Napster Case Study Using Irac

A&M Records, Inc. v. Napster, Inc.
CourtUnited States Court of Appeals for the Ninth Circuit
Full case nameA&M Records, Inc. v. Napster, Inc.
ArguedOctober 2 2000
DecidedFebruary 12 2001
Citation(s)239 F.3d 1004
Holding
Napster could be held liable for contributory and vicarious copyright infringement, affirming the District Court holding.
Court membership
Judge(s) sittingMary M. Schroeder, Richard Paez, Robert R. Beezer
Case opinions
MajorityRobert R. Beezer
Laws applied
17 U.S.C. § 501, 17 U.S.C. §106

A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (2001)[1] was a landmark intellectual property case in which the United States Court of Appeals for the Ninth Circuit affirmed the ruling of the United States District Court for the Northern District of California, holding that defendant, peer-to-peer (P2P) file-sharing service Napster, could be held liable for contributory infringement and vicarious infringement of the plaintiffs' copyrights. This was the first major case to address the application of copyright laws to peer-to-peer file-sharing.

Since the case is referred to as A&M Records, Inc. v. Napster, the full list of plaintiffs included a number of record companies, all members of the Recording Industry Association of America (RIAA).[2] The plaintiffs in the District Court suit were:[3]

  • A&M Records, a subsidiary of Universal Music Group
  • Geffen Records, a subsidiary of Universal Music Group
  • Interscope Records, a subsidiary of Universal Music Group
  • Sony Music Entertainment
  • MCA Records, a subsidiary of Universal Music Group
  • Atlantic Records, a subsidiary of Warner Music Group
  • Island Records, a subsidiary of Universal Music Group
  • Motown Records, a subsidiary of Universal Music Group
  • Capitol Records, a subsidiary of EMI
  • LaFace Records, a subsidiary of Sony Music Entertainment
  • BMG Music d/b/a The RCA Records Label, subsidiaries of Sony Music Entertainment
  • Universal Records, a subsidiary of Universal Music Group
  • Elektra Entertainment Group, a subsidiary of Warner Music Group
  • Arista Records, a subsidiary of Sony Music Entertainment
  • Sire Records Group, a subsidiary of Warner Music Group
  • Polygram Records, a subsidiary of Universal Music Group
  • Virgin Records America, a subsidiary of EMI
  • Warner Bros. Records, a subsidiary of Warner Music Group

Universal Music Group, Sony Music Entertainment, EMI, and Warner Music Group are known as the "big four" in the music industry.[4] Of this list, only A&M, Geffen, Interscope, Sony, MCA, Atlantic, Island, and Motown are listed as plaintiffs on the appeal. Additionally, American songwriters and producers Jerry Leiber and Mike Stoller are included on the Circuit Court appeal, representing the interests of "all others similarly situated."[1]

Defendant[edit]

Main article: Napster

Napster was started in 1999 by Shawn Fanning, then an 18-year-old freshmancomputer science student at Northeastern University.[5] It provided a platform for users to access and download compressed digital music files, specifically MP3s, from other users' machines. Unlike many peer-to-peer services, however, Napster included a central server that indexed connected users and files available on their machines, creating a searchable list of music available across Napster's network. Napster's ease of use compared to other peer-to-peer services quickly made it a popular service for music enthusiasts to find and download digital song files for free.[6]

Procedural background[edit]

Main article: A&M Records, Inc. v. Napster, Inc., 114 F.Supp.2d 896

Plaintiffs alleged both contributory and vicarious copyright infringement by Napster, and soon filed a motion for a preliminary injunction in order to stop the exchange of plaintiffs' songs on the service immediately.

Judge Marilyn Hall Patel of the United States District Court for the Northern District of California granted the preliminary injunction, on the grounds that the plaintiffs demonstrated a reasonable likelihood of success.[nb 1] She issued an injunction which preliminarily enjoined Napster

from engaging in, or facilitating others in copying, downloading, uploading, transmitting, or distributing plaintiffs' copyrighted musical compositions and sound recordings, protected by either federal or state law, without express permission of the rights owner.

Napster appealed to United States Court of Appeals for the Ninth Circuit.

Ninth Circuit appeal[edit]

On appeal, the Ninth Circuit ordered a stay of the District Court's injunction, pending resolution. The Ninth Circuit issued its opinion on February 12, 2001, affirming in part and reversing in part the District Court's decision.

Direct infringement[edit]

The Circuit Court agreed with the district court's threshold determination that Napster users were probably engaging in direct infringement of plaintiffs' copyrights.

Fair use defense[edit]

Turning to the question of fair use, the Circuit court agreed with the district court's "general analysis of Napster system uses" as well as with its analysis of the three "alleged fair uses identified by Napster" – which were "sampling, where users make temporary copies of a work before purchasing; space-shifting, where users access a sound recording through the Napster system that they already own in audio CD format; and permissive distribution of recordings by both new and established artists."

The court first considered these four factors on an abstract level of the system itself.

  1. They agreed with the District Court's finding that downloading an MP3 is not transformative under the purpose and character of use factor, and that even though Napster didn't directly benefit financially from users' downloads (i.e., charge for the service), "repeated and exploitative copying of copyrighted works, even if the copies are not offered for sale" could be considered a commercial use.
  2. The court also affirmed the district court's finding that creative works, such as the songs in question, are "closer to the core" of intended copyright protection" than non-creative works, thus favoring the plaintiffs on the second factor.
  3. They considered the potential that in some cases, wholesale copying of a work may be protected, noting time-shifting as an example.
  4. Finally, the Ninth Circuit agreed with the district court's finding that widespread wholesale transfer of plaintiff's music negatively affected the market for CD sales and that it also jeopardizes the record industry's future in digital markets.[1]

The court then turned to the three uses Napster identified as fair use in the conduct of its users:

  1. sampling, where users make temporary copies of a work to sample it before purchase, which the District Court found to be a commercial use even if a user purchases the work at a later time. Sampling was deemed to not be a fair use, because the "samples" were in fact permanent and complete copies of the desired media.
  2. space-shifting, where users access a sound recording through the Napster system that they already own in audio CD format; here the District Court found that neither of the shifting analyses used in the Sony or RIAA v. Diamond Multimedia[9] cases applied in this case because the "shifting" in neither case included or enabled distribution. The space-shifting argument did not succeed because, while the shift to a digital format may have been a personal storage use, it was accompanied by making the file available to the rest of the system's users.
  3. permissive distribution of recordings by both new and established artists who have authorized their music to be disseminated in the Napster system, which the District Court ruled was not an infringing use and could continue, along with chat rooms and other non-distributory features of Napster.

By contrast, the court found that the owners of Napster could control the infringing behavior of users, and therefore had a duty to do so. The Ninth Circuit affirmed this analysis, finding that the plaintiffs were likely to succeed in proving that Napster did not have a valid fair use defense.

Contributory infringement[edit]

In order to prove contributory infringement, a plaintiff must show that a defendant had knowledge of infringement (here, that Napster knew that its users were distributing copyrighted content without permission across its network) and that defendant supplied material support to that infringement.

