FALL 2010
Course No.: 9200-710 (& 810)-001
Course ID:  85723 & 85725
Time: M, W 4:45-6:15 p.m.
Room TBD
Professor Jay Dratler, Jr.
Across from Room 231D (IP Alcove)
Home: 330-835-4537
Copyright © 2000, 2001, 2002, 2003, 2004, 2005, 2006, 2008, 2010  Jay Dratler, Jr.  
For permission, see CMI.

Notes and Questions on Napster

1.  Napster is a classic case of new technology meeting old law.  In order to understand its legal implications, however, you must understand exactly how Napster's music-sharing service worked.  Try to list the steps you would take as a Napster user to: (1) sign up for the service, (2) get a song from another user, and (3) share the library of songs on your computer's hard drive with other Napster users.  When one Napster user gets songs from another, does the musical file pass through Napster's computer system?

2.  Like Netcom, Napster cannot be secondarily liable for copyright infringement unless someone is liable for direct infringement.  Is Napster liable for direct infringement of copyrighted music as a result of its operations?  Did Napster itself violate any of the copyright holders' exclusive rights under Section 106?  If not, who is directly liable?  Is it clear now why the Ninth Circuit begins its analysis with a discussion of fair use?  Do you agree with the Ninth Circuit's conclusion that Napster users did not make fair use of each other's musical files?  What factors in the Section 107 analysis of fair use were most important in reaching that conclusion?

3.  Now consider contributory infringement.  Were Napster's operations a "but for" cause of users' infringement?  Were they a substantial contributing cause?  Did Napster have actual or constructive knowledge of users' infringement?  What evidence is there that Napster had or should have had such knowledge?  Was Napster's actual or constructive knowledge simply a matter of notice from the plaintiffs, or do/should other facts suggest knowledge sufficient to impose contributory liability even without notice?  Are the level of Napster's contribution to the infringement, and the level of its knowledge of the infringement sufficient to justify imposing secondary liability on Napster?

4.  Next consider vicarious liability. Did Napster have the right and ability to control the infringing activities of its users?  How, in practice, could it control its users' copying and distribution of infringing musical files?  Did Napster receive a direct financial benefit from its users' infringement?  Do you agree with the court's view that Napster received a direct financial benefit despite its "market share now, profit later" business plan?  Is the standard for "direct financial benefit" consistent as between Netcom and Napster?  (Note that both cases were decided in the Ninth Circuit which, due to its location, handles many computer related copyright cases.)

5.  At the end of its decision, the Ninth Circuit made short work of Napster's arguments under the Audio Home Recording Act of 1992, Pub. L. No. 102-563, 106 Stat. 4237 (Oct. 28, 1992), codified in Chapter 10 of Title 17, 17 U.S.C. §§ 1001-1010.  This statute has a sorry history.  It was originally intended to permit the introduction of digital audio tape recordings, first developed in Japan, into the United States after years of delay.  The statute's grand scheme was to permit noncommercial digital copying of music by consumers under 17 U.S.C. § 1008, while requiring digital audio recording equipment to contain "Serial Copy Management Systems" that prevented digital copies being made from digital copies.  See 17 U.S.C. § 1002(a).  The statute also requires makers, importers and distributors of digital audio recording equipment and media to pay statutorily specified royalties into a fund, see 17 U.S.C. §§ 1003, 1004, to be distributed to copyright owners and performers according to a statutory formula.  See 17 U.S.C. §§ 1005-1007.  The statute thus tried to permit noncommercial home copying while preventing serial copying and providing remuneration for composers and artists through royalties paid by makers and distributors of recording equipment and media.

The entire grand scheme, however, was undone by the advance of technology. All the statute's key features—the permission for noncommercial digital copying by consumers, the rules requiring serial copy management technology, and the rules for royalty payment and distribution—depended upon a series of complex, interlocking definitions of the the types of digital recording equipment and media covered.  See 17 U.S.C. § 1001.  The Ninth Circuit had previously held that this series of interlocking definitions simply did not encompass personal computers and their hard drives as music recording devices and recording media. See Recording Industry Ass'n of America v. Diamond Multimedia Systems, Inc., 180 F.3d 1072, 1078 (9th Cir. 1999).  The Napster court, in rejecting Napster's defense based on 17 U.S.C. § 1008, simply followed this earlier holding. Thus, the entire "Internet revolution" in music distribution which depends upon personal computers and their hard drives for storing and copying musical files (principally those in MPEG-3 or so-called "MP3" format) bypassed the Audio Home Recording Act of 1992.  See generally, Jay Dratler, Jr., Intellectual Property Law: Commercial, Creative and Industrial Property § 6.01[5][f] (Law Journal Press 1994).

When a statutory meltdown like this occurs within a decade after a statute's passage, it is clear that Congress is not doing its job well.  The exact nature of the fault, however, is harder to see.  Did Congress fail because it drafted the statute too narrowly, excluding computer-based music technology?  Did it fail by making the statute too complex and technology dependent, unlike the original Copyright Act of 1976?  Did it fail by not bringing the computer industry "on board" in the lobbying wars so that it could pass a broader statute without objection in the industry?  Or did it, like the Supreme Court in addressing player pianos in the early Twentieth Century, simply fail to anticipate the ceaseless advance of technology?  Whatever the reason for Congress' failure in this regard, one thing is clear: if the trend toward industry- and technology-specific copyright laws continues, copyright law will grow more complicated and less coherent and will litter the United States Code with the carcasses of dead and dying statutory language that make practice in this field a trap for the unwary.

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