NAME

SATWIK SINGH

SUBJECT

IPR

YEAR

4TH

ID

212143

SUBMITTED ON

14 AUGUST 2015

TOPIC:
CRITICAL ANALYSIS OF THE NAPSTER CASE AND THE POST NAPSTER
DEVELOPMENT

INTRODUCTION
This paper deals with the critical analysis of a case called, A&M Records Inc. Vs Napster Inc1
Also popularly known as the Napster Case, the case was not simply a challenging case for the
United States Intellectual Property attorneys in fact the entire global legal community followed
the Napster legal saga closely2. The Napster Case completely revolutionised the way music
industry works, and in such regard the case also challenged the facets of traditional Copyright
Right Law.
In the Napster case, the most significant rights at issue were the owners rights to make
reproductions of the work and to distribute copies of the work to the public. The concept of file
sharing is based exactly on these activities.
For all practical purposes this case brought to the fore the challenges that will be faced by
Copyright Law as technology evolves with time. The paper will discuss the brief facts of the
litigation, the issues raised, the judgment and the implications that this case had with respect to
the relationship between the internet in general and peer to peer file sharing in particular, music
and copyright law.
Research Question
Are Legal Remedies sufficient to prevent cases like Napster?
Brief Facts
The appellant, Napster Inc., was a company started in 1999. It provided a platform for users to
upload and download music files in a compressed digital format (MP3). Napster allowed users to
exchange MP3 files stored on their own computer hard-drives directly, without payment.
Napster provided its users with a software called the Music Share that enabled the users to
upload and download songs from the P2P network.
Essentially the free software provided by Napster enabled the users to

make available the music files stored on individual computer hard drives for copying by

other Napster users,

search for MP3 music files stored on other computers who had subscribed to Napster

1 239 F.3d 1004 (9thCir. 2001)

2 Grace Bergen, The Napster Case: The Whole World is Listening [2002] 15 The Transnational Lawyer,
http://heinonline.org accessed 28 July 2015

transfer exact copies of other users MP3 files from one computer to another via the
Internet

Napsters actively participated in this transfer process with the users as it provided technical
support for the indexing and searching of MP3 files, as well as for its other functions, such as
facilitating the download and upload, fixing of the glitches etc.
Naturally the music industry expressed concern over the use of MP3 and peer-to-peer file
sharing technology to create unauthorized, high-quality copies of commercially prepared
recordings. They feared that the consumers will stop purchasing commercial recordings if they
are given the opportunity to conveniently download the same music through the Internet totally
free of cost.
This concern of the music industry culminated in form of a lawsuit and On December 6, 1999, A
& M Records, along with seventeen other record companies, filed the suit against Napster,
alleging contributory and vicarious copyright infringement. The record companies sought to
enjoin Napster from engaging in or assisting others in copying, downloading, uploading,
transmitting, or distributing copyrighted music without the express permission of the rights
owner3."
Course of Litigation
This section will trace the course of the Napster Case. The first lawsuit was filed on December 6,
1999 charging Napster with contributory and vicarious copyright infringement. The plaintiffs
were record companies engaged in the commercial recording, distribution, and sale of
copyrighted musical compositions and sound recordings. On July 26, 2000, the district court
granted plaintiffs' motion for a preliminary injunction. The district court 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 4." Napster appealed
the decision, the appellate court then entered a temporary stay of the preliminary injunction
pending resolution of the appeal. The district court On March 5, 2001, issued a preliminary
injunction order in accordance with the opinion of the Ninth Circuit. The Order required Napster
to block the traffic of all copyrighted sound recordings whose title and artist name were provided
3 Supra 1
4A & M Records, Inc. v. Napster, Inc., 114 F. Supp. 2d 896, 900 (N.D. Cal. 2000)

