hen Michael Robertson emerged last week from a Manhattan court, pale beneath his California tan, the chief executive of the MP3.com online music service told reporters that consumers want to be able to listen to their music from wherever they are. That MP3.com's technology allows them to do that. And that the law shouldn't get in the way.
Unfortunately for Mr. Robertson, a federal judge had just ruled that his San Diego-based start-up must pay Universal Music Group up to $250 million for infringing its copyrights.
There is a large legal irony here. MP3.com may be thoroughly punished (the company is appealing the ruling), even though it has tried to ensure that people pay for copies of the music they want to listen to, said Pamela Samuelson, co-director of the University of California's Berkeley Center for Law and Technology. By contrast, Napster, another high-profile Internet music company being sued by the major record labels, has so far eluded any legal sanction for its activities, even though it exists to give people free access to the same music.
The MP3.com verdict seems to underscore a mismatch between the intentions of traditional copyright law — to strike a balance between the rights of owners and the interests of users — and its effect in the Internet era.
As books and movies follow music from the physical to the digital realm, some legal experts argue that a new balance must be struck between copyright holders and the users of their works if copyright is to continue to drive economic and creative development.
"As these cases and others like them get sorted out we will learn to what extent copyright law is being interpreted to give the owners of content an indirect monopoly over the development of useful consumer information technologies," said Peter Jaszi, a law professor at American University. "That's really the stake in both of these cases."
For those just tuning into the digital music drama, Napster is a San Mateo, Calif.-based company whose software allows users to quickly find music files on the Internet and copy them to their own digital collection, without regard to copyright. Millions use the service daily.
My.MP3.com, the MP3.com service at issue in the company's court battle with Universal, took a very different approach, one that Judge Jed S. Rakoff commended in contrast to what he called, in an apparent reference to Napster, "the kind of lawless piracy seemingly characteristic of some others operating in this area."
My.MP3.com lets people listen to music they already own, but without carrying their CD's with them. All they need to do is log onto MP3.com's Web site from any Internet-connected device.
The service works by verifying ownership of every music CD a user inserts into the CD-ROM drive of his computer. A copy is then made from MP3.com's database of CD's and deposited into the user's on-line locker. A user could also buy a CD from an on-line retailer, which records the transaction with MP3.com.
Judge Rakoff found, however, that it was illegal for the company to copy tens of thousands of CD's into its database, and most legal experts agree that, under the letter of the law, it is.
Meanwhile, a recent federal judge's order that would also have shut down Napster was stayed by the Ninth Circuit Court of Appeals, and some legal analysts, Ms. Samuelson and Mr. Jaszi among them, think Napster has a better chance of winning its battle with the major record labels than MP3.com.
Napster argues that, since users of the service aren't buying or selling the music they listen to, no one is infringing anyone's copyright. Therefore the company cannot be liable. In its appeals brief, the company cites the 1992 Audio Home Recording Act, which the same appeals court found in a previous case protects all noncommercial copying by consumers of digital and analog music recordings.
The brief states: "The line Congress drew was between commercial and noncommercial copying. If Plaintiffs have a quarrel with that line given the scale of noncommercial sharing that the Internet now facilitates, they must address those concerns to Congress."
Some legal experts and business executives suggest that the eventual outcome of the two cases may well provoke Congress to adjust the law to fit the realities of new technology.
Meanwhile, though, the current system is seen as an obstacle by Internet music entrepreneurs. Doug Camplejohn, the chief executive of Myplay, a competitor of MP3.com, said the license terms now being offered by the record companies are not economically viable without charging consumers a subscription fee to get access to music they already own. For that reason, Myplay's two million users will continue to laboriously copy and upload their own CD's.
"There are a whole set of services that will grow the entire record industry as well as make opportunities for companies like ours that we are not able to do today because the law prevents us," Mr. Camplejohn said. "The consumers are ultimately the ones who end up suffering."
