Fall Of Napster Essay

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Fall Of Napster

The Fall of Napster

A & M RECORDS, INC.,v. NAPSTER, INC., Defendant(s).

No. C 99-05183 MHP

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA

2000 U.S. Dist. LEXIS 6243; 54 U.S.P.Q.2D (BNA) 1746; Copy. L. Rep. (CCH) P28,072


May 5, 2000, Decided
May 5, 2000, Filed


On December 6, 1999, plaintiff record companies filed suit alleging contributory and
vicarious federal copyright infringement and related state law violations by defendant
Napster, Inc. ("Napster"). Now [*2] before this court is defendant's motion for summary
adjudication of the applicability of a safe harbor provision of the Digital Millennium
Copyright Act ("DMCA"), 17 U.S.C. section 512(a), to its business activities. Defendant
argues that the entire Napster system falls within the safe harbor and, hence, that
plaintiffs may not obtain monetary damages or injunctive relief; except as narrowly
specified by subparagraph 512(j)(1)(B). In the alternative, Napster asks the court to find
subsection 512(a) applicable to its role in downloading MP3 music files, n1 as opposed to
searching for or indexing such files. Having considered the parties' arguments and for the
reasons set forth below, the court enters the following memorandum and order.


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n1 The Motion Picture Experts Group first created MP3 in the early 1980s as the audio
layer 3 of the MPEG-1 audiovisual format. MP3 technology allows for the fast and efficient
conversion of compact disc recordings into computer files that may be downloaded over the
Internet. See generally Recording Industry Ass'n of America v. Diamond Multimedia Systems
Inc., 180 F.3d 1072, 1073-74 (9th Cir. 1999) (discussing MP3 technology).


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BACKGROUND

Napster--a small internet start-up based in San Mateo, California--makes its proprietary
MusicShare software freely available for Internet users to download. Users who obtain
Napster's software can then share MP3 music files with others logged-on to the Napster
system. MP3 files, which reproduce nearly CD-quality sound in a compressed format, are
available on a variety of websites either for a fee or free-of-charge. Napster allows
users to exchange MP3 files stored on their own computer hard-drives directly, without
payment, and boasts that it "takes the frustration out of locating servers with MP3
files." Def. Br. at 4.


Although the parties dispute the precise nature of the service Napster provides, they
agree that using Napster typically involves the following basic steps: After downloading
MusicShare software from the Napster website, a user can access the Napster system from
her computer. The MusicShare software interacts with Napster's server-side software when
the user logs on, automatically connecting her to one of some 150 servers that Napster
operates. The MusicShare software reads a list of names of MP3 files that the user has
elected to make available. [*4] This list is then added to a directory and index, on the
Napster server, of MP3 files that users who are logged-on wish to share. If the user wants
to locate a song, she enters its name or the name of the recording artist on the search
page of the MusicShare program and clicks the "Find It" button. The Napster software then
searches the current directory and generates a list of files responsive to the search
request. To download a desired file, the user highlights it on the list and clicks the
"Get Selected Songs" button. The user may also view a list of files that exist on another
user's hard drive and select a file from that list. When the requesting user clicks on the
name of a file, the Napster server communicates with the requesting user's and host user's
n2 MusicShare browser software to facilitate a connection between the two users and
initiate the downloading of the file without any further action on either user's part.


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n2 Napster uses the term "host user" to refer to the user who makes the desired MP3 file available for downloading.

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According to Napster, when the requesting user clicks on the name of the desired MP3 file,
the Napster server routes this request to the host user's browser. The host user's browser
responds that it either can or cannot supply the file. If the host user can supply the
file, the Napster server communicates the host's address and routing information to the
requesting user's browser, allowing the requesting user to make a connection with the host
and receive the desired MP3 file. See Declaration of Edward Kessler ("Kessler Dec."), Exh.
B; Reply Declaration of Edward Kessler ("Kessler Reply Dec.") P 22. The parties disagree
about whether this process involves a hypertext link that the Napster server-side software
provides. Compare Pl. Br. at 9 with Def. Reply Br. at 10 n12. However, plaintiffs admit
that the Napster server gets the necessary IP address information from the host user,
enabling the requesting user to connect to the host. See Declaration of Daniel Farmer
("Farmer Dec.") P 17; Declaration of Russell J. Frackman ("Frackman Dec."), Exh. 1
(Kessler Dep.) at 103-05. The MP3 file is actually transmitted over the Internet, see,
e.g., Def. Reply Br. at 3, but [*6] the steps necessary to make that connection could not
take place without the Napster server.


