Advanced Copyright Issues on the Internet - Fenwick & West LLP

erroneously concluded that sampling is not a fair use because it determined that samplers mayalso engage in other infringing activity. 1199 The Ninth Circuit in Napster I rejected thesechallenges, ruling that the plaintiffs had “established that they are likely to succeed in provingthat even authorized temporary downloading of individual songs for sampling purposes iscommercial in nature,” based on evidence in the record that the record company plaintiffs collectroyalties for song samples available on Internet retail sites and that such samples, unlike in thecase of Napster, are only partial samples of the whole work and often time out afterdownload. 1200 In addition, the Ninth Circuit concluded that the record supported the districtcourt’s preliminary determinations that the more music that sampling users download, the lesslikely they are to eventually purchase the recordings on CD, and even if the audio market is notharmed, Napster had adverse effects on the developing digital download market. 1201 “[P]ositiveimpact in one market, here the audio CD market, [should not] deprive the copyright holder of theright to develop identified alternative markets, here the digital download market.” 12026. Space-Shifting. As an additional noninfringing use, Napster argued that manyNapster users use the service to “space-shift,” i.e., “converting a CD the consumer already ownsinto MP3 format and using Napster to transfer the music to a different computer – from home tooffice, for example.” 1203 The district court found that such use was a de minimis portion ofNapster use and not a significant aspect of Napster’s business, and could therefore not qualify asa substantial noninfringing use under Sony:According to the court’s understanding of the Napster technology, a user whowanted to space-shift files from her home to her office would have to log-on tothe system from her home computer, leave that computer online, commute towork, and log-on to Napster from her office computer to access the desired file.Common sense dictates that this use does not draw users to the system. 1204As support for its argument that space-shifting constitutes a fair use, Napster invoked thepassage, quoted in subsection 2 above, discussing the AHRA from the Ninth Circuit’s decisionin Recording Indus. Ass’n of Am. v. Diamond Multimedia Sys. 1205 In particular, Napsterfocused on the last sentence of that passage, in which the Ninth Circuit stated, “The Rio merelymakes copies in order to render portable, or ‘space-shift,’ those files that already reside on auser’s hard drive.” 1206 Napster argued that by virtue of this passage, the Ninth Circuit had heldthat space-shifting of works already owned constitutes a fair use.1199 Napster I, 239 F.3d at 1018.1200 Id.1201 Id.1202 Id.1203 Napster, 114 F. Supp. 2d at 904.1204 Id. at 904-05.1205 180 F.3d 1072 (9th Cir. 1999).1206 Id. 1079 (citations omitted).- 275 -