Knowledge. The District Court ruled that the "law does not require knowledge of 'specific acts of infringement'"[1] and rejected Napster's assertion that, because they could not distinguish between infringing and non-infringing files, they did not have knowledge of copyright infringement. The Ninth Circuit upheld this analysis, accepting that Napster had "knowledge, both actual and constructive, of direct infringement."

The Ninth Circuit also held that Napster was not protected under Sony Corp. of America v. Universal City Studios, Inc., "the Betamax case", because of Napster's "actual, specific knowledge of direct infringement." "We are compelled to make a clear distinction between the architecture of the Napster system and Napster's conduct in relation to the operational capacity of the system."

  • First, the Ninth Circuit acknowledged that it could not impute sufficient knowledge to Napster "merely because peer-to-peer file sharing technology may be used to infringe plaintiffs' copyrights." Paraphrased Sony into its own words, the Ninth Circuit explained that if a defendant "made and sold equipment capable of both infringing and substantial noninfringing uses," that fact alone—i.e., "evidence that such machines could be and were used to infringe plaintiffs' copyrighted television shows" – would not be sufficient grounds to impute constructive knowledge to defendants.
  • The Court also assumed that Napster's software is "capable of commercially significant noninfringing uses." This analysis differed from the District Court's, which allowed "capable of" to be limited to the concrete uses that Napster alleged were actually underway.
  • Nevertheless, the Ninth Circuit found that, "Regardless of the number of Napster's infringing versus noninfringing uses", the question could be resolved on the basis of whether "Napster knew or had reason to know of its users' infringement of plaintiffs' copyrights."
  • Unlike Judge Patel, the Ninth Circuit accepted that Religious Technology Center v. Netcom might be relevant. Based on that case,

We agree that if a computer system operator learns of specific infringing material available on his system and fails to purge such material from the system, the operator knows of and contributes to direct infringement. ... Conversely, absent any specific information which identifies infringing activity, a computer system operator cannot be liable for contributory infringement merely because the structure of the system allows for the exchange of copyrighted material.

  • Applying this rule, the Ninth Circuit nevertheless concluded—in agreement with the district court—

that Napster has actual knowledge that specific infringing material is available using its system, that it could block access to the system by suppliers of the infringing material, and that it failed to remove the material.

Material contribution. The Ninth Circuit briefly approved the district court's analysis of this element.

Thus, the court affirmed the District Court ruling that the plaintiffs were likely to succeed on a claim of contributory infringement.

Vicarious infringement[edit]

Addressing the vicarious infringement claim, the court then considered the necessary factors: whether Napster benefited financially from the infringement and whether they were capable of supervising and controlling infringing conduct. The Ninth Circuit sided with the District Court, who held that the infringing activity was a draw to potential users and that, since Napster's future business model was predicated on expanding the number of users, Napster stood to benefit financially from the infringing activity. As for supervision, the Circuit court agreed in part with the District Court's finding that Napster had "the right and ability to supervise its users' conduct."[1] However, the Ninth Circuit felt that Napster's ability to patrol and enforce infringing use was limited by the design of the system itself. The system was not designed to read the contents of MP3s or check for copyright ownership or permissions, only to index by name and ensure they are valid MP3 files. Despite this departure from the District Court's reasoning, they argued that these indices and infringing files were just as searchable by Napster as they were by the plaintiffs in locating infringing files for evidence in the case. Because of Napster's failure to police within its means combined with the financial interest factor, the Ninth Circuit affirmed the District Court's finding of vicarious infringement.[1]

Other defenses[edit]

In its defense against the injunction, Napster also cited the Audio Home Recording Act (17 U.S.C. §§ 1001-10).[10] and the Digital Millennium Copyright Act's safe harbor clause (17 U.S.C. § 512).[11] The Ninth Circuit agreed with the District Court's finding that downloading MP3 files is not covered by the Audio Home Recording Act. The Ninth Circuit disagreed slightly with the District Court on the safe harbor issue, however, finding that the contributory infringement does not necessarily exclude a party from safe harbor protection. The court held that the safe harbor issue would be explored further at trial.[1]

Napster also argued that the record companies waived their rights to copyright protection because they "hastened" the spread of MP3s on the web and had their own plans to get into the digital market. Rejecting this argument, Judge Patel wrote, "This limited evidence fails to convince the court that the record companies created the monster that is now devouring their intellectual property rights."[3] The Ninth Circuit agreed, and also rejected Napster's claim that, by creating and providing digital files via the Internet, the plaintiffs had granted Napster an "implied license".[1] Finally, Napster argued that the plaintiffs were using copyright to control online distribution, which Napster considered beyond the scope of the limited monopoly provided by the Copyright Office. The court rejected this as well, finding that MP3s were the same works as those that appeared on CDs, just in a different format, thus the plaintiffs had every right to control their distribution of digital music files because they are the plaintiffs' copyrighted works.

Scope of the injunction[edit]

Napster contended that the injunction violated the company's First Amendment rights because it was overbroad. While the Ninth Circuit rejected this argument due to the lack of a fair use defense, they did order a stay of the injunction and agreed that the injunction was overbroad because "it places on Napster the entire burden of ensuring that no 'copying, downloading, uploading, transmitting, or distributing' of plaintiffs' works occur on the system."[1] Recognizing that Napster's system simply indexed files with imperfect file names and did not automatically verify copyright ownership, the court found that it was the plaintiffs' burden to notify Napster of any infringing files on the system, which Napster would then remove. But the court also again noted that Napster must police the system within its means: "In crafting the injunction on remand, the district court should recognize that Napster's system does not currently appear to allow Napster access to users' MP3 files."[1] The court also declined to adjust the bond amount and called imposition of a compulsory royalty scheme an "'easy out' for Napster" that would destroy the plaintiffs' ability to control their intellectual property.[1]

Criticism and Impact[edit]

Among a number of amicus briefs filed on behalf of both sides of the dispute, one particularly critical brief filed by a consortium of eighteen copyright law professors at United States universities argued that the District Court misread Sony and took too narrow a view of fair use. They wrote:

Napster is the best-known example of a new technology deploying what has come to be called peer-to-peer networking, a system in which individuals can search for and share files that reside on the hard drives of other personal computers connected to the Internet. Peer-to-peer file sharing allows individuals to bypass central providers of content and to find and exchange material with one another. The decentralized model of peer-to-peer networking poses a significant challenge to sectors of the entertainment and information businesses that follow a model of centralized control over content distribution. However, this is not the sort of challenge that copyright law is designed to redress. The district court’s ruling would ban a new technology in order to protect existing business models, and would invoke copyright to stifle innovation, not to promote it.[12]

The professors further argued that the overbroad nature of the injunction threatened the development and deployment of any future peer-to-peer file-sharing network on the Internet because it insisted on a restructuring that defeated peer-to-peer technology itself. They also argued that the finding of contributory liability was erroneous because of Napster's significant non-infringing uses and because not all unauthorized uses within the system were infringement. They concluded, "If Plaintiffs want copyright law extended to allow the suppression of new technologies, they must make their case to Congress."[12]

