Advanced Copyright Issues on the Internet - Fenwick & West LLP

On appeal, the Ninth Circuit in Napster I also did not draw a distinction between a deviceand a service for purposes of applying the Sony doctrine, but rather, like the district court,distinguished between the Napster service itself and Napster’s relation to the operational use ofthe system: “We are compelled to make a clear distinction between the architecture of theNapster system and Napster’s conduct in relation to the operational capacity of the system.” 1219Thus, Napster could not be contributorily liable merely for offering a service that could be usedfor infringing uses, but could be liable if it had sufficient specific knowledge of use of theservice for infringing purposes in particular instances. 1220 This knowledge requirement isdiscussed further in the next subsection.9. The Elements of Contributory Liability. In order to establish contributory liability forthe acts of direct infringement by Napster’s users, the district court noted that the plaintiffs wererequired to show that Napster had knowledge of the infringing activity and that it induced,caused or materially contributed to the infringing conduct. 1221(i) The Knowledge Prong. With respect to the knowledge prong, the districtcourt found the plaintiffs had presented convincing evidence that Napster had both actual andconstructive knowledge of its users’ infringements. The district court found actual knowledgebecause: (1) a document authored by a co-founder of Napster, Sean Parker, mentioned the needto remain ignorant of users’ real names and IP addresses “since they are exchanging piratedmusic”; 1222 and (2) the RIAA had informed Napster of more than 12,000 infringing music filesbeing shared through the Napster system. 1223 Although Napster had terminated the accounts ofthe users offering those files, the district court noted that the songs were still available using theNapster service, as were other copyrighted works identified in the Schedules to the plaintiffs’complaint. 1224 The district court found constructive knowledge on Napster’s part because: (1)Napster executives had recording industry experience; (2) Napster possessed enoughsophistication about intellectual property laws to make claims against a rock band that copied itslogo; (3) Napster executives had downloaded copyrighted songs from the system; and (4) theyhad promoted the site with screen shots listing infringing files. 1225Napster had argued that the law of contributory infringement requires actual knowledgeof specific acts of infringement (which Napster argued that it did not have), 1226 that mere1219 Napster I, 239 F.3d at 1020.1220 Id. at 1020-21.1221 Napster, 114 F. Supp. 2d at 918 (citing Gershwin Publ’g Corp. v. Columbia Artists Management, Inc., 443 F.2d1159, 1162 (2d Cir. 1971)).1222 114 F. Supp. 2d at 918 (emphasis in original).1223 Id.1224 Id.1225 Id. at 919.1226 Napster argued that it had no specific knowledge that any particular use of a file through its system wasunauthorized. In particular, Napster argued that it could not know, any more than a photocopier or videorecorder manufacturer, which uses of its system were fair or not. Napster further argued that it could not knowthe copyright status of its users’ files. Neither CD audio files nor the resultant MP3 files carried any copyright- 278 -