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javier
Spain
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<!-==text==begin==-> Hello EBabies.
Mostmusic fans congregating in Napster’s chat roomsyesterday were seeking an answer to a simplequestion: “How long do we have???”. Besidessetting off a stampede to download free musicbefore it is too late, yesterday’s decision by athree-judge panel of the Ninth Circuit Court ofAppeals in San Francisco — that Napster should beprohibited from enabling the swapping ofcopyrighted music — appeared to hand a significantvictory to the recording industry in its crusadeagainst Internet piracy. It was a sad day for us,because the music companies try to take offfredoom of obtaining our cool music. However, Idon’t think it’s the end; there are other websiteslike Napster, for example:
www.imesh.com andothers
which allow us to keep downloadingMP3 files and listening to music with all offreedoom.
Here is the complet text of theNapster decision. I know it’s too long to read,but I hope it serves in order to express mydisagreement with this decision and in the futurewe’ll be able to fight against the abusivebusiness of recording industry.
Have agreatday.
Javier.
Appeal fromthe United States District Court
for theNorthern District of California
MarilynHall Patel, Chief District Judge,Presiding
Argued and Submitted October 2,2000
San Francisco, California
FiledFebruary 12, 2001
Before: SCHROEDER, ChiefJudge, BEEZER and PAEZ, CircuitJudges.
BEEZER, CircuitJudge:
Plaintiffs are engaged in thecommercial recording, distribution and sale ofcopyrighted musical compositions and soundrecordings. The complaint alleges that Napster,Inc. (“Napster”) is a contributory and vicariouscopyright infringer. On July 26, 2000, thedistrict court granted plaintiffs’ motion for apreliminary injunction. The injunction wasslightly modified by written opinion on August 10,2000. A&M Records, Inc. v. Napster, Inc., 114 F.Supp. 2d 896 (N.D. Cal. 2000). The district courtpreliminarily enjoined Napster “from engaging in,or facilitating others in copying, downloading,uploading, transmitting, or distributingplaintiffs’ copyrighted musical compositions andsound recordings, protected by either federal orstate law, without express permission of therights owner.” Id. at 927. Federal Rule of CivilProcedure 65© requires successful plaintiffs topost a bond for damages incurred by the enjoinedparty in the event that the injunction waswrongfully issued. The district court set bond inthis case at $5 million.
We entered atemporary stay of the preliminary injunctionpending resolution of this appeal. We havejurisdiction pursuant to 28 U.S.C. § 1292(a)(1).We affirm in part, reverse in part andremand.
I
We have examined thepapers submitted in support of and in response tothe injunction application and it appears thatNapster has designed and operates a system whichpermits the transmission and retention of soundrecordings employing digital technology.
In 1987, the Moving Picture Experts Groupset a standard file format for the storage ofaudio recordings in a digital format calledMPEG-3, abbreviated as “MP3.” Digital MP3 filesare created through a process colloquially called”ripping.” Ripping software allows a computerowner to copy an audio compact disk (“audio CD”)directly onto a computer’s hard drive bycompressing the audio information on the CD intothe MP3 format. The MP3’s compressed format allowsfor rapid transmission of digital audio files fromone computer to another by electronic mail or anyother file transfer protocol.
Napsterfacilitates the transmission of MP3 files betweenand among its users. Through a process commonlycalled “peer-to-peer” file sharing, Napster allowsits users to: (1) make MP3 music files stored onindividual computer hard drives available forcopying by other Napster users; (2) search for MP3music files stored on other users’ computers; and(3) transfer exact copies of the contents of otherusers’ MP3 files from one computer to another viathe Internet. These functions are made possible byNapster’s MusicShare software, available free ofcharge from Napster’s Internet site, and Napster’snetwork servers and server-side software. Napsterprovides technical support for the indexing andsearching of MP3 files, as well as for its otherfunctions, including a “chat room,” where userscan meet to discuss music, and a directory whereparticipating artists can provide informationabout their music.
