means.

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What are the penalties for illegal file-sharing?

Under copyright law, there are both civil and criminal penalties although criminal copyright prosecutions are relatively rare:

  • Civil Remedies: A copyright owner (or an organization representing copyright owners such as the RIAA) can file a civil lawsuit against you for copyright infringement. If you are found to have infringed, you will be liable for either actual damages and the infringer's profits or statutory damages of $750 (in rare cases reduced to as low as $200) to $150,000 per infringement. For example, if you made 1000 copyrighted sound recordings available through a file-sharing service, the minimum statutory damages award would be $750,000 ($750 times 1000 copyrighted works infringed).  You might also likely be ordered to reimburse the copyright owner’s legal fees and costs in connection with the lawsuit (which can easily run into the tens of thousands of dollars and up for a lawsuit that goes to trial). In the lawsuits filed by the RIAA against individuals for illegally file-sharing, so far settlements have reportedly averaged between $3,000 to $5,000.
  • Criminal Liability: It is also possible that you could be criminally prosecuted for copyright infringement in certain circumstances (depending on the number and value of copyrighted works infringed). Criminal copyright infringement can result in penalties of up to 5 years in prison and $250,000 in fines for first offenses.
  • In addition, if you are a college student and use your university's computer network to illegally trade copyrighted files, you have probably violated your college’s computer use policy and can be subject to disciplinary action such as suspension of network access, probation, suspension and expulsion. Similarly, if you are an employee and you use your employer’s computer network to illegally trade copyrighted files, you may be subject to disciplinary action. Since service providers (entities providing Internet access) can be potentially liable for copyright infringements committed by their users, many colleges and companies have policies that strictly prohibit copyright infringement and some even monitor use of their networks to detect and deter infringing activity.

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If so many people are file-sharing, how can it be illegal?

It has been estimated that well over 60 million people have used file-sharing software. However, copyright owners are not required to sue everyone who infringes their copyrights. It would be practically impossible for copyright owners to pursue every illegal use of their works so copyright owners selectively enforce their rights. Similarly, the fact that the police do not give every driver who exceeds the speed limit a ticket, does not mean that they can’t pull you over and give you one. Copyright owners are free to sue certain file-sharers and not others in order to set examples and let people know that there can be consequences. The fact that many people may be violating the law does not excuse any one person's doing so.

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Will I be sued if I download music, but do not share the music on my computer with others?

Maybe. It is generally illegal to download copyrighted music without the copyright owner’s permission since doing so violates the copyright owner’s right to reproduce the copyrighted work. When you download, a copy (or reproduction) of the file is made on your computer hard drive. So far, the RIAA and other organizations have generally limited their lawsuits to people who have made large numbers of files (i.e., 1000 or more) available for others to download through file-sharing networks. Apparently, the RIAA believes that targeting individuals who are sharing a large number of files is the most likely way to reduce illegal file-sharing (which is probably a logical theory since if there are much fewer files available through file-sharing services, file-sharing activity may decline). Though the RIAA apparently hasn't yet targeted anyone for merely downloading, it is certainly possible that they (or other copyright owners) may do so in the future. Consequently, although it is less likely that you will be sued if you do not make files stored on your computer available for file-sharing, it is not safe to assume that this will prevent you from being sued.

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Can I be sharing files without realizing it?

Yes. Most of the file-sharing programs are automatically set up so that users authorize sharing of files stored on their computers with other users. Consequently, whenever you use the file-sharing software, you are allowing files stored on your computer to be shared. To prevent files stored on your computer from being available for others to download, you must change the file-sharing software settings. If you want to prevent files from being shared, see the University of Chicago’s website on how to disable peer to peer file-sharing.

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What if I get sued for file-sharing, but I didn’t realize I was doing anything wrong or illegal?

There is an old law school saying that ignorance of the law is not a defense. Even if you really didn’t know that unauthorized file-sharing of copyrighted works is illegal, you can still be held liable for copyright infringement. To allow otherwise would encourage people to remain ignorant of the law. However, it might be possible to assert that you are an innocent infringer (i.e., you were not aware and had no reason to believe that your acts constituted infringement) which can reduce the amount of money you’re liable for to as low as $200 per work infringed.  With all the publicity illegal file-sharing has received in the media over the past few years, courts may be unlikely to accept the innocent infringement argument since most people are probably aware (or should be aware) of the illegality of unauthorized file-sharing by now.

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Does file-sharing qualify as a fair use of copyrighted materials?

