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Napster & Research in Motion
Napster & Research in Motion
Manisha Thapa
Westcliff University
An intellectual property right is the right given to individual for their creation in order
to protect their creation from being violated or from unauthorized access. In the intellectual
property right, the owner or creator get the exclusive right for certain period of a time. The
major purpose of such right is to protect the owner’s creations from being copied or misused.
There are several types of the intellectual property rights such as copyright, patents,
Patent: Patent right protect the owner’s creation from being copied, sold, or being used by
any other party without permission from the authorized owners. The patent owner holds an
authority to grant the license to the third party with a mutual agreement or buy or sold of the
Trademark: a distinctive sign or symbol that helps to identify the product. The trademark
Copyright: the right given to any tangible creation. Copyright protects the creation of artist
and authors such as music, art, paintings, books, movies and soon. This gives the creators an
exclusive right to protect their creation from any unauthorized access or copy. The purpose of
Trade Secret: it refers to the protection of the company’s confidential information including
strategies, formulas, operating procedure in order to prevent the unauthorized access. Trade
secrets are intellectual property rights on company’s confidential information which may be
sold or licensed.
The intellectual property is infringed when someone violates work protected by intellectual
property law without permission of the creator. The infringement act is carried either through
limiting the product whereas piracy refers to the act of copying others creation without
permission. The infringement of intellectual right is prohibited by the law that creator or
owner have the right to take the legal action against the party. Similarly, the creator or owner
hold the right to transfer the products or services to other party either through licensing or
Patent Infringement: the patent right is given to the creator or owner to protect their
creativity for certain period. The government enforce the patent right to protect the
innovation or creativity from being misused. To get the patent right, owner or creator must
file for patent right within a year of publicly disclosing the creation (Nambale, 2012). The
patent right is granted once government provides an approval. Patent can be categorized into
three types:
1. Utility Patent: this type of patent covers the processes, compositions, machines, and
manufactures that are new and useful. This right protects the innovation for 20 years
2. Design Patent: this protects the new and unique designs. Usually, this patent works
for 14 years.
3. Plant Patent: It is an intellectual property right that preserves the main characteristics
of a new and original plant from being reproduced, marketed or used by others.
Thus, the patent infringement happens when the unauthorized party use or sell the
creation without permission of patent holders. The patent holders have the right to filed
against the party who damage or misused the rights. The infringement cases are settled in
the court where the patentee can claim the damages cause by the unauthorized party. The
other party must pay fine or royalty including the loss the patentee has bear during the
period.
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Copyright Infringement: the act of using the preserved material of copyright holders
right given to some party to protect their creativity for certain party. So, if the right given
infringement. Music and movies are the examples of copyright infringement. The
copyright holders could grant the permission to use the works or creation to any third
party agreeing on certain mutual terms and conditions as a licensing agreement or sell to
any other party. Various factors might lead to the copyright infringement. Such as
technology is major factors that lead to copyright infringement because the technology
has made easier to copy a product or information of other party (N M& Aswath, 2016).
The development of emerging technology has surpassed the capacity of the regulatory
system to ensure that new formats are protected by copyright. Also, many companies are
generating huge amount of profit replicating or copying other products. Hence, the
Primary infringement: the act of copying the work of copyright holders. For instance,
Secondary infringement: the act of infringement without actually copying the work of
copyright holders. This can happen through selling the infringement copies, distributing
Napster was started in 1999 as an online file sharing service. The Napster provide a
platform to the users which facilitates users to download music file without any charges and
also facilitate peer to peer sharing of music files. Users were able to watch the music through
internet and share it as well. Most of the users used the Napster service to upload and
download the copyright music. The Recording Industry Association of America involving the
times warner Inc, Sony Corp and other many recording companies filed against the Napster
for copyright infringement claiming that Napster operates it business sharing the music which
they don’t own and also has no the permission. While RIAA allocated that around 20 million
people shared the file via Napster that results the loss in sale of music industry costing $300
million (Ariel, 2000). Napster was fined over $40 million as a result of copyright
infringement while Napster settle the case by paying $26 million dollar and further to pay
remaining fine, Napster changed the business structure. Further, Napster filed chapter 11
NTP Inc is a Virginia based Patent holding company in the field of wireless email and
RF antenna designs. NTP has licensed various other companies such as Nokia, Visto, Good
technology and RIM. The RIM licensing agreement is the result of settlement patent
infringement case. In 2006, NTP suit a file of patent infringement against the Research in
Motion seeking to shutdown the popular blackberry service of RIM. Prior to and during its
proceedings, NTP, whose primary assets are its patents, constantly sought to license them to
R.I.M. however, RIM didn’t respond to NTP which leads to lawsuit filed against RIM stating
RIM used the wireless email technique of NTP (Austen, 2006). Similarly, the court also
stated that RIM has infringed the patent and this caused the loss of $33 million to NTP. The
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case is settled when the RIM agreed to pay $612.5 million to settle a long-running patent
dispute.
In the case I, Napster was sued for contributory infringement and vicarious
infringement refers to being liable for the infringing activities done by other as
the party is not making any effort to control the infringing act even though
they have ability to control it. The recording association claims that Napster is
guilty for contributory copyright infringement. Also, Napster was aware of the
the violation rendering the complainants likely to succeed in this claim. While
court found that Napster zero effort to mitigate the infringement and also
company was benefited financially from it. Thus, Napster was sued for
vicarious infringement.