A. Accessing theSystem
In order to copy MP3 files throughthe Napster system, a user must first accessNapster’s Internet site and download “To downloadmeans to receive information, typically a file,from another computer to yours via your modem . .. . The opposite term is upload, which means tosend a file to another computer.” United States v.Mohrbacher, 182 F.3d 1041, 1048 (9th Cir. 1999)(quoting Robin Williams, Jargon, An InformalDictionary of Computer Terms 170-71 (1993)). theMusicShare software to his individual computer.See http://www.Napster.com . Oncethe software is installed, the user can access theNapster system. A first-time user is required toregister with the Napster system by creating a”user name” and password.
B. ListingAvailable Files
If a registered user wantsto list available files stored in his computer’shard drive on Napster for others to access, hemust first create a “user library” directory onhis computer’s hard drive. The user then saves hisMP3 files in the library directory, usingself-designated file names. He next must log intothe Napster system using his user name andpassword. His MusicShare software then searcheshis user library and verifies that the availablefiles are properly formatted. If in the correctMP3 format, the names of the MP3 files will beuploaded from the user’s computer to the Napsterservers. The content of the MP3 files remainsstored in the user’s computer.
Onceuploaded to the Napster servers, the user’s MP3file names are stored in a server-side “library”under the user’s name and become part of a”collective directory” of files available fortransfer during the time the user is logged ontothe Napster system. The collective directory isfluid; it tracks users who are connected in realtime, displaying only file names that areimmediately accessible.
C. Searching ForAvailable Files
Napster allows a user tolocate other users’ MP3 files in two ways: throughNapster’s search function and through its”hotlist” function.
Software located onthe Napster servers maintains a “search index” ofNapster’s collective directory. To search thefiles available from Napster users currentlyconnected to the network servers, the individualuser accesses a form in the MusicShare softwarestored in his computer and enters either the nameof a song or an artist as the object of thesearch. The form is then transmitted to a Napsterserver and automatically compared to the MP3 filenames listed in the server’s search index.Napster’s server compiles a list of all MP3 filenames pulled from the search index which includethe same search terms entered on the search formand transmits the list to the searching user. TheNapster server does not search the contents of anyMP3 file; rather, the search is limited to “a textsearch of the file names indexed in a particularcluster. Those file names may containtypographical errors or otherwise inaccuratedescriptions of the content of the files sincethey are designated by other users.” Napster, 114F. Supp. 2d at 906.
To use the “hotlist”function, the Napster user creates a list of otherusers’ names from whom he has obtained MP3 filesin the past. When logged onto Napster’s servers,the system alerts the user if any user on his list(a “hotlisted user”) is also logged onto thesystem. If so, the user can access an index of allMP3 file names in a particular hotlisted user’slibrary and request a file in the library byselecting the file name. The contents of thehotlisted user’s MP3 file are not stored on theNapster system.
D. Transferring Copies ofan MP3 file
To transfer a copy of thecontents of a requested MP3 file, the Napsterserver software obtains the Internet address ofthe requesting user and the Internet address ofthe “host user” (the user with the availablefiles). See generally Brookfield Communications,Inc. v. West Coast Entm’t Corp., 174 F.3d 1036,1044 (9th Cir. 1999) (describing, in detail, thestructure of the Internet). The Napster serversthen communicate the host user’s Internet addressto the requesting user. The requesting user’scomputer uses this information to establish aconnection with the host user and downloads a copyof the contents of the MP3 file from one computerto the other over the Internet, “peer-to-peer.” Adownloaded MP3 file can be played directly fromthe user’s hard drive using Napster’s MusicShareprogram or other software. The file may also betransferred back onto an audio CD if the user hasaccess to equipment designed for that purpose. Inboth cases, the quality of the original soundrecording is slightly diminished by transfer tothe MP3 format.
This architecture is describedin some detail to promote an understanding oftransmission mechanics as opposed to the contentof the transmissions. The content is the subjectof our copyright infringementanalysis.
