Advanced Copyright Issues on the Internet - Fenwick & West LLP

months later, the district court ruled that the plaintiffs were entitled to a preliminary injunctionon grounds of contributory and vicarious liability. 1354 Aimster appealed.The Seventh Circuit, per Judge Posner, affirmed the issuance of the preliminaryinjunction, finding that Aimster was likely liable as a contributory infringer. 1355 The bulk of thecourt’s opinion was devoted to an analysis of the scope of the Supreme Court’s “substantialnoninfringing use” doctrine in the Sony case, on which Aimster relied heavily for its defense.Judge Posner seems to have significantly reinterpreted that doctrine using a classic “Chicagoschool” law and economics analysis. (The viability of Judge Posner’s interpretive approach toSony’s “substantial noninfringing use” doctrine, whether or not it led to the correct substantiveoutcome, is at best dubious after the Supreme Court’s Grokster decision discussed in SectionIII.C.2(c)(5) below. 1356 )He began the analysis by noting that Sony’s Betamax video recorder was used for threeprincipal purposes – time shifting (recording a television program for later viewing), librarybuilding (making copies of programs to retain permanently), and commercial skipping (taping aprogram before watching it and then, while watching the tape, using the fast-forward button onthe recorder to skip over the commercials). 1357 He noted that the Supreme Court held the firstuse to be a fair use because it enlarged the audience for the program, but went on to note, indicta, that the second and third uses were “unquestionably infringing” – the second because “itwas the equivalent of borrowing a copyrighted book from a public library, making a copy of itfor one’s personal library, then returning the original to the public library,” and the third becauseit “amounted to creating an unauthorized derivative work … namely a commercial-free copy thatwould reduce the copyright owner’s income from his original program, since ‘free’ televisionprograms are financed by the purchase of commercials by advertisers.” 1358 Thus, according to1354 In re Aimster <strong>Copyright</strong> Litigation, 252 F. Supp. 2d 634, 665 (N.D. Ill. 2002). The district court also rejectedAimster’s argument of a defense under the AHRA. The court first ruled that Aimster’s users were plainlyengaged in direct copyright infringement and that the AHRA did not provide an affirmative defense to theusers’ acts of direct copying. Invoking the Ninth Circuit’s Diamond Multimedia decision, discussedextensively in Section III.C.2(c)(1).2 above, Aimster argued that the AHRA immunized all noncommercialcopying by consumers of digital and analog musical recordings. The district court rejected this argument,distinguishing Diamond Multimedia on the grounds that in that case users were merely space shifting files fromtheir hard drives to a portable digital device for their own personal use. By contrast, the Aimster serviceinvolved the copying of MP3 files from one user’s hard drive onto the hard drive of another user, and suchmassive, unauthorized distribution and copying of the plaintiffs’ works was not within the scope of the AHRA.Id. at 648-49.1355 In re Aimster <strong>Copyright</strong> Litigation, 334 F.3d 643 (7th Cir. 2003), cert. denied, 124 S. Ct. 1069 (2004).1356 See Mitchell Zimmerman, “Grokster Seems Unlikely to Prevent File Sharing by Itself,” The Daily Journal(Aug 15, 2005); earlier version available online in Fenwick & West’s IP Bulletin (Fall 2005), p. 3, athttp://www.fenwick.com/docstore/Publications/IP/IP_bulletins/IP_Bulletin_Fall_2005.pdf#xml=http://www.fenwick.com/publications/indices.asp?cmd=pdfhits&DocId=115&Index=C%3a%5cdtindex%5cwebsite%5cIP&HitCount=4&hits=632+10de+1109+11a3+&hc=143&req=Zimmerman.1357 Id. at 647.1358 Id. at 647-48. The ruling that recording for commercial skipping constitutes the making of an unauthorizedderivative work is curious. First, it seems novel to judge the legality of a reproduced work on the subsequentpotential use that a user may put the work to. Second, the work that was actually fixed in the tangible mediumby the video recorder was the entire television program, including the commercials without modification. It is- 304 -