Intellectual property consists of two separate branches: industrial property and copyright property. Industrial property covers ideas such as inventions, trademarks and industrial designs, where as copyrighted property covers literary works, music and photographic and artistic works. What deems being called copyrighted property is the heart of the RIAA v. Napster lawsuit. Are digitally-created MP3 files the exclusive property of the artists who created the music or is it considered legal for a music fan to create them from an original copy and distribute them all over the Internet?

Traditionally speaking, the Copyright Act of 1909 compensates the musicians with a royalty each time a song is transmitted onto any recorded format that can be replayed. This act creates a value that each artist could receive each time one of his or her pieces of music is distributed throughout cyberspace. The Copyright Act of 1976 updated many of the laws concerning copyrights that the United States maintained since 1909. The Copyright Act of 1976 brought about the limitations on exclusive rights such as fair use (Section 107), limitations on exclusive rights like copies by libraries and archives (Section 108) and the scope of the exclusive rights such as the use of copyrights when dealing with computers and other information systems (Section 117). Although this act covered an extensive amount of copyright protection laws, it would need to be updated in order to cover the new problems concerning copyrights with the dawn of digital music, which can be created on a computer.

Although much of the Copyright Acts of 1909 and 1976 hold their value today, the Digital Millennium Copyright Act of 1998 (DMCA) was considered to be an important piece of legislation for rulings in the entertainment industry. What the DMCA does is place the burden on the user instead of making the service provider responsible for an illegal action on the part of the user. The DMCA was written to protect services such as America Online (AOL) in the instance that AOL users were trading illegal material, such as child pornography, online. Communication lawyers have questioned whether the DMCA can cover online music trading communities, such as Napster. New York lawyer Neil Rosini claims, "The DMCA was never intended for companies like Napster." The RIAA feels that when it comes to Napster, the DMCA is not applicable. According to the RIAA, "Copyright law has long recognized that someone who materially contributes to infringing activity, with knowledge of that activity, is liable for copyright infringement."

Numerous legal experts have weighed in with their opinions on the RIAA v. Napster case, mainly because the decision could have a tremendous affect on copyright law in the 21st century. One issue is whether it is legal or not to record songs on a computer. The Audio Home Recording Act (AHRA) allows for the use of digital audio recording devices for personal, non-commerical recording of copyrighted music-without liability. However, it is unclear if a computer would qualify for the exception, since at least one court has ruled that a computer is not a digital audio recording device.
Digital Millenium Copyright Act
Audio Home Recording Act