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Appeal Nos. 00-16401 and 00-16403
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
NAPSTER, INC., Defendant-Appellant,
v.
A & M RECORDS, INC., et al., Plaintiffs-Appellees.
NAPSTER, INC., Defendant-Appellant,
v.
JERRY LEIBER, et al., Plaintiffs-Appellees.
Appeal from the U.S. District Court Northern District of California
Civil Nos. C 99-5183 MHP (A&M Records) & C 00-0074 MHP (Leiber) Judge Marilyn Hall Patel
Brief of Amici Curiae Motion Picture Association of America, Inc., Software & Information Industry Association, American Film Marketing Association, Association of American Publishers, American Society of Media Photographers, Professional Photographers Association, Graphic Artists Guild, Interactive Digital Software Association, American Society of Composers, Authors and Publishers, Broadcast Music, Inc., Producers Guild of America, Directors Guild of America, Inc., Writers Guild of America, west, Inc., American Federation of Musicians of the United States and Canada, Reed Elsevier, Inc., American Federation of Television and Radio Artists, Office of the Commissioner of Baseball, National Basketball Association, Songwriters Guild of America, and AmSong, Inc.
In Support of Appellees Urging Affirmance
David E. Kendall Joel M. Litvin
Kevin T. Baine 645 5th Avenue
Dennis M. Black New York, NY 10022
WILLIAMS & CONNOLLY LLP Telephone: (212) 407-8000
725 Twelfth Street, N.W.
Washington, D.C. 20005
Telephone: (202) 434-5000
Attorneys for Amici Curiae
Appeal No. 00-16401
NAPSTER, INC., a corporation,
Defendant-Appellant,
v.
A&M RECORDS, INC., a corporation, GEFFEN RECORDS, INC., a corporation, INTERSCOPE RECORDS, a general partnership, SONY MUSIC ENTERTAINMENT INC., a corporation, MCA RECORDS, INC., a corporation, ATLANTIC RECORDING CORPORATION, a corporation, ISLAND RECORDS, INC., a corporation, MOTOWN RECORD COMPANY L.P., a limited partnership, CAPITOL RECORDS, INC., a corporation, LA FACE RECORDS, a joint venture, BMG MUSIC d/b/a THE RCA RECORDS LABEL, a general partnership, UNIVERSAL RECORDS INC., a corporation, ELEKTRA ENTERTAINMENT GROUP INC., a corporation, ARISTA RECORDS, INC., a corporation, SIRE RECORDS GROUP INC., a corporation, POLYGRAM RECORDS, INC., a corporation, VIRGIN RECORDS AMERICA, INC., a corporation, WARNER BROS. RECORDS INC., a corporation,
Plaintiffs-Appellees.
Appeal No. 00-16403
NAPSTER, Inc., a corporation,
Defendant-Appellant,
v.
JERRY LEIBER, individually and dba JERRY LEIBER MUSIC, MIKE STOLLER, individually and dba MIKE STOLLER MUSIC, and FRANK MUSIC CORP., on behalf of themselves and all others similarly situated,
Plaintiffs-Appellees.
CORPORATE DISCLOSURE STATEMENT
The Motion Picture Association of America, Inc., Writers Guild of America, west, Inc., Directors Guild of America, Inc., AmSong, Inc., and the Graphic Artists Guild, UAW Local 3030 have no parent corporations and no publicly held company owns 10% or more of these companies’ stock.
Reed Elsevier, Inc. is a private company, the shares of which are controlled by Reed International, PLC, which is traded on the London stock exchange, and Elsevier NV, which is traded on the Amsterdam exchange.
Broadcast Music, Inc. has no parent corporation. The only publicly held company that directly or indirectly owns 10% or more of the stock of Broadcast Music, Inc. is Gannett Co., Inc. through an indirect, wholly-owned subsidiary.