by the plaintiffs. In other words, Napster was required to prevent transmission of any files that
purportedly contained these sound recordings5.
Analysis
This section will analyse all the issues and contentions that were raised during the Napster
Litigations. However the focus will be on the issues that are common to the Copyright Law
Regime in India. For instance one of the issues was deciding whether in this case Napster
enjoyed exemptions under the Digital Millennium Copyright Act, since this is an American
statute the discussion will not add anything substantial to the discourse to the Copyright Law
Regime in India, however the issue of Contributory Infringement and Vicarious Infringement are
important concepts that need to be discussed in detail as they can potentially form important
contentions in Indian Copyright Litigation in the future. Intellectual Property Law in general
and Copyright Law in particular are very dynamic entities, and hence it would not be too
unforeseeable to assume that these issues can crop up in the Indian context also.
Issues, (relevant to the scope of this paper) that were raised during the litigation are as follows

Whether Napster is responsible for Direct Infringement of Copyright?

Whether Napster was responsible for Contributory Copyright Infringement?

Whether Napster was responsible for Vicarious Copyright Infringement?

Whether the defence of fair use under the Copyright Act can be used in this case?

It is imperative to understand the concepts of Contributory and Vicarious Copyright

Infringement under the US Copyright Law.
In the US Copyright Law, Vicarious Liability is a very broad concept it is defined as, When the
right and ability to supervise coalesce with an obvious and direct financial interest in the
exploitation of copyrighted materials- even in the absence of actual knowledge that the
copyright monopoly is being impaired.. the purpose of copyright law may best effectuated by the
imposition of liability upon the beneficiary of that exploitation6.
The doctrine of Contributory Infringement has been defined as, one who, with knowledge of the
infringing activity, induces, causes, or materially contributes to the infringing conduct of
another, may be held liable as a contributory infringer.7
The difference between the two doctrines is that for contributory infringement to be proved there
must be actual or constructive knowledge which is not required for vicarious liability. The case
5 Hisanari Harry Tanaka, Post-Napster: Peer-to-Peer File Sharing Systems Current and Future Issues on
Secondary Liability under, 22 Loy. L.A. Ent. L. Rev. 37 (2001).

6 Shapiro, Bernstein &Co v HL Green Co 316 F.2d304,3092d Cir (1963)

of, Demetriades v. Kaufmann8, further illustrates the difference it was held that, Benefit and
Control are the signposts of vicarious liability whereas knowledge and participation are the
touchstones of contributory infringement9. The US Supreme Court in the case of Sony Corp of
America v Universal City Studios Inc10gave further clarity regarding this issue. The court said
that there would not be contributory infringement solely on the basis that the defendant sold
equipment with the constructive knowledge that such equipment can be used by the plaintiff to
make unauthorised copies of copyrighted material, there needs to be a closer relationship
between the infringer and the alleged contributory infringer this can be understood if the
contributory infringer has some ability to control the said infringement.
So to prove Contributory Copyright Infringement a copyright owner has to prove

Direct Infringement: There has to be a direct infringement of copyright by the accused.

Knowledge: This element is satisfied by showing that either the infringer actually knew about
the infringing activity, or that he reasonably should have known about the same given all the

facts and circumstances. Specific Information about the infringement is required.

Material Contribution: This element is satisfied if the accused induced, caused, materially
contributed to the underlying direct infringement.
To prove Vicarious Infringement, a copyright owner must prove each of the following:

Direct Infringement: There has been a direct infringement by the accused.

Right and Ability to Control: The accused ability to control or supervise the underlying direct

infringement.
Direct Financial Benefit: The accused has to derive a direct financial benefit from the
underlying direct infringement. The nature of vicarious infringement liability creates a strong
incentive to monitor the conduct of users. This stems from the fact that knowledge is not
required for vicarious infringement liability.
The courts applied the above criteria to decide the issues levelled against Napster.
On the issue of Vicarious Liability the Court found Napster to be liable and ruled in favour of the

plaintiffs because Napster had

(1) a financial interest in the infringing activity
7 Gershwin Publishing v Columbia Artists Management 443 F.2d 1159,1162 (2d Cir
1971)
8 690 F Supp 289,293 (SDNY 1988)
9 Ibid
10464 US 417, 104 S Ct 774(1984)

(2) And it had the right and ability to supervise its users. The court ruled that although Napster did
not charge a fee for its service, Its future revenues were dependent on increasing its user base.
The court also noted that Napster's ability to block user access for any reason was evidence of its
right and ability to supervise the infringing conduct of its users.