Napster struggled to comply with the demands of the rewritten injunction, and in April 2001 Judge Patel called their policing efforts "disgraceful." The company turned to digital fingerprinting to try to identify infringing files.[13] However, at a hearing on July 11, 2001, Judge Patel's dissatisfaction with Napster's 99.4% efficacy in removing infringing material prompted her to order the service shut down until it could be 100% effective.[14] In September 2001, Napster settled with songwriters and music publishers, agreeing to pay $26 million.[15] Napster filed for Chapter 11 bankruptcy in May 2002, and when a judge blocked its sale to Bertelsmann in September 2002, the first incarnation of Napster was finished.[16]

A number of file-sharing networks surfaced in Napster's wake, including Morpheus, Grokster, and KaZaA, many of which faced their own legal challenges over infringing material on the network.[17] In 2005, a similar file-sharing service, Grokster, was sued by MGM. The case, MGM Studios, Inc. v. Grokster, Ltd., went to the Supreme Court and is considered by many to be the sequel to the Napster case, another technology that "outpaced the law."[18] Over the next few years, BitTorrent, another P2P technology, became the target of copyright scrutiny. Popular torrent trackers like the Pirate Bay faced long legal battles,[19] but their opponents have had little success in shutting down these services permanently.

Notes[edit]

  1. ^She noted that the usual standard for preliminary injunction in the Ninth Circuit is generally a "sliding scale which requires a greater degree of harm the lesser the probability of success,"[7] but added that "In a copyright infringement case, demonstration of a reasonable likelihood of success on the merits creates a presumption of irreparable harm."[8]

References[edit]

External links[edit]

Text of A&M Records, Inc. v. Napster, Inc. is available from:  CourtListener  Findlaw  Justia  resource.org 

Further reading[edit]

  • Landes, William; Lichtman, Douglas (2003). "Indirect Liability for Copyright Infringement: Napster and Beyond". Journal of Economic Perspectives. 17 (2): 113–124. doi:10.1257/089533003765888467. 
  1. ^ abcdefghijkA&M Records, Inc. v. Napster, 239 F.3d 1004 (9th Cir. 2001)
  2. ^List of RIAA member organizations, RIAA.com
  3. ^ abA&M Records, Inc. et. al. v. Napster (No. C 99-5183 MHP No. C 00-0074 MHP), United States District Court for the Northern District of California, via CNET.com
  4. ^Linda Laban, Music Companies: The Big Four Labels, Spinner (Oct. 15, 2009).
  5. ^Spencer Ante, Shawn Fanning's Struggle, BusinessWeek (May 1, 2000).
  6. ^Janelle Brown, MP3 free-for-all, Salon (Feb 3, 2000).
  7. ^114 F. Supp. 2d 896 at 911(citing Prudential Real Estate Affiliates, Inc. v. PPR Realty, Inc.
  8. ^114 F. Supp. 2d 896 at 911
  9. ^RIAA v. Diamond Multimedia (No. 98-56727), United States District Court for the Central District of California via Harvard.
  10. ^United States Code Collection, 17 U.S.C. §§ 1001-10, Cornell University Law School.
  11. ^United States Code Collection, 17 U.S.C. § 512, Cornell University Law School.
  12. ^ abJessica Litman, et al., Brief Amicus Curiae of Copyright Law Professors in Support of Reversal, Consortium of 18 Copyright Law Professors (August 2000).
  13. ^Napster pins hopes on music fingerprints, BBC News (April 21, 2001).
  14. ^Matt Richtel, Napster Is Told to Remain Shut, New York Times (July 11, 2001).
  15. ^John Borland, Napster reaches settlement with publishers, CNET (Sept. 24, 2001).
  16. ^Benny Evangelista, Napster runs out of lives -- judge rules against sale, San Francisco Chronicle (Sept. 4, 2001).
  17. ^Brad King, Bracing for the Digital Crackdown, Wired (Aug. 22, 2002).
  18. ^Rod Smolla, You Say Napster, I Say Grokster, Slate (Dec. 14, 2004).
  19. ^Brian Heater, Pirate Bay Shutting Down; Are Torrents Dead?, PC Magazine (Nov. 17, 2009).

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NOS. 00-16401 & 00-16403

IN THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT



A&M RECORDS, INC., et al.

Plaintiffs-Appellants,

v.

NAPSTER, INC.,

Defendant-Appellant.



JERRY LEIBER, individually and d/b/a JERRY LEIBER MUSIC, et al.,

Plaintiffs-Appellants,

v.

NAPSTER, INC.,

Defendant-Appellant.



ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA



BRIEF FOR THE UNITED STATES AS AMICUS CURIAE


 

DAVID O. CARSON
  General Counsel

J. KENT DUNLAP

United States Copyright Office
Library of Congress
101 Independence Ave. S.E.
Washington, D.C. 20540

ALBIN F. DROST
  Acting General Counsel

JUSTIN HUGHES

United States Patent and Trademark Office
P.O. Box 15667
Arlington, VA 22215

Of Counsel

DAVID W. OGDEN
  Assistant Attorney General

MARK B. STERN
SCOTT R. McINTOSH
      Attorneys, Appellate Staff

Civil Division, Department of Justice
601 D Street N.W., Room 9550
Washington, D.C. 20520

     Counsel for the United States









TABLE OF CONTENTS


NOS. 00-16401 & 00-16403

IN THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT



A&M RECORDS, INC., et al.

Plaintiffs-Appellants,

v.

NAPSTER, INC.,

Defendant-Appellant.



JERRY LEIBER, individually and d/b/a JERRY LEIBER MUSIC, et al.,

Plaintiffs-Appellants,

v.

NAPSTER, INC.,

Defendant-Appellant.



ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA



BRIEF FOR THE UNITED STATES AS AMICUS CURIAE


The United States submits this brief as an amicus curiae, pursuant to 28 U.S.C. § 517 and Rule 29(a) of the Federal Rules of Appellate Procedure, to address the effect of the immunity provision of the Audio Home Recording Act of 1992, 17 U.S.C. § 1008.

STATEMENT OF INTEREST

The United States Copyright Office is charged by statute with the responsibility to provide Congress, federal agencies, and the courts with "information and assistance * * * on national and international issues relating to copyright * * * ." 17 U.S.C. § 701(b)(1)-(2). The United States Patent and Trademark Office is charged with advising the President and all federal agencies "on matters of intellectual property policy in the United States * * * ." 35 U.S.C. § 2(b). Consistent with these statutory provisions, the United States participates as an amicus curiae to provide courts with the views of the federal government, including the Copyright Office and the Patent and Trademark Office, regarding significant copyright and other intellectual property issues.