TABLE OF CONTENTS
Table of Authorities *
INTEREST OF AMICI *
INTRODUCTION *
ARGUMENT *
I. ON THE INTERNET, AS IN THE BRICKS-AND-MORTAR WORLD, COMPANIES MAY NOT COMMERCIALLY EXPLOIT THE PROPERTY OF OTHERS WITHOUT AUTHORIZATION OF THE COPYRIGHT OWNER. *
II. THE STAPLE ARTICLE OF COMMERCE DOCTRINE DOES NOT SHIELD NAPSTER’S PIRACY *
A. The "Staple Article of Commerce" Doctrine Does Not Apply Because Napster Has a Continuing and Necessary Role in the Infringing Activity. *
B. Napster’s Argument Ignores Its Involvement in Helping Users Make Unauthorized Copies of Works. *
III. THE SCOPE OF THE INJUNCTION IS PROPER. 25
CONCLUSION *
TABLE OF AUTHORITIES
FEDERAL CASES
A&M Records, Inc. v. Abdallah, 948 F. Supp. 1449 (C.D. Cal. 1996) 20
A&M Records, Inc. v. Napster, Inc., 2000 WL 1009483 (N.D. Cal. 2000) passim
Apple Computer, Inc. v. Franklin Computer Corp., 714 F.2d 1240 (3rd Cir. 1983) 26, 27
Broadcast Music, Inc. v. 84-88 Broadway, 942 F. Supp. 225 (D.N.J. 1996) 30
Broadcast Music, Inc. v. Blueberry Farms Restaurants, 899 F. Supp. 474 (D. Nev. 1995) 30
Columbia Pictures Indus. v. Aveco, Inc., 800 F.2d 59 (3rd Cir. 1986) 21
Concrete Mach. Co. v. Classic Lawn Ornaments, Inc., 843 F.2d 600 (1st Cir. 1988) 26, 27
Cross Keys Publ’g Co. v. LL Bar T Land & Cattle Co., 887 F. Supp. 219 (E.D. Mo. 1995) 30
Dr. Seuss Enter., L.P. v. Penguin Books USA, Inc., 109 F.3d 1394 (9th Cir. 1997) 28, 29
Intellectual Reserve, Inc. v. Utah Lighthouse Ministry, Inc., 75 F. Supp. 2d 1290 (D. Utah 1999) 23
Marvin Music Co. v. BHC Ltd. P’ship, 830 F. Supp. 651 (D. Mass. 1993) 30
Orth-O-Vision, Inc. v. Home Box Office, 474 F. Supp. 672 (S.D.N.Y. 1979) 28
Pedrosillo Music, Inv. v. Radio Musical, Inc., 815 F. Supp. 511 (D.P.R. 1993) 30, 31
Playboy Enter., Inc. v. Russ Hardenburgh, Inc., 982 F. Supp. 503 (N.D. Ohio 1997) 23
Playboy Enter., Inc. v. Webbworld, Inc., 991 F. Supp. 543 (N.D. Tex. 1997), aff’d with op, 168 F.3d 496 (5th Cir. 1999) 23, 25, 29
RCA/Ariola Int’l, Inc. v. Thomas & Grayston Co., 845 F.2d 773 (8th Cir. 1988) 21
RCA Records v. All-Fast Sys., Inc., 594 F. Supp. 335 (S.D.N.Y. 1984) 21
Sega Enter. Ltd. v. MAPHIA, 948 F. Supp. 923 (N.D. Cal. 1996) 23
Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417 (1984) passim
UMG Recordings, Inc. v. MP3.com, 92 F. Supp. 2d 349 (S.D.N.Y. 2000) 23
Universal City Studios Inc. v. Reimerdes, No. 00 Civ. 0277 LAK, 2000 WL 1160678 (S.D.N.Y. Aug. 17, 2000) 9, 16
DOCKETED CASES
Twentieth Century Fox Film Corp., et al. v. Scour, Inc., No. 00 Civ. 5385 (GBD) (S.D.N.Y., filed July 20, 2000) 10
STATUTES
17 U.S.C. § 512 26
MISCELLANEOUS
Carla Hay, Launch Strikes More Deals to Stream Full Length Vids on Web, Billboard, January 29, 2000 14
Kris Hudson, Catching the Net Wave: Internet Radio Gaining Rapidly In Availability, Popularity, Diversity, Rocky Mountain News, May 22, 2000 14
Lawrence Lessig, Code and Other Laws of Cyberspace (1999) 15
Catherine Olson, Where the Downloads Are, Billboard, November 13, 1999 14
Erin White, Global Corporate Report: Reuters Holds Growth in Its Sites, Wall Street Journal Europe, August 4, 1999 12
INTEREST OF AMICI
Amicus the Motion Picture Association of America, Inc. ("MPAA") is a trade association that serves as the voice of the American motion picture studios. The MPAA also serves as an advocate for the principal producers and distributors of entertainment programming for television, cable, home video, and DVDs. The members of the MPAA include Sony Pictures Entertainment Inc., Metro-Goldwyn-Mayer Studios Inc., Paramount Pictures Corporation, Twentieth Century Fox Film Corporation, Universal Studios, Inc., Warner Bros., and an affiliate of The Walt Disney Company. All MPAA member companies own famous intellectual property and rely on state and federal laws for the protection of that property.
Amicus the American Film Marketing Association ("AFMA") is a trade association representing over 150 producers and distributors of motion pictures and television programming, including Miramax International, NBC Enterprises, New Concorde Pictures, New Line Cinema, RKO Pictures, Saban Pictures, Spelling Entertainment Group, Trimark Pictures, Viacom Pictures/Showtime Networks, and Worldwide Entertainment. AFMA’s members produce over 350 independent motion pictures and countless hours of diverse television programming annually.
Amicus the Association of American Publishers ("AAP") is the principal national trade association of the U.S. book publishing industry. AAP represents more than 260 member companies and organizations that include most major commercial book publishers in the United States, as well as small and non-profit publishers, university presses and scholarly societies, which collectively publish books and journals in every field of human interest. AAP works with its members to meet the challenges and opportunities presented to the book publishing industry by the Internet and other digital technologies.
Amicus the Interactive Digital Software Association ("IDSA") is a trade association that serves the business and public affairs needs of companies that publish video and computer games for video game consoles, personal computers, and the Internet. IDSA members collectively account for more than 90 percent of the $6.1 billion in entertainment software sales in the United States in 1999, and billions more in export sales. Piracy is estimated to have cost the U.S. entertainment software industry more than $3 billion in 1999.
