Advanced Copyright Issues on the Internet - Fenwick & West LLP

Several other copyright holders, including the artists Metallica and Dr. Dre and severalindependent recording artists and labels, as well as the Academy of Motion Picture Arts andSciences (AMPAS), ultimately also filed lawsuits against Napster for copyright infringement, allof which were eventually consolidated before Judge Patel in the Northern District of Californiaunder the Multi-District Litigation (MDL) rules of the federal courts. In July of 2000, thedistrict court entered a broad preliminary injunction against Napster. Before it took effect,however, the Ninth Circuit stayed the injunction pending an expedited appeal by Napster.After appeal, the Ninth Circuit issued an opinion affirming in part and reversing in part,with a remand to the district court to enter a modified preliminary injunction of narrower scope,which the district court did on Mar. 5, 2001. Both sides filed a second appeal to the NinthCircuit based on the Mar. 5 preliminary injunction. The Mar. 5 order was clarified by the districtcourt in a memorandum dated Apr. 26, 2001, then orally modified by the court from the benchon July 11, 2001. Ten days before the oral modification of the injunction, on July 1, 2001,Napster voluntarily suspended file sharing through its service. On July 18, 2001, the NinthCircuit stayed the district court’s July 11 oral modification of the preliminary injunction. BothNapster and the plaintiffs pursued further appeals to the Ninth Circuit in view of the July 11 oralorder. The Ninth Circuit consolidated those appeals with the earlier appeals of the Mar. 5modified injunction.The Napster cases raised a number of issues of significant importance to online copyrightlaw, and the district court and the Ninth Circuit took somewhat different approaches with respectto various of the issues. With respect to each issue, the district court’s analysis will first bedescribed, followed by the Ninth Circuit’s analysis of the issue. Because there were multipleappeals to the Ninth Circuit, the first opinion issued by the Ninth Circuit will be referred to as“Napster I,” to distinguish it from the later opinion issued by the Ninth Circuit as a result of thesubsequent consolidated appeals, which will be referred to as “Napster II.”2. Whether Any Otherwise Direct Infringement by Napster’s Users Was Immunized bythe AHRA. The district court ruled that Napster was both contributorily and vicariously liablefor infringing downloads of copyrighted material by its users via the Napster system. The courtruled that the plaintiffs had established a prima facie case of direct copyright infringement byNapster users because “virtually all Napster users engage in the unauthorized downloading oruploading of copyrighted music; as much as eighty-seven percent of the files available onNapster may be copyrighted, and more than seventy percent may be owned or administered byplaintiffs.” 1167 The Ninth Circuit in Napster I agreed, concluding that (i) the mere uploading offile names to the search index by Napster users, thereby making the files corresponding to thosefile names available for downloading (whether or not they were in fact downloaded by otherusers) constituted an infringement of the plaintiffs’ exclusive distribution rights and (ii) theunauthorized downloading of files containing copyrighted music by Napster users violated theplaintiffs’ exclusive reproduction rights. 11681167 Napster, 114 F. Supp. 2d at 911.1168 A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1014 (9 th Cir. 2001) (“Napster I”).- 268 -