II
We review a grant ordenial of a preliminary injunction for abuse ofdiscretion. Gorbach v. Reno, 219 F.3d 1087, 1091(9th Cir. 2000) (en banc). Application oferroneous legal principles represents an abuse ofdiscretion by the district court. Rucker v. Davis,_ F.3d _, 2001 WL 55724, at *4 (9th Cir. Jan.24, 2001) (en banc). If the district court isclaimed to have relied on an erroneous legalpremise in reaching its decision to grant or denya preliminary injunction, we will review theunderlying issue of law de novo. Id. at *4 (citingDoes 1-5 v. Chandler, 83 F.3d 1150, 1152 (9th Cir.1996)).
On review, we are required todetermine, “whether the court employed theappropriate legal standards governing the issuanceof a preliminary injunction and whether thedistrict court correctly apprehended the law withrespect to the underlying issues in the case.” Id.”As long as the district court got the law right,’it will not be reversed simply because theappellate court would have arrived at a differentresult if it had applied the law to the facts ofthe case.’” Gregorio T. v. Wilson, 59 F.3d 1002,1004 (9th Cir. 1995) (quoting Sports Form, Inc. v.United Press, Int’l, 686 F.2d 750, 752 (9th Cir.1982)).
Preliminary injunctive relief isavailable to a party who demonstrates either: (1)a combination of probable success on the meritsand the possibility of irreparable harm; or (2)that serious questions are raised and the balanceof hardships tips in its favor. Prudential RealEstate Affiliates, Inc. v. PPR Realty, Inc., 204F.3d 867, 874 (9th Cir. 2000). “These twoformulations represent two points on a slidingscale in which the required degree of irreparableharm increases as the probability of successdecreases.” Id.
III
Plaintiffs claimNapster users are engaged in the wholesalereproduction and distribution of copyrightedworks, all constituting direct infringement.Secondary liability for copyright infringementdoes not exist in the absence of directinfringement by a third party. Religious Tech.Ctr. v. Netcom On-Line Communication Servs., Inc.,907 F. Supp. 1361, 1371 (N.D. Cal. 1995) (“[T]herecan be no contributory infringement by a defendantwithout direct infringement by another.”). Itfollows that Napster does not facilitateinfringement of the copyright laws in the absenceof direct infringement by its users. The districtcourt agreed. We note that the district court’sconclusion that plaintiffs have presented a primafacie case of direct infringement by Napster usersis not presently appealed by Napster. We only needbriefly address the threshold requirements.
A. Infringement
Plaintiffs must satisfytwo requirements to present a prima facie case ofdirect infringement: (1) they must show ownershipof the allegedly infringed material and (2) theymust demonstrate that the alleged infringersviolate at least one exclusive right granted tocopyright holders under 17 U.S.C. § 106. See 17U.S.C. § 501(a) (infringement occurs when allegedinfringer engages in activity listed in § 106);see also Baxter v. MCA, Inc., 812 F.2d 421, 423(9th Cir. 1987); see, e.g., S.O.S., Inc. v.Payday, Inc., 886 F.2d 1081, 1085 n.3 (9th Cir.1989) (“The word ‘copying’ is shorthand for theinfringing of any of the copyright owner’s fiveexclusive rights . . . .”). Plaintiffs havesufficiently demonstrated ownership. The recordsupports the district court’s determination that”as much as eighty-seven percent of the filesavailable on Napster may be copyrighted and morethan seventy percent may be owned or administeredby plaintiffs.” Napster, 114 F. Supp. 2d at 911.