Amicus The Software & Information Industry Association ("SIIA") is the leading trade association committed to promoting and protecting the interests of the software and information industries. SIIA represents over 1,000 member companies, including prominent publishers of software and related products and multimedia titles for reference and education. SIIA's members include legal publishers like West.
Amicus the American Society of Composers, Authors and Publishers ("ASCAP") is an unincorporated voluntary membership association of 100,000 composers, lyricists, and music publishers. Amicus Broadcast Music, Inc. ("BMI") is a non-profit music performing rights organization, representing approximately 250,000 songwriters, composers, and music publishers. On behalf of ASCAP members and BMI affiliated composers and publishers, as well as hundreds of thousands of writers and publishers of foreign performing rights societies, ASCAP and BMI license the right of non-dramatic public performance of the millions of copyrighted musical compositions in their repertories. Because the public performance of music, including by means of transmission over the Internet, is licensed by ASCAP and BMI, the piracy of copyrighted works deprives writers and publishers of the income that are their creative efforts that enrich our culture.
Amicus the American Federation of Musicians of the United States and Canada ("AFM") is an international labor organization representing over 110,000 professional musicians in the United States and Canada. Musicians represented by the AFM record albums, movie soundtracks, television and radio programming, and commercials under industry-wide collective bargaining agreements negotiated by AFM. AFM works to ensure that musicians are adequately compensated for the sale or other exploitation of their recorded performances, and all phonograph and motion picture recording musicians receive some compensation tied to the sales of products recorded under AFM industry-wide collective bargaining agreements.
Amicus Professional Photographers of America ("PPA"), the world’s largest photographic trade association, represents photographers and photographic artists from dozens of specialty areas including portrait, wedding, commercial, advertising, and art. The professional photographers represented by the PPA have been the primary caretakers of world events and family histories for the last 150 years, and have shared their creative works with the public secure in the knowledge that their rights in those works would be protected.
Amicus The American Society of Media Photographers (ASMP) is the largest organization in the world representing professional photographers who make photographs for publication in the various media. ASMP has approximately 6,000 members, most of whom are freelance photographers, who have been producing some of this country's best photography for publishers, advertising agencies and corporate clients for more than half a century. ASMP estimates that there are over 100,000 freelance photographers with interests similar to those of its members in the United States. Under the Copyright Act of 1976, freelance photographers are the presumptive owners of the copyrights to the images they create, and most earn their livings by licensing the use and reuse of their photographs.
Amicus the Directors Guild of America, Inc. ("DGA") is a non-profit corporation that serves as the labor organization and exclusive representative for collective bargaining purposes of, inter alia, directors, assistant directors, and unit production managers of theatrical and television motion pictures.
Amicus Writers Guild of America, west, Inc. ("WGA") is a labor organization representing approximately 8,500 professional authors of stories and screenplays for theatrical motion pictures and television programming and interactive technologies. The WGA also represents news writers for radio and television. As an organization of professional authors, the WGA has dedicated itself to the protection of First Amendment freedom of expression as well as to the protection of intellectual property rights similarly recognized by the U.S. Constitution.
Amicus the Producers Guild of America ("PGA") is a non-profit organization that represents the interests of a substantial number of individual producers in the motion picture and television industries. Members of the PGA initiate, coordinate, supervise, and control, either on their own behalf or on behalf of an employer, all aspects of the motion picture and/or television production process – from inception to completion.
Amicus the American Federation of Television and Radio Artists ("AFTRA") is a national labor union representing over 80,000 performers and newspersons who are employed in the news, entertainment, advertising, and sound recording industries. AFTRA members perform on television, radio, sound recordings, and CD-ROMs. To ensure that AFTRA members receive compensation for their creative efforts, AFTRA works to protect the intellectual property rights of its members and those companies who employ its members to prevent unlicensed uses of the works on which AFTRA members appear. The royalties AFTRA members earn from the public performance and sales of their works affect not only their current income, but also their health and pension benefits, both of which are tied by collective bargaining agreements to the amount of royalties members receive over the course of their working life.
Amicus AmSong, Inc. is a California corporation dedicated to the protection of musical copyrights. AmSong’s members include composers, lyricists, and the heirs of deceased songwriters who participate in the organization on a voluntary basis. AmSong’s members represent every genre of American music, including jazz, rock, country, theater, and classical.
Amicus The Songwriters Guild of America ("SGA") is the nation’s oldest and largest organization run exclusively by and for songwriters. SGA is an unincorporated voluntary association of approximately 5,000 songwriters throughout the United States and the estates of deceased SGA members. SGA is governed by a board composed entirely of songwriters. Among other services, SGA provides royalty collection and audit functions for its writer members, as well as licensing rights in musical works to music users on behalf of its writer-publishers.
Amicus the Office of the Commissioner of Baseball is an entity responsible for the administration and operation of Major League Baseball and has an interest in the protection of Major League Baseball’s copyrights and other intellectual property.
Amicus the National Basketball Association ("NBA") is the pre-eminent professional basketball league in the world. It consists of 29 teams. The NBA engages in a wide array of ancillary commercial endeavors, including the local, national and international licensing of its copyrighted game telecasts and other programming. NBA telecasts are today licensed for distribution in over 200 countries worldwide. The licensing of NBA copyrighted telecasts is an important source of revenue for NBA teams. The NBA supports efforts to strengthen and enforce laws against the unauthorized interception, distribution, copying and use of copyrighted telecasts and materials.
