Advanced Copyright Issues on the Internet - Fenwick & West LLP

Sony Corp. of Am. v. Universal City Studios, Inc., 1194 which held that a manufacturer is notliable for contributory infringement for selling a staple article of commerce that is “capable ofcommercially significant noninfringing uses,” 1195 even if that article is used to commit copyrightinfringement. Napster raised a number of uses of the Napster system that it argued were bothactual and potential commercially significant noninfringing uses. The district court found thatthe specific uses raised by Napster were in fact infringing:5. Sampling. Napster argued that many users use Napster to sample unfamiliar musicand then, if they like it, go purchase the music on CD. Napster argued that downloads initiatedfor sampling purposes and followed up by a purchase of the music, constituted fair use. Thedistrict court rejected this argument, ruling that sampling on Napster was not a “personal use inthe traditional sense that courts have recognized – copying which occurs within the householdand does not confer any financial benefit on the user,” and that instead sampling on Napsteramounted to “obtaining permanent copies of songs that users would otherwise have to purchase;it also carries the potential for viral distribution to millions of people.” 1196 The courtdistinguished this kind of sampling activity from the time-shifting of viewing that the SupremeCourt found a fair use in Sony, where time-shifting enabled a viewer to witness a broadcast thatthe viewer had been invited to view in its entirety free of charge; by contrast, the court noted thatthe plaintiffs almost always charged for their music. In addition, the court noted that themajority of VCR purchasers in Sony did not distribute taped television broadcasts, whereas aNapster user who downloads a copy of a song could make that song available to millions of otherindividuals. 1197 “The global scale of Napster usage and the fact that users avoid paying for songsthat otherwise would not be free militates against a determination that sampling by Napster usersconstitute personal or home use in the traditional sense.” 1198On appeal, Napster argued that the district court erred in concluding that sampling is acommercial use because it conflated a noncommercial use with a “personal use”; erred indetermining that sampling adversely affects the market for plaintiffs’ copyrighted music; and1194 464 U.S. 417 (1984).1195 Id. at 442.1196 Napster, 114 F. Supp. 2d at 913. This language suggests that the court may have misunderstood Napster’sargument about sampling, for the court included under the “sampling” rubric instances in which usersdownloaded and retained a permanent copy of songs which they “would otherwise have to purchase.” Napsterdefined “sampling” to be those instances in which a user downloaded a song, then followed up with a purchaseof the CD containing the song. In such instances, users would not be obtaining music that they “wouldotherwise have to purchase,” and Napster argued that such instances of true sampling should be deemed a fairuse. In any event, the district court found not credible a survey submitted by Napster’s expert showing that60% of online users who download free digital music do so to preview music before buying the CD, becauseNapster’s expert did not conduct the survey. The court further found a survey that the expert did conduct not tobe credible because the court found it inadequately supervised by the expert. Id. at 914. Finally, the court ruledthat even if sampling did enhance sales of plaintiffs’ CDs, that would not tip the balance in favor of fair use,because “courts have rejected the suggestion that a positive impact on sales negates the copyright holder’sentitlement to licensing fees or access to derivative markets.” Id.1197 Id. at 913.1198 Id. at 914.- 274 -