Although this case presents a number of important issues, one issue in particular implicates the roles of the Copyright Office and the Patent and Trademark Office -- the operation and effect of the Audio Home Recording Act of 1992 ("AHRA" or "Act"). The Copyright Office plays a central role in the administration of the Act. See 17 U.S.C. §§ 1003(b)-(c), 1005, 1007, 1009(e). Moreover, the Copyright Office and the Patent and Trademark Office provided Congress with advice and assistance during the legislative deliberations leading to the enactment of the Act. For these reasons, the United States believes that the government's views regarding the scope and application of the Act's immunity provision may assist the Court in the resolution of that issue.

STATEMENT OF ISSUES

Whether Section 1008 of the Audio Home Recording Act of 1992, 17 U.S.C. § 1008, excuses Napster from liability for copyright infringement.

STATEMENT OF THE CASE

A. The Audio Home Recording Act of 1992

The Audio Home Recording Act is Congress's response to a controversy between the music industry and the consumer electronics industry regarding the introduction of digital audio recording technology into the domestic consumer market. The Act represents an effort to resolve that controversy through a carefully developed and finely balanced legislative compromise. See generally H.R. Rep. No. 873(I), 102d Cong., 2d Sess. 11-13 (1992) ("House Report"), reprinted in 1992 U.S. Code Cong. & Admin. News ("USCCAN") 3581-3583; S. Rep. No. 294, 102d Cong., 2d Sess. 30-45 (1992) ("Senate Report").

Beginning in the 1980s, consumer electronics firms began to develop tape recorders and other consumer recording devices that employ digital audio recording technology. Unlike traditional analog recording technology, which results in perceptible differences between the source material and the copy, digital recording technology permits consumers to make copies of recorded music that are identical to the original recording. Moreover, a digital copy can itself be copied without any degradation of sound quality, opening the door to so-called "serial copying" -- making multiple generations of copies, each identical to the original source.

The capability of digital audio recording technology to produce perfect copies of recorded music made the technology attractive to the consumer electronics industry, which anticipated substantial consumer demand for tape recorders and other recording devices equipped with digital recording technology. However, the same capability was a source of concern to the music industry, which feared that the introduction of digital audio recording technology would lead to a vast expansion of "home taping" of copyrighted sound recordings and a corresponding loss of sales.

When digital audio recording technology first became available for the consumer market, the legality of home taping of copyrighted sound recordings was a subject of ongoing controversy between the music industry and the consumer electronics industry. See House Report at 11-12, reprinted in 1992 USCCAN at 3581-3582; Senate Report at 31. In Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417 (1984), the Supreme Court held that the use of VCR recording technology by consumers to make home copies of broadcast programs for viewing at another time ("time-shifting") constituted a non-infringing "fair use" of the copyrighted material. The consumer electronics industry, together with consumer groups, argued that Sony recognized a general right to engage in home taping of copyrighted materials for personal use; the music industry argued that Sony was decided on narrow grounds and did not give the Court's general imprimatur to home taping.

In 1990, music publishers and songwriters filed a class action suit for copyright infringement against Sony Corporation, which had begun to market DAT (Digital Audio Tape) recorders. During the course of the litigation, negotiations were undertaken to develop a general non-judicial solution to the digital audio recording controversy. The recording industry, recording artists, songwriters, music publishers, the consumer electronics industry, and consumer groups all participated in the negotiations. Senate Report at 33 & n. 16.

The negotiations culminated in 1991 in a compromise agreement among the interested parties, which was presented to Congress as the basis for legislation. The AHRA embodies the essential terms of that compromise. See House Report at 13, reprinted in 1992 USCCAN at 3583; Senate Report at 33-34. The compromise involves a basic quid pro quo between the music industry on the one hand and the consumer electronics industry and consumers on the other.

The AHRA provides the music industry with two principal benefits relating to digital audio recording technology. First, the Act requires manufacturers of "digital audio recording devices" to incorporate circuitry that prevents serial copying. 17 U.S.C. §§ 1001(11), 1002. Second, the Act requires manufacturers of "digital audio recording devices" and "digital audio recording media" to pay prescribed royalties into a fund that is distributed to copyright holders. Id. §§ 1003-1007. The royalty payment system is administered by the Copyright Office. Id. §§ 1005, 1007.

In exchange for these benefits, the AHRA provides manufacturers and consumers with prescribed statutory immunity from suits for copyright infringement. This immunity is contained in Section 1008 of the Act, 17 U.S.C. § 1008, which provides:

No action may be brought under this title alleging infringement of copyright [1] based on the manufacture, importation, or distribution of a digital audio recording device, a digital audio recording medium, an analog recording device, or an analog recording medium, or [2] based on the noncommercial use by a consumer of such a device or medium for making digital musical recordings or analog musical recordings.

By its terms, Section 1008 disallows two kinds of actions for copyright infringement. The first are actions "based on the manufacture, importation, or distribution" of the specified recording devices and recording media. The second are actions "based on the noncommercial use by a consumer of such a device or medium for making digital musical recordings or analog musical recordings." Section 1008 bars any action for copyright infringement "under this title" -- Title 17 of the United States Code -- based on these activities.

B. The Present Litigation

In December 1999, the plaintiffs brought this action for copyright infringement against Napster in the Northern District of California. Napster is a centralized service that greatly simplifies and expands the ability of Internet users to copy MP3 music files from other persons' computers. It does so by providing a "virtual meeting place" where an individual user of the Napster system can find MP3 music files on the hard drive of other computers participating, at that moment, in the Napster "community." Napster then facilities the direct "peer-to-peer" copying and transfer of those files.

In general terms, the plaintiffs asserted that consumers who use Napster's Internet- based service and software to exchange sound files containing copyrighted musical recordings are engaged in copyright infringement and that Napster is liable for contributory infringement and vicarious infringement.

Napster denied that its users are engaged in infringement or that its own actions make it liable for contributory or vicarious infringement. In addition, Napster asserted a number of affirmative defenses. Among those is a defense based on Section 1008 of the AHRA. Napster argued that the activities of its users are immunized by Section 1008 and that, as a consequence, Napster itself cannot be held liable for contributory or vicarious infringement.

On July 26, 2000, the district court issued an opinion and order granting a preliminary injunction against Napster. The district court concluded, inter alia, that Napster's users are engaged in extensive copyright infringement and that Napster is contributorily and vicariously liable for their actions. The district court dismissed Section 1008 as "irrelevant to the instant action" because the plaintiffs were not seeking relief under the AHRA. ER 04266 (Opinion p. 42 n.19).

SUMMARY OF ARGUMENT

Section 1008 of the Audio Home Recording Act does not protect Napster from the plaintiffs' claims of copyright infringement. Section 1008 was adopted to address a very different phenomenon -- the noncommercial consumer use of digital audio recording devices, such as DAT tape decks, to perform "home taping" of musical recordings. Napster's effort to bring itself within the ambit of Section 1008 flouts the terms of the statute and conflicts with the basic policies of the Act.

1. Section 1008 prohibits actions for copyright infringement based on: (1) the manufacture, importation, or distribution of "a digital audio recording device, a digital audio recording medium, an analog recording device, or an analog recording medium"; or (2) "the noncommercial use by a consumer of such a device or medium for making digital musical recordings or analog musical recordings." Although Napster insists that the activities of its users are protected by Section 1008, and that it therefore cannot be held accountable for contributory or vicarious infringement based on those activities, Napster's defense cannot possibly be squared with the actual terms of Section 1008.