Amicus The Graphic Artists Guild, UAW Local 3030, is a New York not-for-profit corporation that represents graphic designers, illustrators and other creative professionals in the graphic arts. The Guild's mission is to protect and promote the economic interests of its members. It works to improve conditions for all creators of graphic art and to raise ethical and financial standards throughout the graphics industry.
All amici share a common interest in the enforcement of intellectual property laws. This brief is being filed with the consent of all parties.
INTRODUCTION
This case concerns Internet piracy of music. Its implications, however, are far broader, raising the potential for unlimited Internet piracy of motion pictures, television programs, books, software, interactive games and photographs. The production and distribution of each of these products are complex, often requiring the cooperative efforts of numerous artists, authors, craftsmen, and businesses (some small, some very large) who supply their creative effort, artisanship, and work to a product for its ultimate distribution to the public for exhibition, performance, display, rental and/or sale. Representatives of many groups interested in the legal distribution of these works join today in this brief to urge that this Court affirm the well reasoned decision of the district court.
Without the support of this Court, piracy of intellectual property on the Internet will continue to spread. Software already is available to circumvent illegally the anti-copying mechanisms incorporated in Digital Versatile Disks ("DVDs"), exposing those movies to the risk of widespread illegal distribution and copying. Advances in bandwidth and compression technology already allow unauthorized high-quality copies of full-length motion pictures to be made over the Internet. With further technological advances, mass copying of motion pictures on the Internet soon will be as easy as copying music is today on appellant Napster’s service. In addition, Internet applications such as Scour Exchange, iMesh.com, and CuteMX have begun to facilitate "peer-to-peer" distribution and copying not only of music, but also of photographs, television shows and motion pictures, including first-run movies still showing in theaters that have not yet been released into the home market. Video game creators, software designers and book publishers are also engaged in a constant battle to protect their intellectual property in cyberspace. This Court must decide whether the protection of intellectual property, recognized in the Copyright Clause of the Constitution, will be applied on the Internet and will survive as a viable right guaranteed under law.
The Court should not be swayed by the facile argument that this case is about encouraging "new technology" and that established rules should not stand in the way of such "progress." The rule of law applies in cyberspace as it does in the physical world. This Court should affirm Judge Patel’s carefully reasoned order preliminarily enjoining Napster from facilitating further copyright infringement on the Internet.
ARGUMENT
ON THE INTERNET, AS IN THE BRICKS-AND-MORTAR WORLD, COMPANIES MAY NOT COMMERCIALLY EXPLOIT THE PROPERTY OF OTHERS WITHOUT AUTHORIZATION OF THE COPYRIGHT OWNER.
The success of the Internet depends on the ability to present consumers with a broad range of information, entertainment and products in an easily accessible form. Successful web site developers use text, photography, audio, video and/or animation to attract users to their sites. Some businesses, such as Yahoo!, target a mass audience, providing content on a wide-range of subjects of interest to the general public. Others, such as www.webmd.com or www.imdb.com (the "Internet Movie Database") target those interested in a particular subject, be it health or movies.
Legitimate Internet businesses realize that development of content costs money. Some, like salon.com or thestreet.com, create their own content through the efforts of internal sources, who are in turn paid for their work. A vast number of websites, however, rely on third-party sources to provide some or all of the content required for their day-to-day operation. As a result, content licensing has become a significant feature of the Internet economy, just as it is in many other forms of business.
The Internet has sparked commercial opportunities for both new and old businesses that create, supply and/or package content in a way that is likely to attract Internet users. Whatever the source of the content, legitimate Internet companies realize that intellectual property laws apply in cyberspace, and that if they want to exploit someone else’s content for commercial purposes, they must have the permission of the owners and/or creators. As a result, for businesses like Reuters, a long time news provider, relationships with online businesses have added a substantial new revenue source for proprietary materials, and for Reuters has created significant growth in its Internet publishing unit. Erin White, Global Corporate Report: Reuters Holds Growth in Its Sites, Wall Street Journal Europe, Aug. 4, 1999, at 8 (55% of Reuters’ U.S. media revenue came from Internet and online publishing in 1998).
The principle that authors and producers of creative works must give permission for the commercial exploitation of their works has long been recognized. For example, innumerable businesses exploit copyrighted music. Radio stations, radio and television advertisers, television shows, restaurants, shopping malls, elevator companies, community theaters, movies, high school and college marching bands, sports stadia, and countless others incorporate copyrighted music into their offerings. These groups recognize, however, that they must be authorized to use copyrighted works, generally through license arrangements. Royalties from these licenses are used to compensate songwriters, music publishers, and their employees, whose combined efforts lead to the creation of copyrighted music. The same holds true in other industries whose intellectual property is starting to fall victim to uncontrolled distribution and copying on the Internet. The legal exploitation of these works benefits writers, photographers, software designers, artists, performers and directors (and their guilds), as well as the craftsmen, musicians and other union and non-union professionals whose livelihoods depend on the revenues generated by the creators of intellectual property and their licensees.
