Advanced Copyright Issues on the Internet - Fenwick & West LLP

have not shown that the majority of Napster users download music to sell – thatis, for profit. However, given the vast scale of Napster use among anonymousindividuals, the court finds that download and uploading MP3 music files with theassistance of Napster are not private uses. At the very least, a host user sending afile cannot be said to engage in a personal use when distributing that file to ananonymous requester. Moreover, the fact that Napster users get for freesomething they would ordinarily have to buy suggests that they reap economicadvantages from Napster use. 1187The Ninth Circuit affirmed this ruling in Napster I, agreeing with the district court thatthe downloading was not transformative, and that Napster users were engaging in commercialuse of the copyrighted materials because (i) users could not be said to be engaged in a “personaluse” when distributing a file to an anonymous requester and (ii) Napster users get something forfree they would ordinarily have to buy. 1188 “Direct economic benefit is not required todemonstrate a commercial use. Rather, repeated and exploitative copying of copyrighted works,even if the copies are not offered for sale, may constitute a commercial use.” 1189 Because therecord demonstrated that Napster users’ repeated copying was made to save the expense ofpurchasing authorized copies, such uses were commercial, causing the first factor to weigh infavor of plaintiffs. 1190The district court held that the second factor – nature of the copyrighted work – weighedagainst fair use because the copyrighted sound recordings and compositions at issue werecreative in nature. The third factor – amount and substantiality of the portion used in relation tothe whole – also weighed against fair use because copies of entire works were beingdownloaded. 1191 Finally, the district court found that the fourth factor – the effect on thepotential market for the copyrighted work – weighed against fair use because the plaintiffs hadproduced evidence that Napster use harmed the markets for their copyrighted works by (i)reducing CD sales among college students and (ii) raising barriers to plaintiffs’ own entry intothe market for digital downloading of music because of competition from a service from whichrecordings could be obtained free. 1192 The Ninth Circuit affirmed all of these rulings inNapster I. 11934. The Sony Doctrine of Substantial Noninfringing Uses. Napster argued that it couldnot be contributorily or vicariously liable for operating the Napster service under the doctrine of1187 Napster, 114 F. Supp. 2d at 912.1188 Napster I, 239 F.3d at 1015.1189 Id.1190 Id.1191 Napster, 114 F. Supp. 2d at 913.1192 Id. Napster submitted survey evidence which it argued showed that Napster use actually stimulated more salesof CDs containing the plaintiffs’ works than it displaced. The court did not find this evidence credible, andinstead credited evidence submitted by the plaintiffs’ experts which the plaintiffs claimed showed that Napsteruse was likely to reduce CD purchases by college students. Id. at 909-10.1193 Napster I, 239 F.3d at 1016-17.- 273 -