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A & M Records, Inc. v. Napster, Inc.  (§ 512 Issues)

2000 U.S. Dist. LEXIS 6243, 54 U.S.P.Q.2d (BNA) 1746 (N..D. Cal. 2000)

Marilyn Hall Patel, Chief Judge, United States District Court, Northern District of California:

On December 6, 1999, plaintiff record companies filed suit alleging contributory and vicarious federal copyright infringement and related state law violations by defendant Napster, Inc. ("Napster").  Now before this court is defendant's motion for summary adjudication of the applicability of a safe harbor provision of the Digital Millennium Copyright Act ("DMCA"), 17 U.S.C. section 512(a), to its business activities.

* * * [*6] * * *


The court may grant summary [*7] adjudication of a particular claim or defense under the same standards used to consider a summary judgment motion. See Fed. R. Civ. P. 56(a), (b) * * * [*8] * * *


Section 512 of the DMCA addresses the liability of online service and Internet access providers for copyright infringements occurring online.  Subsection 512(a) exempts qualifying service providers from monetary liability for direct, vicarious, and contributory infringement and limits injunctive relief to the degree specified in subparagraph 512(j)(1)(B).  Interpretation of subsection 512(a), or indeed any of the section 512 safe harbors, appears to be an issue of first impression.(1) [*9]

Napster claims that its business activities fall within the safe harbor provided by subsection 512(a).  This subsection limits liability "for infringement of copyright by reason of the [service] provider's transmitting, routing, or providing connections for, material through a system or network controlled or operated by or for the service provider, or by reason of the intermediate and transient storage of that material in the course of such transmitting, routing, or providing connections," if five conditions are satisfied . . . . [*10] * * * [The court recites the five conditions.]

Citing the "definitions" subsection of the statute, Napster argues that it is a "service provider" for the purposes of the 512(a) safe harbor.  See 17 U.S.C. § 512(k)(1)(A).  First, it claims to offer the "transmission, routing, or providing of connections for digital online communications" by enabling the connection of users' hard-drives and the transmission of MP3 files "directly from the Host hard drive and Napster browser through the Internet to the user's Napster browser and hard drive."  Second, Napster states that users choose the online communication points and the MP3 files to be transmitted with no direction from Napster.  Finally, the Napster system does not modify the content of the transferred files.  Defendant contends that, because [*11] it meets the definition of "service provider,"(2) it need only satisfy the five remaining requirements of the safe harbor to prevail in its motion for summary adjudication.[*12]

Defendant then seeks to show compliance with these requirements by arguing: (1) a Napster user, and never Napster itself; initiates the transmission of MP3 files; (2) the transmission occurs through an automatic, technical process without any editorial input from Napster; (3) Napster does not choose the recipients of the MP3 files; (4) Napster does not make a copy of the material during transmission; and (5) the content of the material is not modified during transmission. Napster maintains that the 512(a) safe harbor thus protects its core function—"transmitting, routing and providing connections for sharing of the files its users choose."

Plaintiffs disagree.  They first argue that subsection 512(n) requires the court to analyze each of Napster's functions independently and that not all of these functions fall under the 512(a) safe harbor.  In their view, Napster provides information location tools—such as a search engine, directory, index, and links—that are covered by the more stringent eligibility requirements of subsection 512(d), rather than subsection 512(a).

Plaintiffs also contend that Napster does not perform the function which the 512(a) safe harbor [*13] protects because the infringing material is not transmitted or routed through the Napster system, as required by subsection 512(a). They correctly note that the definition of "service provider" under subparagraph 512(k)(1)(A) is not identical to the prefatory language of subsection 512(a). The latter imposes the additional requirement that transmitting, routing, or providing connections must occur "through the system or network."  Plaintiffs argue in the alternative that, if users' computers are part of the Napster system, copies of MP3 files are stored on the system longer than reasonably necessary for transmission, and thus subparagraph 512(a)(4) is not satisfied.

Finally, plaintiffs note that, under the general eligibility requirements established in subsection 512(i), a service provider must have adopted, reasonably implemented, and informed its users of a policy for terminating repeat infringers.  Plaintiffs contend that Napster only adopted its copyright compliance policy after the onset of this litigation and even now does not discipline infringers in any meaningful way.  Therefore, in plaintiffs' view, Napster fails to satisfy the DMCA's threshold eligibility requirements [*14] or show that the 512(a) safe harbor covers any of its functions.