What has long been true in the physical world remains true in cyberspace: copyrighted works cannot be exploited for commercial gain without the permission of the rights owner. Indeed, legitimate businesses already have secured permission to make popular music available in a variety of contexts on the Internet for free. In addition to many record companies’ websites, sites such as listen.com, and emusic.com offer popular music for download on the Internet, often for free. Other companies, such as Spinner.com, SonicNet.com, www.com, and www.real.com, offer free streaming radio broadcast services licensed by ASCAP and BMI, allowing users to pick the genre of music they prefer. Still other companies such as Launch Media show full-length music videos on the web.
What differentiates legitimate businesses from Napster-like pirates is that such businesses have been authorized to provide the offerings they do, pursuant to terms and conditions agreed with the copyright owners. Because Napster does not seek authorization, legitimate sites are placed at a competitive disadvantage. For these legitimate, licensed sites to grow, this Court must protect them from having to compete against businesses that offer the same music (or facilitate the copying of that music) without authorization.
This case is not about whether music and other intellectual property should be available on the Internet for either a nominal cost or for free. It already is. This case is about whether copyright holders’ exclusive statutory rights in their intellectual property will continue to be respected on the Internet and whether the musicians, actors, directors, producers, software designers and other union members will share in the revenues and profits to which they are entitled for the exploitation of those works. This case also is about whether copyright holders will maintain the right to control the terms and conditions of the exploitation of their property. Only if those rights are protected will creators of intellectual property have adequate incentives to continue to produce and disseminate new works. Indeed, as Professor Lawrence Lessig (whose expert opinion Napster proffered below, but which Judge Patel struck as not proper expert testimony) put it in a context perhaps closer to his home:
If a novelist cannot stop you from copying (rather than buying) her book, then she has very little incentive to produce more books. She may have as much as she had before you took the work she produced, but if you take it without paying, she has no monetary incentive to produce more.
Lawrence Lessig, Code and Other Laws of Cyberspace 133 (1999). Surely the steady flow of new and varied content that has caused the Internet’s popularity to soar would slow if all Internet businesses refused, as Napster does, to respect artists’ and authors’ intellectual property rights.
If Napster’s operations are allowed to continue unabated and unchanged, legitimate Internet businesses will question why they should continue to pay to license materials that are freely available at no cost elsewhere. Indeed, Napster threatens the development and introduction of legitimate business models that are based on the exploitation of authorized materials. In addition, Napster-like services contribute to a debasement of the very notion of intellectual property. By commercially exploiting the works of others without permission, by contributing to the unauthorized exploitation of copyrighted works by its users, and by encouraging users to thumb their collective noses at artists, authors, copyright holders and licensees, Napster fosters a culture that views intellectual property either as not property at all or as communal property, available to everyone without restriction or fee. Napster encourages the view that intellectual property is something that anyone can copy, enjoy and freely distribute worldwide without the permission of its rightful owner and creator.
What Judge Kaplan recently noted with regard to the DeCSS software is equally true here. This Court’s affirmance of the injunction against Napster:
will serve notice on others that "the strong right arm of equity" may be brought to bear against them absent a change in their conduct and thus contribute to a climate of appropriate respect for intellectual property rights in an age in which the excitement of ready access to untold quantities of information has blurred in some minds the fact that taking what is not yours and not freely offered to you is stealing.
Universal City Studios, 2000 WL 1160678 at *35.
II. THE STAPLE ARTICLE OF COMMERCE
DOCTRINE DOES NOT SHIELD NAPSTER’S PIRACY.
If Napster is viewed for what it is – a commercial enterprise built on the unauthorized exploitation of the property of others – the emptiness of its legal arguments becomes apparent. As a result, Napster attempts to divert the Court’s focus from what it does, encouraging others to copy and distribute music they do not own, to what its users do. Even then, Napster does not seriously dispute that twenty-four hours a day, seven days a week, its users engage in what would normally be viewed as copyright infringement on an unprecedented scale. Instead, Napster argues that some users – a "some" that it dubs "substantial" based on flimsy survey evidence – may make "fair use" of the copyrighted works that they download. Napster then analogizes itself to a VCR manufacturer and seeks refuge in the "staple article of commerce" doctrine. Sony Corp. of Am.. v. Universal City Studios, Inc., 464 U.S. 417 (1984).
Tellingly, Napster never identifies what the "staple article of commerce" is in this case. That is because Napster is not the manufacturer of an article of commerce; it is an integrated "service" that plays a continuous role in infringing activity by enabling users to search for, identify, copy, use and then distribute the property of others – all without permission of the rights holders. Furthermore, it has already profited from these activities by attracting millions of dollars in venture capital and is actively exploring ways to further "monetize" its "user base" in the future.
A. The "Staple Article of Commerce" Doctrine
Does Not Apply Because Napster Has a
Continuing and Necessary Role in the Infringing Activity.
