THE NEW YORK TIMES AND NAPSTER: How The Supreme Court's Ruling In Favor Of Freelance Writers Could Keep Online Music Sharing Alive

Reports of Napster's death have been greatly exaggerated. In granting a victory to freelance writers, the Supreme Court's June decision in New York Times v. Tasini may also have handed Napster a possible new lease on life.

Freelancers Sue the New York Times and Win

The lead plaintiff in Tasini was Jonathan Tasini, a freelance writer who had penned some articles for the New York Times in the early 1990s. When Tasini discovered that the paper was republishing his articles in electronic databases without permission or payment, he sued, claiming the newspaper was violating his copyright.

Tasini argued that while he had given the Times the right to publish his articles in its newspaper, this right did not include the right to republish his work in electronic form. Justice Ruth Bader Ginsburg, writing for the majority of the Court, agreed: the right of initial publication, she reasoned, did not automatically subsume the right to include the work in an online database. That right remained with Tasini.

So far, the story is pretty straightforward–Tasini and the other freelancer plaintiffs gave a limited publication right to the paper, and the paper exceeded that right, infringing upon the authors' copyright. But there's a catch.

The Possibility of Compulsory Publication

Here's where it gets interesting. One might have thought that Tasini (or any other freelancer who benefited from the ruling) could put this decision in his back pocket and decide whether or not he would let the New York Times publish his pieces in its electronic database. But the Court stopped short of giving him this right.

Rather, the Court suggested that the trial court could fashion a creative solution that ensured that Tasini's articles, and those of other freelancers, would still be available to the public in electronic databases. The Court noted that the goals of copyright law are "not always best served by automatically granting injunctive relief." Thus, just because Tasini owns his articles, that does not mean that he can force the New York Times to remove them from its databases. The Court even implied that the trial court could compel Tasini and other freelancers to allow the Times to license their work for publication in electronic databases–as long as they were compensated.

This is indeed a surprising turn. Normally, we would expect that the owner of a piece of property can do what she likes with it, within the limits of nuisance, tort, and criminal law. One might have thought that the pro-property rights libertarians on the Court would have rebelled at any interference with property rights. However, both Justices Scalia and Thomas signed onto Justice Ginsburg's opinion.

Moreover, the interest in control over a piece of First Amendment-protected intellectual property, in particular, seems even more deep: freelancers for the left-leaning Nation might rebel if, for example, their work were republished without their permission in the right-leaning National Review's online database, regardless of how handsomely they were paid. Writers have traditionally had the right not to publish, as well as the right to control where they publish.

Why did the Court suggest possible limits on the freelancers' property right? Because the majority was responding to the concern that there would be "holes in history" created by the removal of the freelancers' important work from electronic databases.

The Court suggested that such holes might be avoided if the two sides–the authors and the publishers–could get together and agree contractually on the terms of electronic publication. Failing that, the Court noted that the holes still could be addressed by the lower courts and Congress — each of which could "draw on numerous models for distributing copyrighted works and remunerating authors for their distribution." The Court offered the example of a law that allows noncommercial public broadcasters the right to use music or photos, either by voluntary negotiation or — importantly — by compulsory license.

Compulsory Licensing: Eminent Domain for the Written Word

A compulsory license forces a copyright or patent owner to permit someone else to use the work for a predetermined fee. Accordingly, it precludes the owner from refusing to license his or her work to other people in certain, specified circumstances. In the compulsory licensing model the Court cited, for example, if the parties cannot agree on a royalty for a given copyright license, then an arbitration panel would decide the rate for them.

Under the doctrine of eminent domain, the government may declare a piece of land necessary for public use and then simply take the land — as long as it pays the landlord a reasonable price. (If a reasonable price is not paid, a Takings Clause suit will result.) Compulsory licensing is the eminent domain of intellectual property. It, too, allows the state to interfere with an individual's property as long as compensation is paid, and mandates that the amount of compensation be determined objectively, not subjectively. That is, even if the owner wants a higher license fee, he or she must settle for the fee an arbitrator considers reasonable.

Calls for compulsory license are increasing. Recently, some have demanded that pharmaceutical companies be compelled to license AIDS medicines for local production in poor countries devastated by the disease (and, indeed, some countries' laws allow for this).

In Tasini, the trial court could require the parties to try to negotiate a royalty and, if they failed to agree, impose a royalty set by binding arbitration. The arbitration fallback would mean the New York Times would not have to negotiate individually with every one of its former freelancers, and could maintain a complete online database of articles (including even those of freelancers who could not be reached or would not negotiate). It would also mean that the freelancers would not have to face the "holes" possibility that their work might simply be taken offline, as the paper has threatened to do.

How Compulsory Licensing Could Revive Napster

Like the New York Times, Napster argued in federal court that it was not violating anyone's copyright — and lost. But unlike the Times, Napster was required by the court to obtain permission from each individual copyright owner (that is, the owner of every song distributed through the Napster system) before going forward.

The difference was crucial: in the Napster case, the judge's ruling left all the cards in the hands of the recording companies, who hold most of the copyrights and only a few of whom have shown any interest in licensing them for Napster's use. Accordingly, the companies persuaded the trial judge, Marilyn Hall Patel, to require Napster to implement an increasingly onerous series of filters designed to screen out copyrighted materials. Then, when the filters did not entirely work, Judge Patel shut down the site until it could demonstrate 100% compliance — although, as of this writing, the appellate court has stayed her order temporarily.

Now, with the Tasini case in hand, Napster can now go back to Judge Patel and argue that the court should force the music publishers back to the negotiating table, and, if negotiation fails, impose a compulsory licensing scheme, with court-set royalties.

Using compulsory licensing with Napster, where the user can download a particular, sought-after song, would be unusual and atypical. Yet in some ways, it might also be especially appropriate.

When the state gives out a copyright or a patent, it grants a monopoly to the copyright or patent holder. Compulsory licenses help to avoid abuse of that monopoly — preventing, for example, a recording company from seeking to reduce competition (and competitive pricing) in the sale of its works by restricting the number of venues where its music is sold online. We do not yet know if the recording companies are abusing their monopoly on online distribution, but the threat of a compulsory license would moot the question.

If royalties are set by negotiation or compulsory licensing, Napster (and its users) will have to pay in order for the site to survive — but at least survival will be an option. Otherwise, the recording companies will be able to shut out Napster entirely in favor of their own, industry-controlled, online services.

Fundamentally, Tasini suggests that courts have substantial power to fashion creative remedies that take into account not just the copyright owner's, but also society's interests in intellectual property. The Napster case might present a good opportunity for a court to exercise that creativity.