The district court further determined thatplaintiffs’ exclusive rights under § 106 wereviolated: “here the evidence establishes that amajority of Napster users use the service todownload and upload copyrighted music. . . . Andby doing that, it constitutes-the uses constitutedirect infringement of plaintiffs’ musicalcompositions, recordings.” A&M Records, Inc. v.Napster, Inc., Nos. 99-5183, 00-0074, 2000 WL1009483, at *1 (N.D. Cal. July 26, 2000)(transcript of proceedings). The district courtalso noted that “it is pretty much acknowledged .. . by Napster that this is infringement.” Id. Weagree that plaintiffs have shown that Napsterusers infringe at least two of the copyrightholders’ exclusive rights: the rights ofreproduction, § 106(1); and distribution,§ 106(3). Napster users who upload file names tothe search index for others to copy violateplaintiffs’ distribution rights. Napster users whodownload files containing copyrighted musicviolate plaintiffs’ reproduction rights.
Napster asserts an affirmative defense to thecharge that its users directly infringeplaintiffs’ copyrighted musical compositions andsound recordings.
B. FairUse
Napster contends that its users do notdirectly infringe plaintiffs’ copyrights becausethe users are engaged in fair use of the material.See 17 U.S.C. § 107 (“[T]he fair use of acopyrighted work . . . is not an infringement ofcopyright.”). Napster identifies three specificalleged fair uses: sampling, where users maketemporary copies of a work before purchasing;space-shifting, where users access a soundrecording through the Napster system that theyalready own in audio CD format; and permissivedistribution of recordings by both new andestablished artists.
The district courtconsidered factors listed in 17 U.S.C. § 107,which guide a court’s fair use determination.These factors are: (1) the purpose and characterof the use; (2) the nature of the copyrightedwork; (3) the “amount and substantiality of theportion used” in relation to the work as a whole;and (4) the effect of the use upon the potentialmarket for the work or the value of the work. See17 U.S.C. § 107. The district court firstconducted a general analysis of Napster systemuses under § 107, and then applied its reasoningto the alleged fair uses identified by Napster.The district court concluded that Napster usersare not fair users. Napster asserts that becauseplaintiffs seek injunctive relief, they have theburden of showing a likelihood that they wouldprevail against any affirmative defenses raised byNapster, including its fair use defense under 17U.S.C. § 107. See Atari Games Corp. v. Nintendo,975 F.2d 832, 837 (Fed. Cir. 1992) (followingNinth Circuit law, and stating that plaintiff mustshow likelihood of success on prima faciecopyright infringement case and likelihood that itwould overcome copyright misuse defense); see alsoDr. Seuss Enters. v. Penguin Books USA, 924 F.Supp. 1559, 1562 (S.D. Cal. 1996) (“Theplaintiff’s burden of showing a likelihood ofsuccess on the merits includes the burden ofshowing a likelihood that it would prevail againstany affirmative defenses raised by thedefendant.”), aff’d, 109 F.3d 1394 (9th Cir.1997); Religious Tech. Ctr. v. Netcom On-LineCommunication Servs., 923 F. Supp. 1231, 1242 n.12(1995) (same); 2 William W. Schwarzer et al.,California Practice Guide, Federal Civil ProcedureBefore Trial 13:47 (2000) (advising that when apreliminary injunction is sought “plaintiff mustdemonstrate a likelihood of prevailing on anyaffirmative defense as well as on plaintiff’s casein chief”). But see Fair Use of Copyrighted Works,H.R. Rep. 102-836 n.3 (criticizing a NorthernDistrict of New York case in which “the districtcourt erroneously held that where the copyrightowner seeks a preliminary injunction, thecopyright owner bears the burden of disproving the[fair use] defense”); see also 1 William F. Patry,Copyright Law & Practice, 725, 725 n.27 (1994)(citing cases placing burden on defendant atpreliminary injunction stage).
The districtcourt stated that “defendant bears the burden ofproving . . . affirmative defenses.” Napster, 114F. Supp. 2d at 912. Plaintiffs assert that thedistrict court did not err in placing the burdenon Napster. We conclude that even if plaintiffsbear the burden of establishing that they wouldlikely prevail against Napster’s affirmativedefenses at the preliminary injunction stage, therecord supports the district court’s conclusionthat Napster users do not engage in fair use ofthe copyrighted materials. We agree. We firstaddress the court’s overall fair use analysis.
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