The "staple article of commerce" doctrine insulates manufacturers of products from liability for contributory infringement if their products, while providing a means of potential copyright infringement, have substantial non-infringing uses. As the Supreme Court has explained, "the sale of copying equipment, like the sale of other articles of commerce, does not constitute contributory infringement if the product is widely used for legitimate, unobjectionable purposes." Sony Corp., 464 U.S. at 442 (emphasis added). The rationale of the doctrine is simple: a manufacturer who sells a product that is put to widespread lawful use should not be liable for the misuse of the product by some, if the manufacturer does not participate in that misuse. Nothing about this doctrine, or its rationale, applies to Napster. It does not sell a product to consumers who decide independently how to use it; Napster has continuing contact with its users and participates in and benefits from their infringing activity.
Napster does not cease its involvement with this infringing activity after providing its file-sharing program to its users. To engage in infringing activity, Napster users must use Napster’s software to log on to Napster’s servers. Napster scans its users’ hard drives to identify their files. Napster then indexes the files and provides its users with lists of content that contain their search terms (e.g., artists and groups’ names and song titles) and also lists each user's modem speed and connection to enable users to select files that can be transferred more quickly. Users then inform Napster which files they want to copy from specific users’ hard drives, and Napster connects them with the desired computers. Napster then facilitates and monitors the copying process until it is complete, at which point users can use Napster’s software to play the infringing content. As long as a Napster user is connected to Napster’s servers, others around the globe can access and copy any files that user makes available. The greater the number of users that are connected to Napster at any one time, the greater the number of infringing copies that can be facilitated by Napster.
Napster can point to no case in which the "staple article of commerce" doctrine was held to apply to a party so intimately involved in infringing activity. Napster and at least four amici have urged this Court to extend the Sony doctrine to encompass Napster. None of them, however, has been able to find a single case that interpreted Sony in the manner they urge this Court to do. That is not surprising, because the case law is unanimously to the contrary. Particularly instructive is A&M Records, Inc. v. Abdallah, 948 F. Supp. 1449 (C.D. Cal. 1996). There, the court held that the defendant could not seek refuge in the staple article of commerce doctrine because, much as Napster here, the defendant "went far beyond merely selling blank, time-loaded tapes" by, among other things, acting "as a contact between his customers and suppliers of other material necessary for counterfeiting"; selling "duplicating machines to help his customers start up a counterfeiting operation or expand an existing one"; and "tim[ing] legitimate cassettes for his customers to assist them in ordering time-loaded cassettes . . . ." Id. at 1457.
Napster does all of those things and more. It serves as the contact point for the suppliers of infringing content and for those who want to copy it. It provides the tools and the means to carry out the unauthorized distribution and copying. It also tells its users which suppliers have the greatest bandwidth to facilitate the most efficient copying. Nothing in Sony insulates a party so intimately involved in the infringing conduct from liability for contributory infringement.
In a case in which the defendant not only made available a tape-to-tape copying machine, but also assisted in the copying process, the Eighth Circuit correctly noted that what distinguishes Sony from cases such as this is the "direct participation in the illegal copying [that] did not exist in Sony. . . ." RCA/Ariola Int’l, Inc. v. Thomas & Grayston Co., 845 F.2d 773, 781 (8th Cir. 1988). Sony provides no refuge where a party "[does] more than simply supply tape" but also helps further the infringement by helping customers "pick[] the proper tape to reproduce a particular copyrighted work." Id.
As still another court has noted, "[t]he Sony Corp. decision extends protection only to the manufacturer of the infringing machine, not to its operator." RCA Records v. All-Fast Sys., Inc., 594 F. Supp. 335, 339 (S.D.N.Y. 1984); see also Columbia Pictures Indus., Inc. v. Aveco, Inc., 800 F.2d 59, 62 (3d Cir. 1986) (party who "enabl[ed] its customers" to infringe exclusive right to public performance by "encourag[ing] the public to make use of its facilities for the purpose of viewing such tapes" promoted and facilitated infringement and was liable).
Napster has thus far benefited from the massive infringement it facilitates by attracting millions of dollars in venture capital from investors eager to exploit appellees’ works. However Napster eventually chooses to generate revenue for its investors – whether through advertising, subscription fees or by selling products to the users drawn to its site by appellees’ works – Napster is and will be earning money from copyright infringement. Napster simply cannot use appellees’ music as a loss leader to draw users to its site. Judge Patel was correct to enjoin it from doing so.
B. Napster’s Argument Ignores Its Involvement In
Helping Users Make Unauthorized Copies of Works.
Napster emphasizes that it does not store the music it enables users to copy on its servers and that the music does not pass through Napster’s servers while it is being copied. Defendant-Appellant Napster, Inc.’s Opening Brief ("Napster Br.") at 10-11. Napster, however, never explains why those facts should eliminate its legal liability.
The Court would do well to consider how this case would be resolved if Napster did store copies of the music on its servers. If, instead of indexing the contents of users’ hard drives, Napster encouraged those same users to upload the same files to Napster’s servers so that others could download them, no court would find Napster’s conduct to be legal.
Numerous courts have held that online ventures cannot traffic in the property of others without running afoul of the copyright laws.
Napster emphasizes what it does not do because it recognizes that if it did store copies of music on its servers, everyone would see this as an open and shut case. Indeed, Shawn Fanning, Napster’s creator and frequent spokesperson, created Napster because he was frustrated that the recording industry was successful in shutting down websites that did store infringing music files on their servers. Thus, Fanning developed what Napster touts as a "decentralized" system in which infringing files are stored on the hard drives of Napster users with Napster’s encouragement and assistance. See Napster Br. at 12-13.
