Advanced Copyright Issues on the Internet - Fenwick & West LLP

The district court, in a terse analysis of the AHRA in a footnote, rejected the argumentthat Section 1008 of the AHRA immunized the actions of Napster’s users for two reasons. First,the court ruled that the “AHRA is irrelevant to the instant action” because “[n]either the recordcompany nor music publisher plaintiffs have brought claims under the AHRA.” 1184 Second, thecourt labeled the passage from Diamond quoted above and cited by Napster as “dicta” and foundit to be “of limited relevance”:The Diamond Multimedia court did opine that making copies with the Rio tospace-shift, or make portable, files already on a user’s hard drive constitutes“paradigmatic noncommercial personal use entirely consistent with the purposesof the Act [i.e. the facilitation of personal use].” However, this dicta is of limitedrelevance. Because plaintiffs have not made AHRA claims, the purposes andlegislative history of the AHRA do not govern the appropriateness of apreliminary injunction against Napster, Inc. Furthermore, as explained below, thecourt is not persuaded that space-shifting constitutes a substantial, noninfringinguse of the Napster service. The Ninth Circuit did not discuss the fair use doctrinein Diamond Multimedia. 1185On appeal in Napster I, the Ninth Circuit affirmed the conclusion that the AHRA did notimmunize the activities of Napster users in sharing audio files, although on a different rationalefrom the district court. The Ninth Circuit did not endorse the district court’s rationale that theAHRA was inapplicable merely because the plaintiffs had not brought claims under the AHRA.Instead, the Ninth Circuit cited its rulings in Diamond that computers and their hard drives arenot “digital audio recording devices” and that computers do not make “digital musicalrecordings,” as those terms are defined in the AHRA. Accordingly, the AHRA does not coverthe downloading of MP3 files to computer hard drives. 11863. The Fair Use Doctrine Generally. Napster also contended that its users did notdirectly infringe plaintiffs’ copyrights because the users were engaged in a noncommercial, fairuse of the materials. The district court rejected this argument, ruling that the downloading ofmusical recordings through Napster did not qualify generally under the four fair use factors.With respect to the first factor – the purpose and character of the use – the district court held thatdownloading MP3 files was not transformative and, although Napster did not charge for itsservice, was commercial in nature:Although downloading and uploading MP3 music files is not paradigmaticcommercial activity, it is also not personal use in the traditional sense. Plaintiffsthe hard drive back onto a CD or onto a Rio for her own or a friend’s personal use, she would not haveimmunity. Napster argued that constructions of statutory language that lead to absurd results clearly contrary tolegislative intent must be rejected, citing United Steel Workers v. Weber, 443 U.S. 193, 204 (1979); Train v.Colorado Public Interest Research Group, 426 U.S. 1, 7 (1975); Ozawa v. United States, 260 U.S. 178, 194(1922). Napster’s PI Opp. Br., supra note 1173, at 8 n.8.1184 Napster, 114 F. Supp. 2d at 915 n.19.1185 Id. (citations omitted; emphasis in original).1186 Napster I, 239 F.3d at 1024-25.- 272 -