The district court and the Ninth Circuit both found that Napster had an explicit reservation of
rights policy, this essentially implied that Napster had the right and ability to control the
activities of its users meaning that this passed the test of determining Vicarious Liability.
On the issue of contributory copyright infringement the court found Napster liable for the same,
this decision of the court was based on the analysis of Religious Technology Center v. Net Com
Online Communications Services," the appellate court stated 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 11." The
appellate court in its conclusion ruled that "sufficient knowledge exists to impose contributory
liability when linked to demonstrated infringing use of the Napster system.12"
Thus Napster was ordered to shut down its file sharing service after being found liable on the
grounds of Direct Infringement, Contributory and Vicarious Infringement of Copyright.
Napster used the defence of Fair Use which was rejected by the courts, which used the
following four criteria to determine whether Napsters Activity would fall under the Provisions
of Section 107 of the Copyright Act
1. Purpose of the use.
2. Nature of the work being used.
3. Amount of the work used.
4. Effect of the use on the market for or value of the original work.
Implication of the case in India
This section is my personal analysis of how the court could have looked at Napster, because till
now such case hasnt come up before the Indian Courts.

11 Napster Appellate Decision, supra note 1, at 1021.

12 Ibid

Copyright by its nature is, a territorial right, and this directly implies that the law will not be the
same in all countries. Till now in India, the question of a downloaders liability for copyright
infringement has not been tested in a court so presumably the decision of the court will vary
from case to case until a precedent is set. In Spain, for example, the law allows P2P file
sharing13. Domestic Spanish copyright law states that to be held liable for copyright
infringement, a person must have copied a protected work with an intent to profit.
If Indian Copyright law is looked at solely, the activities of Napster would not, on the face of it,
amount to direct copyright infringement as they are not:

reproducing the copyrighted works or storing them;

selling or hiring copyright works;
issuing copies of the works to the public;
performing the works in public or communicating them to the public;
making any translations or adaptations of the works.

In the Garware Plastic & Polyester versus Telelink 14case, which pertained to the showing of
video films over a cable network, the Indian Supreme Court held that such an action amounted
to broadcasting or communicating material to a section of the public. The court also held that
such broadcasting of the programme directly affected the earnings of the author and violated his
intellectual property rights, and stated that assisting in infringement would amount to
infringement of copyright. However in the Napster case this is not the issue because they merely
provided the software which facilitated the free sharing of music files over the internet. Napster
did not at any point store these music files on their own server so possibly this would not
constitute as broadcast in my opinion. As such prima facie it does seem that the Napster case
would have been decided differently if remedy was sought only under the Copyright Law.
If one were to focus on the mere act of downloading, it could be argued that it falls squarely
within the scope of Section 51(a)(i). However, Section 51(b)(iv) states that one copy of a work
may be imported by a person for his private and domestic use. It may therefore be possible to
argue that an act of downloading one copy of a copyrighted work hosted on a server outside
India, at any rate, would not qualify as an infringing act as it would fall within the scope of

13 http://www.theregister.co.uk/2006/11/03/spanish_judge_says_downloading_legal/
<Accessed 11 August 2015>
14 1989 AIR Bom 331,

Section51(b)(iv)15.
The legal position in India is as yet unclear and much would depend on the facts and
interpretation of these facts by the adjudicating judge.
CONCLUSION
It is clear from the case that legal remedies are not sufficient to solve the issues that the case
raised, it is substantiated by the fact that even though Napster lost the litigation, Peer to Peer free
music sharing still exists, so clearly technology needs to be used to prevent this copyright
violation along with the legal remedies.

15 http://copyright.lawmatters.in/2010/10/possible-legality-of-downloading-in.html
accessed on 12 August 2015