The UCLA Online Institute for Cyberspace Law and Policy

A&M Records v. Napster:

MP3 File Sharing Disputes Continue in the Aftermath of Recent Court Rulings

On March 5^th, 2001, Judge Marilyn Patel issued a revised injunction consistent with the February 12^th decision by the Ninth Circuit Court of Appeals in this case.

While compliance issues and other matters continue to be sorted out in the aftermath of these rulings, many Netizens have continued their file sharing practices via the Gnutella Network.

Highlights of the March 5^th Injunction

· Napster is enjoined from “engaging in, or facilitating others in, copying, downloading, uploading, transmitting, or distributing copyrighted sound recordings…”

· However, “the Ninth Circuit held that the burden of ensuring that no copying, downloading, uploading, transmitting or distributing of plaintiffs’ copyrighted works occurs on the system is shared between the parties. The court ‘place[d] the burden on plaintiffs to provide notice to Napster’ and imposed on Napster the burden ‘of policing the system within the limits of the system.’

· The Record Industry Plaintiffs must “provide notice to Napster of their copyrighted sound recordings by providing for each work: (A) the title of the work; (B) the name of the featured recording artist performing the work (“artist name”); (C) the name(s) of one or more files 1 available on the Napster system containing such work; and (D) a certification that plaintiffs own or control the rights allegedly infringed.”

· “All parties shall use reasonable measures in identifying variations of the filename(s), or of the spelling of the titles or artists’ names, of the works identified by plaintiffs. If it is reasonable to believe that a file available on the Napster system is a variation of a particular work or file identified by plaintiffs, all parties have an obligation to ascertain the actual identity (title and artist name) of the work and to take appropriate action within the context of…[the March 5^th]…Order.”

· “Once Napster ‘receives reasonable knowledge’…of specific infringing files containing copyrighted sound recordings,” it shall, “within three (3) business days, prevent such files from being included in the Napster index (thereby preventing access to the files corresponding to such names through the Napster system).”

The Ninth Circuit Decision – February 12, 2001

On February 12, 2001, the U.S. Court of Appeals for the Ninth Circuit announced its decision in A&M Records v. Napster. The appeals court essentially upheld the lower court opinion, but sent the case back to craft a new injunction against Napster that is less broad.

Judge Beezer summarized the central features of the new decision by stating the following:

“The district court correctly recognized that a preliminary injunction against Napster's participation in copyright infringement is not only warranted but required. We believe, however, that the scope of the injunction needs modification in light of our opinion. Specifically, we reiterate that contributory liability may potentially be imposed only to the extent that Napster: (1) receives reasonable knowledge of specific infringing files with copyrighted musical compositions and sound recordings; (2) knows or should know that such files are available on the Napster system; and (3) fails to act to prevent viral distribution of the works. See Netcom, 907 F. Supp. at 1374-75. The mere existence of the Napster system, absent actual notice and Napster's demonstrated failure to remove the offending material, is insufficient to impose contributory liability. See Sony, 464 U.S. at 442-43.

“Conversely, Napster may be vicariously liable when it fails to affirmatively use its ability to patrol its system and preclude access to potentially infringing files listed in its search index. Napster has both the ability to use its search function to identify infringing musical recordings and the right to bar participation of users who engage in the transmission of infringing files. The preliminary injunction which we stayed is overbroad because it places on Napster the entire burden of ensuring that no "copying, downloading, uploading, transmitting, or distributing" of plaintiffs' works occur on the system. As stated, we place the burden on plaintiffs to provide notice to Napster of copyrighted works and files containing such works available on the Napster system before Napster has the duty to disable access to the offending content. Napster, however, also bears the burden of policing the system within the limits of the system. Here, we recognize that this is not an exact science in that the files are user named. In crafting the injunction on remand, the district court should recognize that Napster's system does not currently appear to allow Napster access to users' MP3 files.”

On July 28, 2000, the appellate court had granted Napster an eleventh hour stay, enabling the company to keep operating as before while its appeal is heard. Napster was appealing the July 26, 2000 decision by Judge Marilyn Patel, U.S. District Court for the Northern District of California, granting the record industry's request for a preliminary injunction.

Napster’s Legal Arguments

In response to Judge Patel’s ruling, Napster had set forth a number of key legal arguments under U.S. Copyright Law. In general, the company insisted that…

Napster users are not direct copyright infringers, because they are either covered by the immunity granted by the Audio Home Recording Act (AHRA) and/or their use is a fair use; and
Even if there is direct copyright infringement, the elements of contributory copyright infringement & vicarious liability have not been shown.

Specifically, Napster’s attorneys set forth the following points in their briefs…

The AHRA, Section 1008, immunizes all noncommercial consumer copying of music in digital or analog form.
The district court erred in concluding that generalized knowledge is all that is required under the contributory copyright infringement doctrine.
Under the substantial non-infringing uses exception set forth in Sony v. Universal, contributory copyright infringement will not be found if the product in question is capable of "substantial non-infringing uses."

Millions of authorized uses of Napster, by tens of thousands of artists, render Napster capable of substantial non-infringing uses.
Future authorization and sharing of secured files render Napster capable of substantial non-infringing uses.
Space shifting of copyrighted music is a fair use.
Sampling of copyrighted music is a fair use (and indeed helps increase sales of CD’s).

Under the rules for vicarious liability, Napster neither has a specific right and ability to control or supervise direct infringers, nor does it have a direct financial benefit which depends on the infringing nature of the activity (cf Fonovisa).
In addition, in cases where vicarious liability has been imposed, the direct infringer and the vicarious infringer were both commercial parties to a commercial endeavor.

Napster’s Policy Arguments

Many commentators have argued in favor of Napster on policy grounds. Recurring contentions rely on one or more of the following points…

The importance and inevitability of peer-to-peer technology.
Sony v. Universal stands for the principle that you do not outlaw new technology before all the implications and potential uses of the technology can be ascertained.
Even if Napster loses, the technology – and the file sharing that accompanies it – will not disappear.

This highly publicized dispute has been documented in great detail in both the national and international media, and the ongoing developments continue to be watched very closely by Internet stakeholders and members of the legal and public policy communities.

Key Resource Material - A&M Records v. Napster:

· Judge Patel’s Revised Injunction – March 6, 2001

· Judge Beezer’s Ninth Circuit Opinion – February 12, 2001

· The Bertelsmann-Napster “Deal”: An Overview – October 31, 2000

· Napster's Appellate Brief Seeking to Overturn the Preliminary Injunction - Ninth Circuit Court of Appeals - Filed August 18, 2000

· RIAA FAQ - Napster Lawsuit - August 21, 2000

· Napster's Successful Emergency Motion for Stay - July 27, 2000

· RIAA Press Release in Response to the Granting of the Stay - July 28, 2000

Relevant Documents - U.S. District Court Case

· Full Text of Judge Patel's Decision, August 2000

· RIAA Press Release - June 12, 2000

· Napster Press Release - July 3, 2000