I.  Independent Analysis of Functions

Subsection 512(n) of the DMCA states:
    "Subsections (a), (b,), (c), and (d) describe separate and distinct functions for purposes of applying this section.  Whether a service provider qualifies for the limitation on liability in any one of those subsections shall be based solely on the criteria in that subsection and shall not affect a determination of whether that service provider qualifies for the limitations on liability under any other such subsections."
Citing subsection 512(n), plaintiffs argue that the 512(a) safe harbor does not offer blanket protection to Napster's entire system.  Plaintiffs consider the focus of the litigation to be Napster's function as an information location tool—eligible for protection, if at all, under the more rigorous subsection 512(d).  They contend that the system does not operate as a passive conduit within the meaning subsection 512(a).  In this view, Napster's only possible safe harbor is subsection 512(d), which applies to service providers "referring or linking users to an online location containing infringing material [*15]or infringing activity, by using information location tools, including a directory, index, reference, pointer, or hypertext link. . . ."  Subsection 512(d) imposes more demanding eligibility requirements because it covers active assistance to users.

Defendant responds in two ways.  First, it argues that subsection 512(a), rather than 512(d), applies because the information location tools it provides are incidental to its core function of automatically transmitting, routing, or providing connections for the MP3 files users select. In the alternative, defendant maintains that, even if the court decides to analyze the information location functions under 512(d), it should hold that the 512(a) safe harbor protects other aspects of the Napster service.  

Napster undisputedly performs some information location functions.  The Napster server stores a transient list of the files that each user currently logged-on to that server wants to share.  This data is maintained until the user logs off but the structure of the index itself continues to exist.  If a user wants to find a particular song or [*16] recording artist, she enters a search, and Napster looks for the search terms in the index.  Edward Kessler, Napster's Vice President of Engineering, admitted in his deposition that, at least in this context, Napster functions as a free information location tool.  Napster software also has a "hot list" function that allows users to search for other users' log-in names and receive notification when users with whom they might want to communicate have connected to the service.  In short, the parties agree on the existence of a searchable directory and index, and Napster representatives have used the phrase "information location tool," which appears in the heading for subsection 512(d), to characterize some Napster functions.

There the agreement ends.  According to Napster, the information location tools upon which plaintiffs base their argument are incidental to the system's core function of transmitting MP3 music files, and for this reason, the [*17] court should apply subsection 512(a).  Napster also disputes the contention that it organizes files or provides links to other Internet sites in the same manner as a search engine like Yahoo!.  Consequently, it deems subsection 512(d) inapplicable to its activities. Cf. H.R. Rep. No. 105-551 (II), 105th Cong., 2d Sess. (1998), 1998 WL 414916, at *147 (using Yahoo! as an example of an information location tool covered by 512(d)).  Napster contrasts its operations, which proceed automatically after initial stimuli from users, with search engines like Yahoo! that depend upon the "human judgment and editorial discretion" of the service provider's staff.

Napster's final and most compelling argument regarding subsection 512(d) is that the DMCA safe harbors are not mutually exclusive.  According to subsection 512(n), a service provider could enjoy the 512(a) safe harbor even if its information location tools were also protected by (or failed to satisfy) subsection 512(d).  See 17 U.S.C. § 512(n) ("Whether a service provider qualifies for the [*18] limitation on liability in any one of those subsections . . . shall, not affect a determination of whether that service provider qualifies for the limitations on liability under any other such subsections.")  Similarly, finding some aspects of the system outside the scope of subsection 512(a) would not preclude a ruling that other aspects do meet 512(a) criteria.  

Because the parties dispute material issues regarding the operation of Napster's index, directory, and search engine, the court declines to hold that these functions are peripheral to the alleged infringement, or that they should not be analyzed separately under subsection 512(d).(3)  Indeed, despite its contention that its search engine and indexing functions are incidental to the provision of connections and transmission of MP3 files, Napster has advertised the ease with which its users can locate "millions of songs" online without "wading through page after page of unknown artists."  Such statements by Napster to promote its service are tantamount to an admission that its search and indexing functions are essential to its marketability.  Some of these essential functions—including but [*19] not limited to the search engine and index—should be analyzed under subsection 512(d).

However, the potential applicability of subsection 512(d) does not completely foreclose use of the 512(a) safe harbor as affirmative defense.  See 17 U.S.C. § 512(n).  The court will now turn to Napster's eligibility for protection under subsection 512(a).  It notes at the outset, though, that a ruling that subsection 512(a) applies to a given function would not mean that the DMCA affords the service provider blanket protection.