In case 2, RIM was sued by NTP claiming RIM has used wireless email
infringement NTP filed against RIM and eventually the court found that RIM
willfully infringe the patent. The infringement has cost $ 33 million damages
to RIM. The court judges increase the penalty fine to $ 53 million as the patent
infringement was willful. Further the court also order RIM to pay the legal fee
of the NTP costing $4.5 million as well as issue an injunction to cease and
Case 1: The American recording association filed a case against the Napster
claiming unauthorized access given to user for downloading and sharing the
videos. RIAA along with the times warner Inc, Sony Corp and other many
recording companies filed against the Napster for copyright infringement. The
In case 2, NTP filed against Research in motion claiming the use of wireless
email technology. NTP sent the notice to RIM regarding the license of wireless
email technology however, RIM didn’t respond. NTP sued against RIM claiming
3. Financial Damages
Case I: RIAA allocated that file shared from Napster by 20 million users has resulted
the loss in sales of $300 million. After the judgment from the court, Napster has to
Case 2: RIM patent infringement has damaged around $33 million to NTP. The court
increases the royalty cost to $53 million stating RIM has made willful infringe
including the $4.5 million. The case is settled when the RIM agreed to pay $612.5
Case 1: This case was partially settled as Napster paid $26 million dollar and changed
the business structure to pay the remaining fine. Napster filed chapter 11 bankruptcy
Case 2: RIM and NTP first tried to settle down the case through negotiation however,
negotiation canceled due to some legal issues and the case later on was handled by the
court where both parties came into agreement and RIM paid $612.5 million to NTP.
After all the terms and infringement fine was paid by RIM, litigation against RIM was
Contractual Issues
Contract can be defined as the agreement between two parties that is enforceable by
the court of law. Contract legally bind two parties defining the rights and obligations of both
parties. Whereas the contractual issues arise when two party fails to meet the contractual
obligations or breach the contract. If one party breach the contract another party has right to
file the case against another party claiming the damage caused.
Case 1: Napster doesn’t have any kind of contractual relationship with any
companies.
Case 2: RIM and NTP doesn’t have any contractual relationship. After the patent
infringement by RIM, both NTP and RIM went into negotiation and tried to settle the
$ 450 million which was later on failed due to some legal issues. However, the case
was settled at $612.5 million. During the negotiation, NTP allowed RIM to use the
mobile email patented inventions in their goods and services. NTP has licensed
various other companies such as Nokia, Visto, Good technology and RIM. The RIM
licensing agreement is the result of settlement patent infringement case. While NTP
also filed the lawsuit against other various telecommunication companies such as
Corporate Issues
Case 1: American recording association filed a case against the Napster claiming
business performed by Napster is not being ethically carried out as Napster were
act of distributing the copyright material. Also, RIAA allocated that file shared
from Napster by 20 million users has resulted the loss in sales of $300 million.
The case trial was long and Napster has to pay the fined costing $40 million after
the judgement from the court. When Napster paid $26 million dollars and altered
the company structure to cover the remaining fine, this case was partly settled.
Case 2: before filing against the RIM, NTP has sent notice regarding the licensing
didn’t respond and NTP sued against RIM claiming the willful infringement. both
NTP and RIM went into negotiation and tried to settle the $ 450 million which
was later on failed due to some legal issues. However, the case was settled at
$612.5 million.
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Legal Issues
Case 1: Napster was sued by the Music Industry Association of America accusing
that federal law protects personal copying of songs. Napster has faced copyright
infringement under copyright laws of united states. The trailer song of Metallica band
was released from their site before releasing the song officially. The court also made
the judgement that Napster is guilty for violating the copyright creations. While court
declared that Napster is involved into two infringement as per the federal law of
Case 2: NTP sued RIM claiming the use of patent wireless email technology for
producing the blackberry software. Later on, court also declare that RIM has willfully
infringe the patent product of NTP and as a fine RIM paid $612.5 million to settle the
case.
Bankruptcy issues
bankruptcy however it was forced to liquidate its assets. Napster had to completely
stop the business operation. After the bankruptcy of Napster, other company i.e.,
Roxio bought the name and trademark of Napster at the price of $5 million.
Case 2: No bankruptcy was filed by RIM and NTP as both of them settle the dispute
Conclusion
Hence, if anyone violates work covered by intellectual property law without the
creator's permission, the intellectual property is infringed. The infringement of the patent thus
occurs when the unauthorized party uses or sells the production without the patent holders'
permission. The holders of the patent have the right to lodge a lawsuit against the party that
has violated or misused the copyright. Likewise, the growing Internet facility has therefore
led to the infringement of copyright as well as created barriers for copyright holders.
In the above case, Napster was sued by the Music Industry Association of America
accusing Napster for promoting an unrestrained, unauthorized online bazaar while NTP sued
RIM claiming the use of patent wireless email technology for producing the blackberry
software
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Reference
Ariel, B. (2000). RIAA v. Napster: A Window onto the Future of Copyright Law in the
Internet Age
Austen, I. (2006). Another Patent Case Is Filed Against Maker of BlackBerry. Retrieved from
Bonadio, E. (2008). Remedies and Sanctions for the Infringement of IPR Under EC Law.
n.a, (2013). Case Study: A&M Records, Inc. v. Napster, Inc. Retrieved from:
https://onlinelaw.wustl.edu/blog/case-study-am-records-inc-v-napster-inc/
2455-104X.
10.2139/ssrn.2798213.
Woszczynski, A & Caylor, J. (1998). Winners and Losers in the Napster Case.