Advanced Copyright Issues on the Internet - Fenwick & West LLP

works and files. This burden-shifting alleviated concerns that Napster was beingpenalized simply because of its peer-to-peer file sharing system. Morefundamentally, the Ninth Circuit’s modification balanced the broad equitablediscretion of this court with the doctrine that injunctive relief should avoidprohibiting legitimate conduct. … Simply put, the Ninth Circuit’s burden-shiftingis case-specific, designed to alleviate Sony concerns. 1302Moreover, the district court was troubled that Napster’s argument might imply that evenif it had actual knowledge of specific infringement, Napster could simply wait until the plaintiffsdiscovered the infringement and then remove the offending files. The court believed such anargument would turn copyright law on its head and encourage willful blindness. 1303 Finally, thecourt expressed the belief that, had the Ninth Circuit intended to overhaul copyright liability andcarve out special protections for computer service providers, “it would have explicitly statedsuch a change.” 1304 Accordingly, the court concluded that the plaintiffs had adequately pleadedclaims for contributory and vicarious liability. 130517. The Second, Consolidated Appeal to the Ninth Circuit. In the second appeal to theNinth Circuit, Napster argued that the notification requirements imposed on the plaintiffs by theMar. 5 modified injunction were mandated by the Ninth Circuit’s opinion in Napster I, and thateven if they were not, their imposition was not an abuse of discretion by the district court.However, Napster argued that the policing obligations of the Mar. 5 modified injunction weretoo indeterminate to meet the requirements of Rule 65 of the Federal Rules of Civil Procedure,because the Mar. 5 order did not specify the extent, and at what cost, Napster was required todischarge its policing obligations. Unless clarified, Napster argued that the policing obligationswould potentially authorize massive blocking of noninfringing works. Napster also argued thatthe Mar. 5 order impermissibly delegated judicial functions to Dr. Nichols. 1306With respect to the July 11 oral order, Napster argued that the district court lackedjurisdiction to issue the order because it constituted a modification of the Mar. 5 order, whichwas on appeal. Napster noted that the Ninth Circuit, in its stay order, had itself characterized the1302 Id. at *30.1303 Id. at *31.1304 Id. at *33. The court also rejected Napster’s interpretation of the Netcom decision, discussed in SectionII.A.4(a) above, as requiring notice of specific infringing files prior to filing suit. “Notice was an issue inNetcom only because notice was the means by which Netcom acquired knowledge of infringement. It wasundisputed that prior to notice Netcom did not have the requisite knowledge for contributory infringement. …[T]he issue in the present actions is not how Napster came by knowledge of infringement, but whether suchknowledge exists.” Id. at *35-36. The district court found the Ninth Circuit’s reading of Netcom in Napster Ito be in accord. “The Ninth Circuit noted that the situation in Netcom, where a computer service provider hasactual knowledge of specific infringing files, is sufficient to give rise to liability. The court never stated thatactual knowledge (or notice for that matter) was necessary for liability.” Id. at *36-37 (emphasis in original).1305 Id. at *39.1306 “Napster Asks 9 th Circuit to Modify 1 Order, Vacate Another,” Mealey’s Cyber Tech & E-Commerce LitigationReporter (Aug. 2001) 5-6.- 295 -