II.  Subsection 512(a)

Plaintiffs' principal argument against application of the 512(a) safe harbor is that Napster does not perform the passive conduit function eligible for protection under this subsection.   As defendant [*20] correctly notes, the words "conduit" or "passive conduit" appear nowhere in 512(a), but are found only in the legislative history and summaries of the DMCA.  The court must look first to the plain language of the statute, "construing the provisions of the entire law, including its object and policy, to ascertain the intent of Congress."  United States v. Hockings, 129 F.3d 1069, 1071 (9th Cir. 1997) . . . .  If the statute is unclear, however, the court may rely on the legislative history.  See Hockings, 129 F.3d at 1071.  The language of subsection 512(a) makes the safe harbor applicable, as a threshold matter, to service providers "transmitting, routing or providing connections for, material through a system or network controlled or operated by or for the service provider. . . ."  17 U.S.C. § 512(a) (emphasis added).  According to plaintiffs, the use of the word "conduit" in the legislative history explains the meaning of "through a system."

Napster has expressly denied that the transmission [*21] of MP3 files ever passes through its servers.  Indeed, Kessler declared that "files reside on the computers of Napster users, and are transmitted directly between those computers."  MP3 files are transmitted "from the Host user's hard drive and Napster browser, through the Internet to the recipient's Napster browser and hard drive."   The internet cannot be considered "a system or network controlled or operated by or for the service provider," however.  17 U.S.C. § 512(a).  To get around this problem, Napster avers (and plaintiffs seem willing to concede) that "Napster's servers and Napster's MusicShare browsers on its users' computers are all part of Napster's overall system."  Defendant narrowly defines its system to include the browsers on users' computers.  In contrast, plaintiffs argue that either (1) the system does not include the browsers, or (2) it includes not only the browsers, but also the users' computers themselves[.]

Even assuming that the system includes the browser on each [*22] user's computer, the MP3 files are not transmitted "through" the system within the meaning of subsection 512(a).  Napster emphasizes the passivity of its role—stating that "all files transfer directly from the computer of one Napster user through the Internet to the computer of the requesting user." (emphasis added)[.]  It admits that the transmission bypasses the Napster server.  This means that, even if each user's Napster browser is part of the system, the transmission goes from one part of the system to another, or between parts of the system, but not "through" the system.  The court finds that subsection 512(a) does not protect the transmission of MP3 files.

The prefatory language of subsection 512(a) is disjunctive, however.  The subsection applies to "infringement of copyright by reason of the provider's transmitting, routing, or providing connections through a system or network controlled or operated by or for the service provider." 17 U.S.C. § 512(a) (emphasis added).  The court's finding that transmission does not occur [*23] "through" the system or network does not foreclose the possibility that subsection 512(a) applies to "routing" or "providing connections."  Rather, each of these functions must be analyzed independently.

Napster contends that providing connections between users' addresses "constitutes the value of the system to the users and the public."   This connection cannot be established without the provision of the host's address to the Napster browser software installed on the requesting user's computer.  The central Napster server delivers the host's address.  While plaintiffs contend that the infringing material is not transmitted through the Napster system, they provide no evidence to rebut the assertion that Napster supplies the requesting user's computer with information necessary to facilitate a connection with the host.

Nevertheless, the court finds that Napster does not provide connections "through" its system.  Although the Napster server conveys address information to establish a connection between the requesting and host users, the connection itself occurs through the Internet. The legislative history of section 512 demonstrates [*24] that Congress intended the 512(a) safe harbor to apply only to activities "in which a service provider plays the role of a ‘conduit' for the communications of others." H.R. Rep. No. 105-551(II), 105th Cong., 2d Sess. (1998) . . . .  Drawing inferences in the light most favorable to the non-moving party, this court cannot say that Napster serves as a conduit for the connection itself, as opposed to the address information that makes the connection possible.  Napster enables or facilitates the initiation of connections, but these connections do not pass through the system within the meaning of subsection 512(a).  

Neither party has adequately briefed the meaning of "routing" in subsection 512(a), nor does the legislative history shed light on this issue.  Defendant tries to make "routing" and "providing connections" appear synonymous—stating, for example, that "the central Napster server routes the transmission by providing the Host's address to the Napster browser that is installed on and in use by User's computer."  However, the court doubts that Congress would have used the terms "routing" and "providing connections" disjunctively if [*25] they had the same meaning.(4)  It is clear from both parties' submissions that the route of the allegedly infringing material goes through the Internet from the host to the requesting user, not through the Napster server.  The court holds that routing does not occur through the Napster system.

Because Napster does not transmit, route, or provide connections through its system, it has failed to demonstrate that it qualifies for the 512(a) safe harbor.  The court thus declines to grant summary adjudication in its favor.

III.  Copyright Compliance Policy

Even if the court had determined that Napster meets the criteria [*26] outlined in subsection 512(a), subsection 512(i) imposes additional requirements on eligibility for any DMCA safe harbor.  This provision states:
    "The limitations established by this section shall apply to a service provider only if the service provider—
      ‘(A)  has adopted and reasonably implemented, and informs subscribers and account holders of the service provider's system or network of, a policy that provides for the termination in appropriate circumstances of subscribers and account holders of the service provider's system or network who are repeat infringers; and

      "(B)  accommodates and does not interfere with standard technical measures."
17 U.S.C. § 512(i).  

