www.csua.berkeley.edu/~reeser/napster.html
JERRY LEIBER, individually and doing business as, JERRY LEIBER MUSIC; CV-00-00074-MHP OPINION Appeal from the United States District Court for the Northern District of California Marilyn Hall Patel, Chief District Judge, Presiding Argued and Submitted October 2, 2000 San Francisco, California Filed February 12, 2001 Before: SCHROEDER, Chief Judge, BEEZER and PAEZ, Circuit Judges. BEEZER, Circuit Judge: Plaintiffs are 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 injunction was slightly modified by written opinion on August 10, 2000. Federal Rule of Civil Procedure 65 requires successful plaintiffs to post a bond for damages incurred by the enjoined party in the event that the injunction was wrongfully issued. We entered a temporary stay of the preliminary injunction pending resolution of this appeal. I We have examined the papers submitted in support of and in response to the injunction application and it appears that Napster has designed and operates a system which permits the transmission and retention of sound recordings employing digital technology. Napster facilitates the transmission of MP3 files between and among its users. Through a process commonly called "peer-to-peer" file sharing, Napster allows its users to: make MP3 music files stored on individual computer hard drives available for copying by other Napster users; These functions are made possible by Napster's MusicShare software, available free of charge from Napster's Internet site, and Napster's network servers and server-side software. Napster provides technical support for the indexing and searching of MP3 files, as well as for its other functions, including a "chat room," where users can meet to discuss music, and a directory where participating artists can provide information about their music. Accessing the System In order to copy MP3 files through the Napster system, a user must first access Napster's Internet site and download FN1 the MusicShare software to his individual computer. Once the software is installed, the user can access the Napster system. A first-time user is required to register with the Napster system by creating a "user name" and password. Listing Available Files If a registered user wants to list available files stored in his computer's hard drive on Napster for others to access, he must first create a "user library" directory on his computer's hard drive. The user then saves his MP3 files in the library directory, using self-designated file names. He next must log into the Napster system using his user name and password. His MusicShare software then searches his user library and verifies that the available files are properly formatted. If in the correct MP3 format, the names of the MP3 files will be uploaded from the user's computer to the Napster servers. The content of the MP3 files remains stored in the user's computer. Once uploaded to the Napster servers, the user's MP3 file names are stored in a server-side "library" under the user's name and become part of a "collective directory" of files available for transfer during the time the user is logged onto the Napster system. Napster allows a user to locate other users' MP3 files in two ways: through Napster's search function and through its "hotlist" function. Software located on the Napster servers maintains a "search index" of Napster's collective directory. To search the files available from Napster users currently connected to the network servers, the individual user accesses a form in the MusicShare software stored in his computer and enters either the name of a song or an artist as the object of the search. The form is then transmitted to a Napster server and automatically compared to the MP3 file names listed in the server's search index. Napster's server compiles a list of all MP3 file names pulled from the search index which include the same search terms entered on the search form and transmits the list to the searching user. The Napster server does not search the contents of any MP3 file; To use the "hotlist" function, the Napster user creates a list of other users' names from whom he has obtained MP3 files in the past. When logged onto Napster's servers, the system alerts the user if any user on his list (a "hotlisted user") is also logged onto the system. If so, the user can access an index of all MP3 file names in a particular hotlisted user's library and request a file in the library by selecting the file name. The contents of the hotlisted user's MP3 file are not stored on the Napster system. Transferring Copies of an MP3 file To transfer a copy of the contents of a requested MP3 file, the Napster server software obtains the Internet address of the requesting user and the Internet address of the "host user" (the user with the available files). The Napster servers then communicate the host user's Internet address to the requesting user. The file may also be transferred back onto an audio CD if the user has access to equipment designed for that purpose. This architecture is described in some detail to promote an understanding of transmission mechanics as opposed to the content of the transmissions. The content is the subject of our copyright infringement analysis. II We review a grant or denial of a preliminary injunction for abuse of discretion. Application of erroneous legal principles represents an abuse of discretion by the district court. If the district court is claimed to have relied on an erroneous legal premise in reaching its decision to grant or deny a preliminary injunction, we will review the underlying issue of law de novo. Preliminary injunctive relief is available to a party who demonstrates either: a combination of probable success on the merits and the possibility of irreparable harm; III Plaintiffs claim Napster users are engaged in the wholesale reproduction and distribution of copyrighted works, all constituting direct infringement. We note that the district court's conclusion that plaintiffs have presented a prima facie case of direct infringement by Napster users is not presently appealed by Napster. We only need briefly address the threshold requirements. We agree that plaintiffs have shown that Napster users infringe at least two of the copyright holders' exclusive rights: the rights of reproduction, 106; Napster users who upload file names to the search index for others to copy violate plaintiffs' distribution rights. Napster users who download files containing copyrighted music violate plaintiffs' reproduction rights. Napster asserts an affirmative defense to the charge that its users directly infringe plaintiffs' copyrighted musical compositions and sound recordings. Fair Use Napster contends that its users do not directly infringe plaintiffs' copyrights because the users are engaged in fair use of the material.
If the intended use is for commercial gain, that likelihood of market harm may be presumed. But if it is for a noncommercial purpose, the likelihood must be demonstrated. The district court relied on evidence plaintiffs submitted to show that Napster use harms the market for their copyrighted musical compositions and sound recordings. In a separate memorandum and order regarding the parties' objections to the expert reports, the district court examined each report, finding some more appropriate and probative than others. Deborah Jay, conducted a survey (the "Jay Report") using a random sample of college and university students to track their reasons for using Napster and the impact Napster had on their music purchases. Plaintiffs also offered a study conducted by Michael Fine, Chief Executive Officer of Soundscan, (the "Fine Report") to determine the effect of online sharing of MP3 files in order to show irreparable harm. Fine found that online file sharing had resulted in a loss of "album" sales within college markets. After reviewing defendant's objections to the Fine Report and expressing some concerns regarding the methodology and findings, the district court refused to ...
|
http://csua.com/feed/