A&M Records v Napster Cases of Interest >  IP >  Copyright >  Fair Use

A&M Records, Inc. v. Napster, Inc.

-Napster has MP3 downloading software w/peer to peer sharing of files through a search index or a hotlist function
-A&M claims Napster users are engaged in wholesale reproduction and distribution of copyrighted works, all constituting direct infringement (District Ct. agreed)
-Napster argues the fair use defense: Napster identifies 3 specific alleged fair uses: sampling, space-shifting, and permissive distribution of recordings

-Whether Napster is a contributory and vicarious copyright infringer.

Procedural History:
-District Ct.: granted A&M’s motion for preliminary injunction enjoining Napster from engaging in or facilitating others from copying, downloading, uploading, transmitting, etc. plaintiff’s copyrighted musical compositions and sound recordings w/o express permission of the rights owner
-Ct. of Appeals: entered temporary stay of preliminary injunction pending resolution of this appeal and affirm in part, reverse in part, and remand.

-Test for Direct Infringement:
o Must show ownership of the allegedly infringed material AND
o Must demonstrate that the alleged infringers violate at least one exclusive right granted to copyright holders
-District Ct. goes through the 4 factors of Fair Use and conclude that Napster users are not fair users and this Ct. agrees
-Purpose and Character: The Ct. determined that this was commercial use b/c the users were getting for free what they should be paying for
-Nature: Copying the entire work militates against a finding of fair use. Napster users engage in “wholesale copying” of the work b/c file transfer necessarily involved copying the entire work (however, sometimes fair use is found in wholesale copying)
-Amount and Substantiality of Portion Used: Napster is using the entire work/song.
-Effect of use on Market: If the intended use is for commercial gain, that likelihood may be presumed. But if it is for a noncommercial purpose, the likelihood must be demonstrated. District Ct. concludes Napster harms the market in 2 ways: reduces audio CD sales and raises barriers for A&M’s entry into the market for digital downloading of music.
-Napster’s songs are free and permanent
-The market is adversely effected
o The more music that sampling users download, the less likely they are to eventually purchase the recordings on CD
o Even if the audio CD market is not harmed, Napster has adverse effects on developing digital download market

Rule: Contributory Copyright Infringement
-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 (know or have reason to know)

Rule: Vicarious Liability
-Failure to control or prohibit the infringement (failure to patrol)

-Napster infringed, Napster had both actual and constructive knowledge that its users exchanged copyrighted music
-Napster materially contributes to direct infringement by providing the site and facilities for direct infringement
-Napster has infringed at least 2 of copyright holders’ exclusive rights: the rights of reproduction and distribution
-Not fair use.

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