Plaintiffs challenge Napster's compliance with these threshold eligibility requirements on two grounds.  First, they point to evidence from Kessler's deposition that Napster did not adopt a written policy of which its users had notice until on or around February 7, 2000—two months after the filing of this lawsuit.  Kessler testified that, although Napster had a copyright compliance policy as early [*27] as October 1999, he is not aware that this policy was reflected in any document or communicated to any user.  Congress did not intend to require a service provider to "investigate possible infringements, monitor its service or make difficult judgments as to whether conduct is or is not infringing," but the notice requirement is designed to insure that flagrant or repeat infringers "know that there is a realistic threat of losing [their] access."  H.R. Rep. 105-551(II), at *154.  

Napster attempts to refute plaintiffs' argument by noting that subsection 512(i) does not specify when the copyright compliance policy must be in place.  Although this characterization of subsection 512(i) is facially accurate, it defies the logic of making formal notification to users or subscribers a prerequisite to exemption from monetary liability.  The fact that Napster developed and notified its users of a formal policy after the onset of this action should not moot plaintiffs' claim to monetary relief for past harms.  Without further documentation, defendant's argument that it has satisfied subsection 512(i) is [*28] merely conclusory and does not support summary adjudication in its favor.  

Summary adjudication is also inappropriate because Napster has not shown that it reasonably implemented a policy for terminating repeat infringers.  See 17 U.S.C. § 512(i)(A) (requiring "reasonable" implementation of such a policy).  If Napster is formally notified of infringing activity, it blocks the infringer's password so she cannot log on to the Napster service using that password.  Napster does not block the IP addresses of infringing users, however, and the parties dispute whether it would, be feasible or effective to do so.

Plaintiffs aver that Napster wilfully turns a blind eye to the identity of its users—that is, their real names and physical addresses—because their anonymity allows Napster to disclaim responsibility for copyright infringement.  Hence, plaintiffs contend, "infringers may readily reapply to the Napster system to recommence their infringing downloading and uploading of MP3 music files."  Plaintiffs' expert, computer security researcher Daniel Farmer, [*29] declared that he conducted tests in which he easily deleted all traces of his former Napster identity, convincing Napster that "it had never seen me or my computer before."  Farmer also cast doubt on Napster's contention that blocking IP addresses is not a reasonable means of terminating infringers. He noted that Napster bans the IP addresses of users who runs "bots"(5) on the service.

Hence, plaintiffs raise genuine issues of material fact about whether Napster has reasonably implemented a policy of terminating repeat infringers.  They have produced evidence that Napster's copyright compliance policy is neither timely nor reasonable within the meaning of subparagraph 512(i)(A).


This court has determined above that Napster does not meet the requirements of subsection 512(a) because it does not [*30] transmit, route, or provide connections for allegedly infringing material through its system.  The court also finds summary adjudication inappropriate due to the existence of genuine issues of material fact about Napster's compliance with subparagraph 512(i)(A), which a service provider must satisfy to enjoy the protection of any section 512 safe harbor.  Defendant's motion for summary adjudication is DENIED.

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1.   [court's footnote 3]  In Universal City Studios, Inc. v. Reimerdes, 82 F. Supp. 2d 211, 217 & n.17 (S.D.N.Y. 2000), one defendant sought protection under subsection 512(c).  Although the court noted in passing that the defendant offered no evidence that he was a service provider under subsection 512(c), it held that he could not invoke the safe harbor because plaintiffs claimed violations of 17 U.S.C. section 1201(a), which applies to circumvention products and technologies, rather than copy right infringement.

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2.   [court's footnote 5]  It is not entirely clear to the court that Napster qualifies under the narrower subparagraph 512(k)(1)(A).  However, plaintiffs appear to concede that Napster is a "service provider" within the meaning of subparagraph 512(k)(1)(A), arguing instead that Napster does not satisfy the additional limitations that the prefatory language of subsection 512(a) imposes.  The court assumes, but does not hold, that Napster is a "service provider" under subparagraph 512(k)(1)(A).

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3.   [court's footnote 6]  The court need not rule on the applicability of subsection 512(d) to the functions plaintiffs characterize as information location tools because defendant does not rely on subsection 512(d) as grounds for its motion for summary adjudication.

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4.   [court's footnote 7]  Napster sometimes appears to recognize a distinction between the two terms.  For example, it states that "the system provides remote users with connection to each other and allows them to transmit and route the information as they choose."

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5.   [court's footnote 8]  Farmer informed that court that "A ‘bot' is a robot, or program, that performs actions continuously, in a sort of manic or robotic fashion."

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