The Napster system has other functions besides allowing users to search for, request, and
download MP3 files. For example, a requesting user can play a downloaded song using the
MusicShare software. Napster also hosts a chat room.


Napster has developed a policy that makes compliance with all copyright laws one of the
"terms of use" of its service and warns users that:


Napster will terminate the accounts of users who are repeat infringers of the copyrights,
or other intellectual property rights, of others. In addition, Napster reserves the right
to terminate the account of a user upon any single infringement of the rights of others in
conjunction with use of the Napster service.


Kessler Dec. P 19. However, the parties disagree over when this policy was instituted and
how effectively it bars infringers from using the Napster service. Napster claims that it
had a copyright compliance policy as early as October 1999, but admits that it did not
document or notify users of the existence of this policy until February 7, 2000.


LEGAL STANDARD

The court may grant summary [*7] adjudication of a particular claim or defense under the
same standards used to consider a summary judgment motion. See Fed. R. Civ. P. 56(a), (b);
Pacific Fruit Express Co. v. Akron, Canton & Youngstown R.R. Co., 524 F.2d 1025, 1029-30
(9th Cir. 1975). Summary judgment shall be granted when there is no genuine issue of
material fact and the movant is entitled to judgment as a matter of law. See Fed. R. Civ.
56(c).


The moving party bears the initial burden of identifying those portions of the record that
demonstrate the absence of a genuine issue of material fact. The burden then shifts to the
nonmoving party to "go beyond the pleadings, and by [its] own affidavits, or by the
'depositions, answers to interrogatories, or admissions on file,' designate 'specific
facts showing that there is a genuine issue for trial.'" Celotex Corp. v. Catrett, 477
U.S. 317, 324, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986) (citations omitted). A dispute
about a material fact is genuine "if the evidence is such that a reasonable jury could
return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). [*8] The moving party discharges its burden
by showing that the nonmoving party has not disclosed the existence of any "significant
probative evidence tending to support the complaint." First Nat'l Bank v. Cities Serv.
Co., 391 U.S. 253, 290, 20 L. Ed. 2d 569, 88 S. Ct. 1575 (1968). The court does not make
credibility determinations in considering a motion for summary judgment. See Anderson, 477
U.S. at 249. Rather, it views the inferences drawn from the facts in the light most
favorable to the party opposing the motion. See T.W. Elec. Serv., Inc. v. Pacific Elec.
Contractors Ass'n, 809 F.2d 626, 631 (9th Cir. 1987).


DISCUSSION

Section 512 of the DMCA addresses the liability of online service and Internet access
providers for copyright infringements occurring online. Subsection 512(a) exempts
qualifying service providers from monetary liability for direct, vicarious, and
contributory infringement and limits injunctive relief to the degree specified in
subparagraph 512(j)(1)(B). Interpretation of subsection 512(a), or indeed any of the
section 512 safe harbors, appears to be an issue of first impression. n3


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n3 In Universal City Studios, Inc. v. Reimerdes,82 F. Supp. 2d 211, 217 & n.17 (S.D.N.Y.
2000), one defendant sought protection under subsection 512(c). Although the court noted
in passing that the defendant offered no evidence that he was a service provider under
subsection 512(c), it held that he could not invoke the safe harbor because plaintiffs
claimed violations of 17 U.S.C. section 1201(a), which applies to circumvention products
and technologies, rather than copy right infringement.


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Napster claims that its business activities fall within the safe harbor provided by
subsection 512(a). This subsection limits liability "for infringement of copyright by
reason of the [service] provider's transmitting, routing, or providing connections for,
material through a system or network controlled or operated by or for the service
provider, or by reason of the intermediate and transient storage of that material in the
course of such transmitting, routing, or providing connections," if five conditions are
satisfied:


(1) the transmission of the material was initiated by or at the direction of a person other than the service provider;
(2) the transmission, routing, provision of connections, or storage is carried out through
an automatic technical process without selection of the material by the service provider;

(3) the service provider does not select the recipients of the material except as an
automatic response to the request of another person;

(4) no copy of the material made by the service provider in the course of such
intermediate or transient storage is maintained on the system or network in a manner
ordinarily accessible to anyone other than the anticipated [*10] recipients, and no such
copy is maintained on the system or network in a manner ordinarily accessible to such
anticipated recipients for a longer period than is reasonably necessary for the
transmission, routing, or provision of connections; and

(5) the material is transmitted through the system or network without modification of its content.