First, it is undisputed that Napster's users are not using any "device" or "medium" specified in Section 1008, and Section 1008 applies only to consumer use of "such a device or medium." Second, when Napster's users create and store copies of music files on their computers' hard disks, they are not making "digital musical recordings or analog musical recordings" as those terms are defined in the Act. Third, Napster's users are engaged not only in copying musical recordings, but also in distributing such recordings to the public, and Section 1008 immunizes only noncommercial copying ("noncommercial use * * * for making digital musical recordings or analog musical recordings"), not public distribution. Fourth, unlike such copyright provisions as the fair use provision (17 U.S.C. § 107), Section 1008 does not designate any use of copyrighted works as non-infringing; it merely bars "action[s] * * * alleging infringement" based on such uses. Assuming arguendo that Napster's users are otherwise engaged in acts of copyright infringement, nothing in Section 1008 purports to render those actions non- infringing, and hence the claims against Napster for contributory and vicarious infringement would remain unaffected even if Section 1008 did apply to Napster's users.

2. The AHRA was intended by Congress to embody a compromise between the music industry on the one hand and the consumer electronics industry and consumer groups on the other. At the heart of that compromise is a quid pro quo: in exchange for allowing noncommercial consumer use of digital audio recording technology (Section 1008), the music industry receives financial compensation (Sections 1003-1007) and protection against serial copying (Section 1002). Permitting Napster to shelter itself behind Section 1008 would defeat this basic statutory quid pro quo: Napster's users would be permitted to engage in digital copying and public distribution of copyrighted works on a scale beggaring anything Congress could have imagined when it enacted the Act, yet the music industry would receive nothing in return because the products used by Napster and its users (computers and hard drives) are unquestionably not subject to the Act's royalty and serial copying provisions.

Napster asserts that, despite the precision of the language in Section 1008, Congress actually meant to provide immunity for all noncommercial consumer copying of music in digital or analog form, whether or not the copying fits within the terms of Section 1008. Nothing in the legislative history of the Act supports that argument.

And nothing in RIAA v. Diamond Multimedia Systems Inc., 180 F.3d 1072 (9th Cir. 1999), the decision on which Napster places principal reliance, supports the argument either. Section 1008 was not at issue in Diamond Multimedia, and nowhere does the case hold that Section 1008 provides the kind of omnibus immunity for digital copying that Napster invokes here.

ARGUMENT

SECTION 1008 OF THE AUDIO HOME RECORDING ACT OF 1992 DOES NOT EXCUSE NAPSTER FROM LIABILITY FOR COPYRIGHT INFRINGEMENT

Napster asserts that Section 1008 of the Audio Home Recording Act provides its users with immunity from liability for copyright infringement and, in so doing, relieves Napster itself from any derivative liability for contributory or vicarious infringement. The district court was correct to reject that defense. Napster's invocation of Section 1008 is flatly inconsistent with the terms of the statute and the legislative policies that underlie the AHRA. Accordingly, if Napster is otherwise liable under the copyright laws, Section 1008 does not relieve Napster of liability. 1


1This brief does not address or express a view regarding any issue in this case other than the AHRA issue. For purposes of addressing the AHRA issue, the United States assumes that the plaintiffs have made out an otherwise valid claim for contributory and/or vicarious copyright infringement against Napster based on the use of Napster's service and software by consumers to exchange computer files containing copyrighted musical works.

We note that one of the amici participating in this appeal is a former Register of Copyrights, Ralph Oman. As a former Register, Mr. Oman speaks for himself and his client rather than the Copyright Office.


A. Napster's Immunity Defense Is Foreclosed by the Plain Language of Section 1008

"The 'starting point for interpreting a statute is the language of the statute itself. '"Exxon Mobil Corp. v. United States Environmental Protection Agency, 217 F.3d 1246, 1249 (9th Cir. 2000) (quoting Consumer Product Safety Commission v. GTE Sylvania, Inc., 447 U.S. 102, 108 (1980)). Napster's discussion of Section 1008 is notably selective about following this rule. Napster correctly points out that the introductory language of Section 1008 -- "[n]o action may be brought under this title alleging infringement of copyright" -- makes Section 1008 potentially applicable to any infringement action under Title 17, not just an action under the AHRA itself. But Napster conspicuously fails to address the remaining language of Section 1008, and makes no effort to explain how that language can be read to protect Napster's users or Napster itself.

Napster's reluctance to come to grips with the statutory language is understandable, because the activities of Napster's users do not even arguably come within the terms of the statute. Not only does the language of Section 1008 foreclose Napster's immunity defense, but it does so in four separate and independent ways. Napster's argument thus depends on a wholesale disregard of what Section 1008 actually says.

1. Napster's Users Are Not Using Any of the "Devices" or "Media" Covered by Section 1008

Section 1008 identifies four specific kinds of products whose manufacture, distribution, and noncommercial use Congress wished to shield from actions for copyright infringement. Those products are "[1] a digital audio recording device, [2] a digital audio recording medium, [3] an analog recording device, or [4] an analog recording medium." 17 U.S.C. § 1008. Section 1008 prohibits actions for copyright infringement based on "the manufacture, importation, or distribution" of these four types of devices and media. Section 1008 also prohibits actions for copyright infringement based on "the noncommercial use by a consumer of such a device or medium" for making digital or analog musical recordings.

Nothing in the language of Section 1008 purports to grant manufacturers, distributors, or consumers any immunity with respect to products other than the devices and media specified in Section 1008 itself. To the contrary, if an action for infringement does not involve the specified devices or media, it falls outside the scope of Section 1008 altogether. By its terms, Section 1008 protects consumers only from infringement actions that are based on "noncommercial use * * * of such a device or medium" (emphasis added). If an infringement action rests on consumer use of other products, Section 1008 on its face has no applicability to such an action.

In this case, the plaintiffs' copyright claims are not based on the use of any of the devices or media covered by the terms of Section 1008. Napster's users exchange music by using personal computers to locate and transfer files from one computer hard disk to another. Neither a personal computer nor its hard disk constitutes "a digital audio recording device, a digital audio recording medium, an analog recording device, or an analog recording medium." Napster itself does not suggest otherwise.

The terms "digital audio recording device" and "digital audio recording medium" are specifically defined in the Act. A "digital audio recording device" is defined, with exceptions not relevant here, as any machine or device "the digital recording function of which is designed or marketed for the primary purpose of, and that is capable of, making a digital audio copied recording for private use." 17 U.S.C. § 1001(3) (emphasis added). A "digital audio recording medium" is defined (again with inapplicable exceptions) as "any material object * * * that is primarily marketed or most commonly used by consumers for the purpose of making digital audio copied recordings by use of a digital audio recording device." Id. § 1001(4)(A) (emphasis added).

