A & M Records v. Napster, Inc.
239 F.3d 1004 (2001)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
An online service provider is liable for contributory copyright infringement if it has knowledge of specific infringing activities on its system and materially contributes to that infringement. A provider is liable for vicarious copyright infringement if it has the right and ability to supervise the infringing activity and derives a direct financial benefit from it.
Facts:
- Napster, Inc. created and distributed free proprietary software called MusicShare.
- Users installed the software to participate in a peer-to-peer file-sharing network operated by Napster.
- Users could convert audio from compact discs into MP3 digital files and store them on their own computer hard drives.
- When a user logged into the Napster system, the software would scan their hard drive for MP3 files and send a list of the file names to Napster's central servers.
- Napster's servers compiled these lists into a collective, searchable index of music files available from all currently online users.
- The actual MP3 files remained on individual users' computers, not on Napster's servers.
- Using the Napster software, a user could search the index, locate a desired music file on another user's computer, and initiate a direct peer-to-peer transfer to download an exact copy of the file.
- The vast majority of files shared via Napster, estimated at over 87%, were copyrighted musical works for which the copyright owners, including A&M Records, had not given permission for distribution.
Procedural Posture:
- A&M Records, Inc. and other record companies sued Napster, Inc. in the U.S. District Court for the Northern District of California, alleging contributory and vicarious copyright infringement.
- The plaintiffs moved for a preliminary injunction to prevent Napster from facilitating the infringement of their works.
- The district court granted the plaintiffs' motion for a preliminary injunction.
- Napster (appellant) appealed the district court's injunction order to the U.S. Court of Appeals for the Ninth Circuit, with A&M Records (appellees) defending the order.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Is an online peer-to-peer file-sharing service liable for contributory and vicarious copyright infringement when its users upload and download copyrighted musical works without the copyright owners' permission?
Opinions:
Majority - Beezer, Circuit Judge
Yes, an online peer-to-peer file-sharing service is liable for contributory and vicarious copyright infringement under these circumstances. The court first affirmed the district court's finding that Napster users were engaged in direct copyright infringement. The court rejected Napster's fair use defense, finding that the users' activity was primarily commercial in character (getting for free what they would otherwise buy), involved creative works, constituted wholesale copying, and harmed the present and future markets for the copyrighted music. For contributory infringement, Napster was liable because it had both actual and constructive knowledge of the infringing activity and materially contributed by providing the 'site and facilities'—the software and centralized index—essential for the infringement. For vicarious infringement, Napster was liable because it derived a direct financial benefit from the infringement, as the availability of copyrighted music acted as a 'draw' for its user base, and it had the right and ability to supervise the infringing activity by terminating user access to its system, which it failed to do.
Analysis:
This landmark decision established that the principles of secondary copyright liability apply to peer-to-peer network operators and other online service providers. It clarified that the 'staple article of commerce' defense from Sony does not protect a provider who has actual knowledge of specific infringing uses and fails to take action. The ruling set a significant precedent for holding technology companies responsible for their users' infringing conduct, shaping the legal landscape for digital content distribution and influencing the development of services like iTunes and Spotify.
Unlock the full brief for A & M Records v. Napster, Inc.