17 U.S.C. § 512(a).

Citing the "definitions" subsection of the statute, Napster argues that it is a "service
provider" for the purposes of the 512(a) safe harbor. See 17 U.S.C. § 512(k)(1)(A). n4
First, it claims to offer the "transmission, routing, or providing of connections for
digital online communications" by enabling the connection of users' hard-drives and the
transmission of MP3 files "directly from the Host hard drive and Napster browser through
the Internet to the user's Napster browser and hard drive." Def. Reply Br. at 3. Second,
Napster states that users choose the online communication points and the MP3 files to be
transmitted with no direction from Napster. Finally, the Napster system does not modify
the content of the transferred files. Defendant contends that, because [*11] it meets the
definition of "service provider," n5 it need only satisfy the five remaining requirements
of the safe harbor to prevail in its motion for summary adjudication.


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n4 Subparagraph 512(k)(1)(A provides:

As used in subsection (a), the term "service provider" means as entity offering the
transmission, routing, or providing of connections for digital online communications,
between or among points specified by a user, of material of the user's choosing, without
modification to the content of the material sent or received.


Subparagraph 512(k)(1)(B) states:

As used in this section, other than subsection (a), the term "service provider" means a
provider of online services or network access, or the operator of facilities therefor, and
includes an entity described in subparagraph (A).



n5 It is not entirely clear to the court that Napster qualifies under the narrower
subparagraph 512(k)(1)(A). However, plaintiffs appear to concede that Napster is a
"service provider" within the meaning of subparagraph 512(k)(1)(A), arguing instead that
Napster does not satisfy the additional limitations that the prefatory language of
subsection 512(a) imposes. The court assumes, but does not hold, that Napster is a
"service provider" under subparagraph 512(k)(1)(A).


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Defendant then seeks to show compliance with these requirements by arguing: (1) a Napster
user, and never Napster itself; initiates the transmission of MP3 files; (2) the
transmission occurs through an automatic, technical process without any editorial input
from Napster; (3) Napster does not choose the recipients of the MP3 files; (4) Napster
does not make a copy of the material during transmission; and (5) the content of the
material is not modified during transmission. Napster maintains that the 512(a) safe
harbor thus protects its core function--"transmitting, routing and providing connections
for sharing of the files its users choose." Def. Reply Br. at 2.


Plaintiffs disagree. They first argue that subsection 512(n) requires the court to analyze
each of Napster's functions independently and that not all of these functions fall under
the 512(a) safe harbor. In their view, Napster provides information location tools--such
as a search engine, directory, index, and links--that are covered by the more stringent
eligibility requirements of subsection 512(d), rather than subsection 512(a).


Plaintiffs also contend that Napster does not perform the function which the 512(a) safe
harbor [*13] protects because the infringing material is not transmitted or routed through
the Napster system, as required by subsection 512(a). They correctly note that the
definition of "service provider" under subparagraph 512(k)(1)(A) is not identical to the
prefatory language of subsection 512(a). The latter imposes the additional requirement
that transmitting, routing, or providing connections must occur "through the system or
network." Plaintiffs argue in the alternative that, if users' computers are part of the
Napster system, copies of MP3 files are stored on the system longer than reasonably
necessary for transmission, and thus subparagraph 512(a)(4) is not satisfied.


Finally, plaintiffs note that, under the general eligibility requirements established in
subsection 512(i), a service provider must have adopted, reasonably implemented, and
informed its users of a policy for terminating repeat infringers. Plaintiffs contend that
Napster only adopted its copyright compliance policy after the onset of this litigation
and even now does not discipline infringers in any meaningful way. Therefore, in
plaintiffs' view, Napster fails to satisfy the DMCA's threshold eligibility requirements
[*14] or show that the 512(a) safe harbor covers any of its functions.


I. Independent Analysis of Functions

Subsection 512(n) of the DMCA stares:

Subsections (a), (b,), (c), and (d) describe separate and distinct functions for purposes
of applying this section. Whether a service provider qualifies for the limitation on
liability in any one of those subsections shall be based solely on the criteria in that
subsection and shall not affect a determination of whether that service provider qualifies
for the limitations on liability under any other such subsections.


Citing subsection 512(n), plaintiffs argue that the 512(a) safe harbor does not offer
blanket protection to Napster's entire system. Plaintiffs consider the focus of the
litigation to be Napster's function as an information location tool--eligible for
protection, if at all, under the more rigorous subsection 512(d). They contend that the
system does not operate as a passive conduit within the meaning subsection 512(a). In this
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