But surely Mr. Fanning and Napster’s venture capitalists may not accomplish indirectly what it would clearly be illegal to accomplish directly. To find that Napster’s technological alchemy insulates it from liability would be to exalt form over substance. The same users are downloading the same files and putting them to the same use as they would if Napster stored the files on its servers. From a functional standpoint, what Napster is doing is identical to what it would be doing if it stored the music on its servers.
Nor would the burdens on Napster to comply with the copyright laws be substantially different if it stored the files on its servers. Napster complains that it is too burdensome to determine whether any given file is copyrighted and, if so, whether either (i) the copyright owner has authorized the unlimited copying of its property, or (ii) Napster’s users (soon-to-be "customers" if Napster wins this case) are engaged in fair use activities.
Napster Br. at 12-15. But that burden – if there really is one – would not be lessened if Napster stored hundreds of thousands of files on its servers instead of using the hard drives of its users. In any event, the burden is legally irrelevant. No court has ever immunized from liability under the copyright laws those who seek to profit from the works of others based on an argument that it is just too much trouble to respect property rights. In short, if it is illegal to build a business around the commercial exploitation of the works of others without their permission, it should not matter where the infringing computer files are stored.
III. THE SCOPE OF THE INJUNCTION IS PROPER.
Napster was created to facilitate copyright infringement. A&M Records, Inc. v. Napster, Inc., Nos. C 99-5183 MHP, C 00-0074 MHP, 2000 WL 1009483, at *1 (N.D. Cal. July 26, 2000) ("District Court Oral Ruling")
It is thus not surprising that Napster’s creators made no effort to design the service so that it would comply with the copyright laws. Now, having accomplished its goal of facilitating massive copyright infringement, Napster contends that its system is insulated from an injunction because to comply with the copyright laws it would need to completely revamp – if not dismantle – its system.
Napster’s plea should fall on deaf ears. Courts repeatedly rebuff companies that claim they will go out of business if forced to respect copyrights. See Concrete Mach. Co. v. Classic Lawn Ornaments, Inc., 843 F.2d 600, 613 (1st Cir. 1988); Apple Computer, Inc. v. Franklin Computer Corp., 714 F.2d 1240, 1255 (3d Cir. 1983). The rationale is obvious and straightforward – if courts were to refuse to enter injunctions that would have a "devastating effect" on the business of infringers, then, as Napster
has so far been able to do, "a knowing infringer would be permitted to construct its business around its infringement." Apple Computer, 714 F.2d at 1255. That would create perverse incentives: the greater the infringing activity, the more likely a business could avoid the corresponding legal consequences. "It would be incongruous to hold that the more an enterprise relies on copyright infringement for survival, the more likely it will be able to defeat the copyright owner’s efforts to have that activity immediately halted." Concrete Mach., 843 F.2d at 612.
Napster claims that it is impotent to prevent the infringing activity that it has wrought. That is simply not true. Napster can easily redesign its site to comply with the copyright laws. First, if Napster only offered authorized content, it could simply post that content on its website. The only reason that "peer-to-peer" copying is used by Napster is that the vast majority of Napster’s content is infringing. Second, if Napster wants to retain its "peer-to-peer" structure, it could compile a list of authorized
content and require its users to abide by a file-naming convention that insured that only authorized files could be "shared."
In any event, neither this Court, the district court nor the appellees have an obligation to redesign Napster’s business model to both eliminate infringements and maintain Napster as a going concern. It is Napster’s obligation to operate its business within the confines of the law. "When the infringing portion of a defendant’s work may be removed from the remainder, injunctive relief ought extend only to the former. But when, as here, it is technologically impossible to separate out the infringing material, the copyright owner ought not go unprotected." Orth-O-Vision, Inc. v. Home Box Office, 474 F. Supp. 672, 686 n.14 (S.D.N.Y. 1979) (citations omitted).
In the words of this Court when faced with a similar argument, Napster’s designers "created the all-or-nothing predicament in which they currently find themselves," Dr. Seuss Enters., L.P. v. Penguin Books USA, Inc., 109 F.3d 1394, 1406 (9th Cir. 1997), and Napster must find a way out. Appellees and creators of works are not required to witness helplessly the destruction of their intellectual property rights so that Napster can continue its parasitic, infringement-based business model. As Judge Patel aptly noted, Napster is entitled to no more leniency than a child who murders his parents and then seeks sympathy for being an orphan. District Court Oral Ruling at *6. Napster put itself in the position in which it now finds itself.
Napster’s computers may well operate without human intervention, but that does not excuse it from complying with the copyright laws. As another court has stated (with regard to a defendant’s software that automatically downloaded images from newsgroups to a website, which images then were available to subscribers for copying), Napster "might simply have refrained from conducting business until it had developed software or a manual system of oversight to prevent, or at least to minimize the possibility of copyright infringement. In any event, having developed and launched the [service] for commercial use, [it] cannot now evade liability by claiming helplessness in the face of its ‘automatic’ operation." Webbworld, 991 F. Supp. at 553.
