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conduct a reasonable investigation beforehand if they want to preserve the right to claim later that they were misled. In Napster's case, the due diligence proved to be anything but routine. A credit check turned up the first of Fanning's two major overdue debts. The assault charge emerged as well. Though they troubled Lilienthal, neither item was a deal breaker for him. The bigger problem was U.S. copyright law. Grosfeld spent most of two months getting deeper and deeper into the state of the law and the prognosis for Napster. He hired the law firm of Weil, Gotshal & Manges to research the newly passed Digital Millennium Copyright Act and read the court rulings that would later prove crucial to Napster's chances for survival, rulings that had arisen from topics as diverse as VCRs and flea markets.

The outlook was not good.

In 1998, spurred by fears that the Internet had enabled both mass instantaneous copying of intellectual property and perfection in the quality of those copies, Congress had passed the Digital Millennium act. The law extended existing copyright protections into cyberspace. And it made it a felony to circumvent technical measures that protected copyrighted material, or to distribute programs whose primary purpose was to crack those measures. After intense debate, the law also included some exceptions designed to translate some of the balances of existing copyright law into the digital era. Among those balances were the fair-use doctrine, which allows critics to quote passages of a book or an article, and protection for libraries and their equivalents, which allow the public to peruse published work. And the law codified what had been worked out in some court cases, including one in which the Church of Scientology had sued not just disaffected church members who had published the church's sacred-and copyrighted-teachings on the Internet, but also the Internet service provider that had allowed them to do it.

The judge in the Scientology case had ruled that if the Internet service provider did not monitor what its users did, it was acting like a phone company, and therefore shouldn't be held responsible for what customers said to each other. The Internet provider was more like a library than a publishing house. As long as it responded to complaints by the copyright holder after the fact, it couldn't be liable for the content. Following that ruling, the DMCA gave explicit protection to Internet

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