This Court has already held that the statutory definition of "digital audio recording device" does not reach personal computers and their hard drives. RIAA v. Diamond Multimedia Systems Inc., 180 F.3d 1072, 1078 (9th Cir. 1999). Although personal computers are "capable of" making "digital audio copied recordings," neither they nor their hard drives are "designed or marketed for the primary purpose of" making such recordings. Ibid. For similar reasons, hard drives fall outside the statutory definition of "digital audio recording medium," since they are not "primarily marketed or most commonly used * * * for the purpose of" making such recordings.

Unlike "digital audio recording device" and "digital audio recording medium," the terms "analog recording device" and "analog recording medium" are not expressly defined in the Act. Congress presumably had in mind the analog counterparts to digital audio recording devices and media -- for example, traditional analog tape decks and analog recording tapes. Whatever the precise scope of these terms, however, they cannot encompass personal computers and their hard drives, because computers process and store information in digital rather than analog form. Thus, Napster users are not even arguably using any of the devices and media referred to in Section 1008.

2. Napster's Users Are Not Making "Digital Musical Recordings" Or "Analog Musical Recordings"

Section 1008 protects the noncommercial consumer use of digital and analog recording devices and media for making "digital musical recordings or analog musical recordings." 17 U.S.C. § 1008. Even if Napster's users were using the specified devices or media, they are not making "digital musical recordings" or "analog musical recordings." Their activities fall outside the scope of Section 1008 for that reason as well.

The Act defines a "digital musical recording" as "a material object * * * in which are fixed, in a digital recording format, only sounds, and material, statements, or instructions incidental to those fixed sounds, if any * * * ." 17 U.S.C. § 1001(5)(A)(i) (emphasis added). The definition goes on to exclude, among other things, "a material object * * * in which one or more computer programs are fixed * * * ." Id. § 1001(5)(B)(ii).

Napster's users copy music files to their computers' hard drives. Hard drives store data of all kinds, from word processing files to multimedia files, and they ordinarily store computer programs as well. As a result, hard drives fall outside the statutory definition of "digital musical recording" in two respects: first, they are not objects in which "only sounds" are "fixed," and second, they are objects in which "one or more computer programs are fixed." See Diamond Multimedia, 180 F.3d at 1076 ("a hard drive is a material object in which one or more programs are fixed; thus, a hard drive is excluded from the definition of digital musical recordings").

Unlike "digital musical recording," "analog musical recording" is not a defined term under the Act. However, just as a computer's hard drive cannot be an "analog recording medium" (see p. 15 supra), neither can it be (or be used to store) an "analog musical recording," because hard drives store data in digital rather than analog form. Thus, Napster's users cannot be claimed to be making either "digital musical recordings" or "analog musical recordings" -- and if a consumer is not making a digital or analog musical recording, the terms of Section 1008 do not provide him with any immunity.

3. Section 1008 Provides Immunity Only for Noncommercial Copying, Not for Public Distribution

The Copyright Act grants the owner of a copyright a number of distinct legal rights. See 17 U.S.C. § 106(1)-(5). The most widely known right is the right of reproduction -- the "exclusive right * * * to reproduce the copyrighted work in copies or phonorecords." Id. § 106(1). However, the Copyright Act also grants the copyright holder a separate and distinct right of public distribution -- the "exclusive right * * * to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending." Id. § 106(3).

The plaintiffs assert not only infringements on the right of reproduction, but also infringements on the right of public distribution. In the proceedings below, Napster stated that it has at least 20 million users, all of whom are able to use Napster's service to access and download music files containing copyrighted sound recordings. When a Napster user makes the music files on his or her hard drive available for downloading by other Napster users, he or she is distributing the files to the public at large. Cf. Michaels v. Internet Entertainment Group, Inc., 5 F. Supp. 2d 823, 830-31 (C.D. Cal. 1998); Playboy Enterprises, Inc. v. Webbworld, Inc., 991 F. Supp. 543, 551 (N.D. Tex. 1997), aff'd mem., 168 F.3d 486 (5th Cir. 1999); Marobie-Fl, Inc. v. Nat'l Ass'n of Fire and Equip. Distributors and Northwest Nexus, Inc., 983 F.Supp. 1167, 1173 (N.D. Ill. 1997).

To the extent that Napster users are engaged in the distribution of copyrighted works to the public at large, such activity falls outside the scope of Section 1008. The language of Section 1008 is directed at uses that infringe on the right of reproduction, not at uses that infringe on the right of public distribution. By its terms, Section 1008 only bars infringement actions "based on the noncommercial use" of the specified products "for making digital musical recordings or analog musical recordings" -- in other words, for making copies of the music. Section 1008 makes no reference, and provides no possible defense, to infringement claims based on the public distribution of copied works. Thus, even if it were proper to treat the use of Napster's service for the public dissemination of copyrighted music as a "noncommercial" consumer use, which is far from clear, it is not the use at which the terms of Section 1008 are directed -- the "making [of] digital musical recordings or analog musical recordings." 2

4. Section 1008 Does Not Transform Infringing Consumer Uses Into NonInfringing Ones

As the foregoing discussion shows, the language of Section 1008 cannot be read to encompass the activities of Napster's users. But even if Section 1008 did apply to Napster's users, it would not provide Napster itself with a defense to liability for contributory or vicarious infringement. That is because the terms of Section 1008 address only whether consumers can be sued for infringement; nothing in Section 1008 addresses or changes whether they are engaged in infringement.


2 We should not be understood to suggest that every distribution of a copyrighted work, regardless of its scope or attendant circumstances, is necessarily an infringement of the statutory right of distribution. The right of distribution conferred by 17 U.S.C. § 106(3) is a right of public distribution -- the right "to distribute copies or phonorecords of the copyrighted work to the public" (emphasis added). See 2 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 8.11[A] (1999).


When Congress has chosen to make particular uses of copyrighted works noninfringing, it traditionally has said so expressly. For example, the fair use provision of the Copyright Act provides that "the fair use of a copyrighted work * * * is not an infringement of copyright." 17 U.S.C. § 107 (emphasis added). Congress has spoken with equal clarity regarding other uses. See, e.g., id. § 108 ("it is not an infringement of copyright" for library or archive to reproduce single copies of works under specified conditions); id. § 110 (specified performances and displays of works "are not infringements of copyright"); id. § 117 ("it is not an infringement" for owner of copy of computer program to make an additional copy for, inter alia, archival purposes).

In contrast, Section 1008 of the AHRA conspicuously does not say that the activities it describes "are not an infringement of copyright." Instead, Section 1008 provides only that "[n]o action may be brought under this title alleging infringement of copyright" based on such activities. The legislative record indicates that this language reflects a deliberate decision by Congress to relieve consumers from the threat of copyright liability without altering the underlying contours of the copyright laws or resolving the legal debate over the legality of home taping. In the words of the Senate Report:

[S]ection 1002 [now Section 1008] provides only that certain copyright infringement actions are precluded. The section does not purport to resolve, nor does it resolve, whether the underlying conduct is or is not infringement. The committee intends the immunity from lawsuits to provide full protection against the specified types of copyright infringement actions, but it has not addressed the underlying copyright infringement issue * * * .