Not in most circumstances. Some people believe that file-sharing constitutes a "fair use" of copyrighted materials. Fair use use is a defense to copyright infringement which applies in certain limited situations. Although it is possible that some situations involving file-sharing might be fair use (for example, if I used a file-sharing service to download a song in one of the copyright law classes I teach for the sole purpose of educating students about copyright and file-sharing), the vast majority of file-sharing would not. Although fair use is a very complicated area of copyright law, in general it applies when a limited portion of a copyrighted work is used for purposes such as criticism, comment, news reporting, teaching, scholarship, or research.  File-sharing, on the other hand, is most commonly used solely for entertainment purposes.  Some people also believe that it is fair use to make copies of a recording you own for personal use.  Although this may be true, it is difficult to equate file-sharing with personal use since file-sharing inherently involves the potential for sharing with millions of other file-sharers all over the world.  In a lawsuit against file-sharing service Aimster, the court stated that the idea that "ongoing, massive, and unauthorized distribution and copying of copyrighted works somehow constitutes ‘personal use’ is specious and unsupported."

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What should I do if I’m sued for illegal file-sharing?

Since such a lawsuit is a serious matter that could end up costing you a lot of money, you should consult with an attorney who specializes in copyright law before doing anything else. A knowledgeable attorney will want to analyze the facts of your particular situation to determine whether you are likely to be found guilty of copyright infringement or whether any defenses (such as fair use) might apply to your situation. If it is likely that you have violated copyright law, an attorney can help negotiate a settlement and hopefully limit the amount of money you’re liable for as much as possible.

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Have the RIAA’s lawsuits been effective in combating illegal file-sharing?

Although its too early to tell what the long-term effects of the RIAA’s lawsuits will be, it seems that they may be having a limiting affect.  According to a survey by Nielsen/NetRatings, file-sharing using the Kazaa software has dropped by about 40% since the RIAA filed its first lawsuits against college students. Additionally, public awareness that it is illegal to use file-sharing technology to transfer copyrighted music has clearly increased considerably as a result of the media attention the RIAA enforcement efforts have generated. While estimates indicate that the overall amount of file-sharing has not decreased and may have increased, its possible that the lawsuits have at least limited the growth of illegal file-sharing, especially since broadband Internet access has increased dramatically in recent years which makes it much easier to download large files.

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Is there any potential solution to the problems posed by file-sharing of copyrighted works?

Maybe. Ultimately it is possible that file-sharing of copyrighted music may be legalized by imposing some type of mandatory licensing scheme under which file-sharing services pay fees that are used to compensate copyright owners for the distribution of their works through file-sharing. Theoretically at least, this could be similar to the licensing system that exists for performances of songs by radio stations. Radio stations pay annual blanket license fees to performance rights organizations (ASCAP, BMI and SESAC in the U.S.) which allow them to broadcast any music they want. The performance rights organizations monitor performances and pay copyright owners of songs (music publishers) and songwriters based on an estimate of the number of performances. In theory licensing may be a workable solution, but there are many issues that would need to be resolved (e.g., who pays, what should payment rates be based on, who collects and monitors, etc.) before such a system could be put in place. Although is not likely to happen quickly, it may be the best compromise to allow file-sharing of copyrighted works to continue while compensating the creators and copyright owners of the works being shared.  As mentioned above, there are a few legal file-sharing services although it remains to be seen whether they can become viable businesses.

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Aside from being sued for copyright infringement, are there other things to worry about from file-sharing?

Yes. File-sharing can pose several serious problems in addition to the risk of being sued for copyright infringement. First, computer viruses and spyware are sometimes transmitted using file-sharing software. You should be very careful in downloading and opening any files if you don’t know who they come from and what they contain. You should also make sure you are running updated virus protection software on your computer. File-sharing software is also sometimes used to pass along software programs known as "scumware." Scumware can take over your Web browser and add links to Web pages which send users to advertising sites or pornography sites. For more information, see www.scumware.com. Finally, in addition to music, file-sharing software has become a popular means of distributing adult-oriented photographs and pornography so if you find such content offensive or if you have children using file-sharing software, this may be something to be concerned about.

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How can I obtain or listen to music online legally?

Until recently, there weren't a lot of legal options for obtaining music online. However, this is changing rapidly. There are a growing number of companies that sell music online.  Many online music services are now obtaining licenses from copyright owners to legally make music available online. The following are just a few of the currently popular sites (several others are set to launch before the end of 2003):

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© 2007 David J. Moser.  The materials on this site are solely for educational and information purposes and may not be used for any other purpose without permission.