The 9th US Circuit Court of Appeals yesterday upheld an injunction
against the music-swapping service Napster, subject to minor
amendments. A panel of three judges said the company is likely to
be found liable for contributory and vicarious copyright
infringement when the case goes to trial later this year.
The history
Napster was started in 1999 by US teenager Shawn Fanning who
wrote the software for the service that allows users to swap MP3
music files stored the hard drives of their computers. It was the
first public application of what is known as peer-to-peer
computing.
Napster users download the file sharing software and can then
exchange song files for free. Napster as a company hosts on its
servers a directory of all MP3 files stored on users’ hard drives,
but it does not store the files themselves. The company has over 50
million registered users.
Napster was sued by the five largest record labels in the world
and others, represented by the Recording Industry Association of
America (RIAA). The record companies claimed that Napster was
guilty of copyright infringement because it carried on its service
without the permission of the copyright owners. Napster argued
that, because it did not actually store the music files on its own
servers, it was not guilty of infringement.
The original injunction
In July last year, the RIAA won a preliminary injunction
prohibiting Napster from “copying or assisting or enabling or
contributing to the copy or duplication of all coyprighted songs
and musical compositions of which the [record companies] hold
rights”.
In effect, it would have taken Napster off-line. However, just
before coming into force, a federal appeals court granted Napster a
stay on the injunction pending a full hearing of the copyright
infringement case. It was this stay which the RIAA appealed to the
9th US Circuit Court of Appeals.
Yesterday’s decision
The court yesterday backed the conclusions of the lower court's
injunction against Napster, with some exceptions.
The court agreed with US District Chief Judge Marilyn Hall Patel
that Napster is likely to be found liable for contributory and
vicarious copyright infringement and said that Napster has a
responsibility to police its own system for infringement.
However, the court ordered Judge Patel to amend the terms of her
original injunction to clarify Napster’s policing
responsibility.
Napster’s lawyers say they plan to request an appeal hearing
before the full bench of the 9th Circuit Court of Appeals.
The arguments
Napster failed in its argument that it could rely on a 1984 case
between Sony and Universal Studios which said that the
manufacturers of home video recording equipment were not liable for
copyright infringement. The 9th Circuit said that Napster’s
“actual, specific knowledge of direct infringement renders [the
Sony case] of limited assistance.”
The court also rejected Napster’s arguments that it’s service
was excused by principles of fair use and a federal law governing
home audio recording.
The judges wrote, “Napster's failure to police the system's
'premises,' combined with a showing that Napster financially
benefits from the continuing availability of infringing files on
its system, leads to the imposition of vicarious liability."
Napster can reject users from its system if it is given notice
that they are repeatedly infringing copyrighted works. The court
took the view that this does not go far enough (it is easy for the
user to re-access the site with a different username). Instead, the
court said the company should halt infringement of individual
songs.
In one of the few concessions to Napster's arguments, the court
said that the terms of Judge Patel’s injunction went too far
“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."
Instead, the record companies have the burden to inform Napster
of copyrighted works available through its system before Napster
must disable access to the offending content. The court told Judge
Patel that when amending the terms of the injunction, she should
recognise that “Napster's system does not currently appear to allow
Napster access to users' MP3 files."