Senate Report at 52 (emphasis added).

Thus, assuming for present purposes that Napster's users are engaged in copyright infringement, their actions would remain infringing even if Section 1008 were applicable to them, since Section 1008 does not purport to address the underlying issue of infringement. And if Section 1008 does not transform the actions of Napster's users into non-infringing uses, then it cannot provide shelter to Napster itself. In invoking Section 1008, Napster has argued that it cannot be liable for contributory or vicarious infringement if its users are not themselves engaged in infringement. Once it is recognized that Section 1008 does not alter whether the consumer uses that it addresses are infringing, Napster's argument falls apart.

It is noteworthy in this regard that Section 1008 expressly provides immunity not only for the specified noncommercial consumer use of digital and analog recording devices and media, but also for the manufacture and distribution of such products. Napster's argument assumes that the immunity conferred on consumers is sufficient by itself to preclude liability for contributory or vicarious infringement on the part of the firms whose products are being used. But if that were the case, then there would have been no reason for Congress to include distinct immunity protection for manufacturers in Section 1008 itself, and the manufacturer immunity language in Section 1008 would serve no purpose. Napster's argument thus conflicts with the elementary principle that "legislative enactments should not be construed to render their provisions mere surplusage." Dunn v. CFTC, 519 U.S. 465, 472 (1997). The fact that Congress found it necessary to extend an express statutory grant of immunity to manufacturers, as well as to consumers, confirms that Congress did not regard consumer immunity from suit as sufficient by itself to insulate other parties from liability for contributory or vicarious infringement.

B. Napster's Reliance on Section 1008 Is Inconsistent With the Policies Underlying the AHRA

In Diamond Multimedia, this Court observed that it "need not resort to the legislative history [when] the statutory language is clear." 180 F.3d at 1076. Given the clarity with which the language of Section 1008 prescribes (and circumscribes) the scope of statutory immunity under the AHRA, and given Napster's manifest inability to bring this case within the language of the statute, resort to the legislative history of the AHRA is therefore unnecessary. Nevertheless, if recourse is had to the legislative history, it reinforces the conclusion that Section 1008 does not protect Napster. Far from advancing the policies of the AHRA, Napster's invocation of Section 1008 is directly contrary to those policies.

1. Napster's Invocation of Section 1008 Upsets the Quid Pro Quo That Underlies the Act

The legislative history of the AHRA makes clear that the Act was intended by Congress to embody the compromise agreement reached in 1991 between the music industry on the one hand and the consumer electronics industry and consumer groups on the other. See, e.g., Senate Report at 34 (" the competing parties have, through negotiation and compromise, reached an agreement which all parties involved feel is equitable," and the legislation "reflects this agreement"); House Report at 13, reprinted in 1992 USCCAN at 3583 (the Act "preserves the essentials of the agreement").

As explained above, the compromise underlying the Act involves a basic quid pro quo. In exchange for accepting the marketing of digital audio recording technology and the use of such technology for noncommercial home taping, the music industry receives financial compensation (through the Act's royalty system) and protection against serial copying. This quid pro quo was central to the agreement and the legislation that embodies it. See, e.g., Senate Report at 30 (summarizing the purpose and basic elements of the legislation). 3

Construing Section 1008 to protect Napster would mean repudiating, rather than preserving, the quid pro quo underlying the Act. On the one hand, Napster would be permitted to facilitate the copying and distribution of copyrighted sound recordings on a scale far surpassing the "home taping" that Congress foresaw when it enacted the AHRA. On the other hand, the products employed by Napster and its users -- computers and their hard drives -- are not subject to royalty payments (by Napster or anyone else) and are not required to be equipped with anti-serial copying circuitry, because the royalty and serial copying provisions of the Act apply only to "digital audio recording devices" and "digital audio recording media," and as shown above, those terms exclude computers and hard drives. 17 U.S.C. §§ 1002(a), 1003(a), 1004; see p. 15 supra. As a result, the music industry would bear the burdens of the statute without receiving the corresponding benefits.


3As noted above, unlike digital audio recording technology, analog recording technology has inherent limitations that make it substantially less useful for copying in general and serial copying in particular. For that reason, the Act does not require manufacturers of analog recording devices and media to make royalty payments or incorporate anti-serial copying circuitry. The exclusion of analog recording devices and media from the royalty and serial copying requirements of the Act does not mean that the statute is not predicated in a quid pro quo. Instead, it simply means that the rationale for the quid pro quo is not implicated by analog taping.


The legislative history makes clear that the Act's exclusion of computers and hard drives was the product of a deliberate choice by Congress. See, e.g., Senate Report at 48 ("a personal computer whose recording function is designed and marketed primarily for the recording of data and computer programs * * * would [not] qualify as a 'digital audio recording device'"). In invoking Section 1008, Napster is inviting this Court to countermand that legislative choice, and to do so in a way that undoes the reciprocal nature of the Act's digital recording provisions. That invitation should be declined.

2. Section 1008 Was Not Intended To Immunize All Consumer Copying of Musical Recordings

Section 1008 identifies with precision the consumer activity that Congress meant to shelter from copyright infringement suits: "the noncommercial use by a consumer of such a device or medium for making digital musical recordings or analog musical recordings." 17 U.S.C. § 1008. Despite the precision of this language, Napster asserts that Congress actually intended to immunize "all noncommercial consumer copying of music in digital or analog form" (Napster Brief at 20), whether or not the copying comes within the terms of Section 1008. But Napster has identified nothing in the limited legislative history of Section 1008 that supports this argument or overcomes the explicit language of the statute.

The following passage from the House Report on the Act is representative of the legislative history regarding Section 1008:

Section 1008 covers one of the critical components of the legislation: exemptions from liability for suit under title 17 for home taping of copyrighted musical works and sound recordings, and for contributory infringement actions under title 17 against manufacturers, importers, and distributors of digital and analog recording devices and recording media. In the case of home taping, the exemption protects all noncommercial copying by consumers of digital and analog musical recordings. Manufacturers, importers, and distributors of digital and analog recording devices and media have a complete exemption from copyright infringement claims based on the manufacture, importation, or distribution of such devices.

House Report at 24, reprinted in 1992 USCCAN at 3594 (emphasis added).

The highlighted references to "home taping" suggest, not surprisingly, that Congress meant to address the problem that gave rise to the AHRA -- the introduction and use of DAT tape decks and similar digital taping technology (see pp. 3-5 supra). There is no indication that Congress also meant to cover other kinds of devices and media that fall outside the terms of Section 1008. To the contrary, the legislative history reiterates the message conveyed by the language of the statute itself: Congress meant to "extend[] protection to users of such audio recording devices and media by prohibiting copyright infringement actions based on the use of such devices and media" to make musical recordings. Senate Report at 51 (emphasis added). In short, the legislative history confirms that Congress meant what it said in Section 1008 -- and what Congress said cannot be reconciled with what Napster is seeking.

