Intellectual Property, Pages 523–529

A&M Records, Inc. v. Napster, Inc.

United States Court of Appeals for the Ninth Circuit, 2001
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Facts:

Napster ran a file-sharing site where users could add songs to its directory. Napster did not host the songs, but merely listed files users said they had and provided addresses to those users' computers to facilitate those users to freely send music directly between each other. Napster's users widely infringed on plaintiffs' exclusive rights of reproduction and distribution.

Issue:

Is Napster secondarily liable for its users' copyright infringement?

Procedural History:

District court found that Napster was secondarily liable.

Defendant's Argument:

Napster's users were engaged in fair use of the copyrighted material, so we cannot be subject to secondary liability. There were fair uses of sampling, space-shifting, and allowing indie artists to upload their own songs.

Rule:

See:

Fair Use

Reasoning:

  1. This just transferring the files. There is nothing transformative about the use.
  2. Music is creative and hence should get more protection than fact-based works.
  3. Napster's users were engaged in wholesale copying.
  4. Napster reduces audio CD sales among college students and makes it harder for the plaintiffs to sell their music for money online.
  5. This is not space-shifting. Users are not just accessing their own songs from another location. They are making them available to millions of other individuals. Plaintiffs are not trying to stop artists from uploading their own songs to Napster. Those functions could be retained.

Reasoning:

  • Napster is liable for contributory copyright infringement:

    1. Napster knew that its site was being used to infringe copyrights. Although we cannot impute knowledge to Napster merely because it could be used to infringe plaintiffs' copyrights, its failure to demonstrate other commercially significant noninfringing uses allows it to be.
    2. Napster materially contributed to the infringing material. Its site provides the site and facilities for direct infringement.

  • Napster is liable for vicarious copyright liability:

    1. The availability of infringing material brought more users to Napster's site, which its future revenue was directly dependent one.
    2. Napster could have searched its directory for infringing song titles and removed them and blocked the infringing users. It had the right to supervise it.

Holding:

Napster is secondarily liable for its users copyright infringement. Affirmed.