Napster argues that appellees should be required to provide a "list" of all of their copyrighted works. In the next breath, Napster argues that such a list would do no good because of the vagaries of how users denominate their files. Both arguments lack merit. Courts consistently enjoin infringing radio stations, restaurants, cafes, and saloons, from continuing to violate the copyright laws without requiring copyright holders to produce lists of every copyrighted work that these entities could potentially infringe. See, e.g., Broadcast Music, Inc. v. 84-88 Broadway, 942 F. Supp. 225 (D.N.J. 1996); Broadcast Music, Inc. v. Blueberry Farms Restaurants, 899 F. Supp. 474 (D. Nev. 1995); Cross Keys Publ’g. Co. v. LL Bar T Land & Cattle Co., 887 F. Supp. 219 (E.D. Mo. 1995); Marvin Music Co. v. BHC Ltd. P’ship, 830 F. Supp. 651 (D. Mass. 1993); Pedrosillo Music, Inv. v. Radio Musical, Inc., 815 F. Supp. 511 (D.P.R. 1993). In each case, the defendants failed to obtain licenses from amici BMI or ASCAP, and the courts entered injunctions extending to "any musical composition in" ASCAP’s or BMI’s repertory. Cross Keys, 887 F. Supp. at 223; see also Marvin Music, 830 F. Supp. at 655 (same); Pedrosillo Music, 815 F. Supp. at 516 (same).
The injunctions issued even though the volume of works was, as here, "substantial" and numbered in the millions. Marvin Music, 830 F. Supp. at 653 n.1; Pedrosillo, 815 F. Supp. at 516. None of the courts required a "list" of copyrighted works to be provided: "there is no obligation for the owner of a copyright to furnish a complete or even an edited list of the millions of compositions in its repertory." Pedrosillo, 815 F. Supp. at 515. Napster clearly is aware that the vast majority of its users’ files infringe the rights of music creators and/or copyright owners. It cannot evade responsibility for its wrongdoing on the grounds that it would be too burdensome for it to determine which files infringe appellees’ copyrights.
Napster argues for "lists" that it says will do it no good, and refuses to make needed changes to its services, for obvious reasons. Its arguments are designed solely to protect the lifeblood of its system – the unauthorized copying and transfer of copyrighted music. What has given Napster value and a large user base is the free access to appellees’ works, not the "New Artists" that it openly scorned before this suit was filed. A&M Records, Inc. v. Napster, Inc., 2000 WL 1182467, at *4 (N.D. Cal. 2000) (Judge Patel’s written opinion). Napster knows full well that, if it is not allowed to exploit appellees’ works, it is irrelevant whether its system can be redesigned to avoid infringement.
CONCLUSION
There is nothing intrinsically wrong with peer-to-peer sharing of computer files. The technology is exciting, but it is not immune from traditional legal restraints. When companies seek to exploit others’ copyrighted works for their own financial gain, they must either make a deal with the copyright holders or take steps to prevent copyright infringement. Napster has done neither. For the reasons stated herein, amici respectfully urge this Court to affirm the decision below.
Respectfully submitted,
WILLIAMS & CONNOLLY LLP
By:
David E. Kendall
Kevin T. Baine
Dennis M. Black
725 Twelfth Street, N.W.
Washington, D.C. 20005-5901
Telephone: (202) 434-5000
Facsimile: (202) 434-5029
Attorneys for Amici Curiae except for the National Basketball Association
Joel M. Litvin
645 5th Avenue
New York, NY 10022
Telephone: (212) 407-8000
Attorney for the National Basketball Association
September 8, 2000
CERTIFICATE OF SERVICE AND FILING
I hereby certify that on September 8, 2000, I caused to be served two copies of the foregoing AMICUS CURIAE BRIEF OF THE MOTION PICTURE ASSOCIATION OF AMERICA, INC., URGING AFFIRMANCE by consigning them to a courier service for the next business day delivery to the following persons:
Russell J. Frackman Laurence F. Pulgram
MITCHELL SILBERBERG FENWICK & WEST
& KNUPP LLP 275 Battery Street, Suite 1500
11377 West Olympic Blvd. San Francisco, CA 94111
Los Angeles, CA 90064
Jonathan Schiller (By Hand)
Hank Goldsmith BOIES, SCHILLER & PROSKAUER ROSE, LLP FLEXNER
1585 Broadway 5301 Wisconsin St. NW
New York, NY 10036 Washington, DC 20015
Daniel Johnson, Jr. Carey Ramos
FENWICK & WEST PAUL, WEISS, RIFKIND,
2 Palo Alto Square WHARTON & GARRISON
Palo Alto, CA 94306 1285 Avenue of the Americas
New York, NY 10019
David Boies
BOIES, SCHILLER & Jeffrey Knowles
FLEXNER, LLP 7th Floor
80 Business Park Drive 222 Kearney St.
Armonk, NY 10504 San Francisco, CA 94108
and that I filed an original and 15 copies of the foregoing AMICUS CURIAE BRIEF OF THE MOTION PICTURE ASSOCIATION OF AMERICA, INC., URGING AFFIRMANCE by consigning them for next business delivery to the courier addressed as follows:
Cathy A. Catterson
Clerk of the Court
U.S. Court of Appeals for the Ninth Circuit
95 Seventh Street
San Francisco, CA 94199-3939 |
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