3. The Legislative History of Statutes Other Than the AHRA is Irrelevant

In construing the scope of Section 1008, Napster attempts to rely on the legislative history of two statutes other than the AHRA -- the Record Rental Amendment Act of 1984 and the Computer Software Rental Amendment Act of 1990. See Napster Brief at 23-24. Napster argues that Congress's treatment of "commercial" lending of phonorecords and computer software under those two statutes is consistent with Napster's reading of Section 1008. The short answer is that this case involves the meaning of the AHRA, not the meaning of other statutes. Napster's invocation of Section 1008 cannot be sustained on the basis of Section 1008's own language and legislative history; a fortiori, it cannot be sustained by resort to the language and legislative history of unrelated statutes. The Record Rental Amendment Act and the Computer Software Rental Amendment Act were both enacted prior to the AHRA, and they address entirely different subjects. Neither their language nor their legislative history purports to address the meaning of Section 1008 in any way.

C. Diamond Multimedia Does Not Resolve the AHRA Immunity Question At Issue in This Case

Napster suggests that this Court's decision in Diamond Multimedia confirms Napster's reading of Section 1008. It does not. The meaning and applicability of Section 1008 were not at issue in Diamond Multimedia, and nothing that the Court decided in Diamond Multimedia in any way requires the Court to accept Napster's Section 1008 defense in this case.

Diamond Multimedia involved a suit under the AHRA by the recording industry against the manufacturer of the Rio portable music player, a "Walkman-like" device that plays MP3 music files. The recording industry claimed that the Rio player is a "digital audio recording device" and therefore is subject to the Act's royalty and serial copying provisions. Based on that claim, the recording industry sought to enjoin the manufacture and distribution of the Rio player and to compel Rio's manufacturer (Diamond) to make royalty payments under the Act. This Court rejected the industry claim, holding that the Rio player does not come within the Act's definition of a "digital audio recording device" and therefore is not subject to the Act's royalty and serial copying requirements. 180 F.3d at 1075-1081.

Diamond Multimedia was not an action for copyright infringement. Because Section 1008 of the AHRA applies only to "action[s] * * * under this title alleging infringement of copyright," it was facially irrelevant to Diamond's liability, and Diamond never invoked Section 1008 as a defense. Accordingly, the Court was not called on to decide whether Section 1008 protected Diamond itself, much less whether or how Section 1008 may protect defendants in other cases that (unlike Diamond Multimedia) involve claims of copyright infringement.

Napster relies on a single passage from the Court's opinion in Diamond Multimedia:

As the Senate Report explains, "[t] he purpose of [the Act] is to ensure the right of consumers to make analog or digital audio recordings of copyrighted music for their private, noncommercial use." S. Rep. 102-294, at *86 (emphasis added). The Act does so through its home taping exemption, see 17 U.S.C. § 1008, which "protects all noncommercial copying by consumers of digital and analog musical recordings," H.R. Rep. 102-873(I), at *59.

180 F.3d at 1079 (emphasis in original).

To the extent that this passage speaks to the meaning of Section 1008, it is no more than dictum, since Section 1008 was not at issue in the case. In any event, nothing in the passage is in any way inconsistent with the proposition that Section 1008 means what it says. The passage merely quotes excerpts from the House and Senate Reports regarding the purpose of the Act in general and Section 1008 in particular. As shown above, when the legislative history is considered in its entirety, it directly supports, rather than refutes, the conclusion that Section 1008 does not protect Napster or its users. Accordingly, nothing in Diamond Multimedia provides refuge for Napster in this case.

CONCLUSION

For the foregoing reasons, the district court's holding that Section 1008 of the Audio Home Recording Act does not excuse Napster from liability is correct and should be affirmed.

Respectfully submitted,

DAVID O. CARSON
  General Counsel

J. KENT DUNLAP

United States Copyright Office
Library of Congress
101 Independence Ave. S.E.
Washington, D.C. 20540

ALBIN F. DROST
  Acting General Counsel

JUSTIN HUGHES

United States Patent and Trademark Office
P.O. Box 15667
Arlington, VA 22215

Of Counsel

DAVID W. OGDEN
       Assistant Attorney General

MARK B. STERN
SCOTT R. McINTOSH
  Attorneys, Appellate Staff

Civil Division, Department of Justice
601 D Street N.W., Room 9550
Washington, D.C. 20520

Counsel for the United States









September 8, 2000

 

CERTIFICATE OF COMPLIANCE

Pursuant to Fed. R. App. P. 29(d) and Ninth Circuit Rule 32-1, I certify that the attached amicus brief is proportionately spaced, has a typeface of 14 points or more and contains 7000 words or less.

________________________

Scott R. McIntosh

CERTIFICATE OF SERVICE

I certify that on September 8, 2000, I filed and served the foregoing BRIEF FOR THE UNITED STATES AS AMICUS CURIAE by causing an original and 15 copies to be filed with the Clerk of the Court by overnight mail and by causing copies to be served on the following counsel by overnight mail and (where indicated) by fax:

Carey R. Ramos
Aidan Synnott
Michael Keats
Paul Weiss Rifkind Wharton & Garrison
1285 Avenue of the Americas
New York, NY 10019-6064
(212) 373-3000
(OVERNIGHT MAIL AND FAX)

Russell J. Frackman
Jeffrey D. Goldman
George M. Borkowski
Drew E. Breuder
Mitchell Silberberg & Knupp
11377 W Olympic Blvd
Los Angeles, CA 90064
(310) 312-2000
(OVERNIGHT MAIL AND FAX)

William M. Hart
Eric J. German
Frank P. Schibilia
Carla M. Miller
Hank L. Goldsmith
Leon P. Gold
Lawrence L. Weinstein
Proskauer Rose LLP
1585 Broadway
New York, NY 10036
(212) 969-3000

Hadrian R. Katz
(202) 942-5000
Arnold & Porter
555 Twelfth Street, NW
Washington, DC 20004

Steven B. Fabrizio
1330 Connecticut Avenue, N.W.
Suite 300
Washington, DC 20036
202-775-0101

Lisa M. Arent
Melinda M. Morton
Michael A. Brille
Samuel A. Kaplan
William Jackson
Seth A. Goldberg
Fenwick & West LLP
Two Palo Alto Sq Ste 800
Palo Alto, CA 94306
650-494-0600
(BY OVERNIGHT MAIL AND FAX)

Laurence F. Pulgram
Kathryn J. Fritz
Fenwick & West LLP
275 Battery Street
15th Floor
San Francisco, CA 94111
415-875-2300
(BY OVERNIGHT MAIL AND FAX)

David Boies
Boies Schiller & Flexner LLP
80 Business Park Drive
Suite 110
Armonk, NY 10504
(914) 273-9800
(BY OVERNIGHT MAIL AND FAX)

Albert P. Bedecarre
Quinn Emanuel Urquhart Oliver &
Hedges, LLP
2479 East Bayshore Road
Suite 820
Palo Alto, CA 94303
650-494-3900

Hannah Bentley
394 Scenic Avenue
San Anselmo, CA 94960

 

_________________________

Scott R. McIntosh

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