US District Court Makes Copyright Rulings in Napster Cases

In four consolidated actions (Napster Litigation) against Napster Inc (Napster) and other parties, including Bertelsmann AG (Bertelsmann) (collectively, Defendants), plaintiffs in the media industry such as Capitol Records Inc have recently scored mixed success in a ruling by Justice Patel in the US District Court for the Northern District of California. The ruling came in response to motions by the Defendants seeking summary judgment in the Napster Litigation. The claims were for copyright infringement relating to the P2P Internet file-sharing network formerly operated by Napster. Even though Napster took the benefit of insolvency legislation, ceased operation on July 1, 2001 and is no longer a party, the proceedings continued, with the plaintiffs "taking aim at the still-solvent entities that invested in Napster before it ceased operations", to quote from the reasons for judgment. The allegations (secondary claims) included one that by investing in Napster and assuming control of the Napster file-sharing network the Defendants "contributorily and vicariously infringed the plaintiffs' exclusive rights under the Copyright Act". The plaintiffs advanced three theories of direct infringement as the basis for the secondary claims: two of the claims involved alleged direct infringement by Napster users when downloading and uploading, respectively, and therefore involved the unauthorized distribution of the plaintiffs' copyrighted works. The third claim involved alleged infringement by Napster by way of the indexing of MP3 files that its users posted on the Napster network. For the claims relating to uploading and downloading of files, the Court held that, especially since discoveries had not been completed, the plaintiffs had met the burden of advancing evidence sufficient to establish genuine disputes. For example, there was evidence that almost 15 billion files were downloaded by Napster users between September 2000 and May 2001 and that at least some of those files contained copies of the plaintiffs' copyrighted works. However, in relation to the claims that Napster itself infringed copyright simply by maintaining a centralized indexing system listing the file names of all MP3-formatted music files available on the Napster network, these claims were struck as not satisfying the plaintiffs' burden of proof. This was the burden of proving that Napster or its users directly infringed the plaintiffs' copyrighted musical compositions. For this, the Court held that the plaintiffs had to show one of two things: either actual dissemination of the work or an offer to distribute that work for the purpose of its further distribution or public performance, not merely an offer to distribute the work. For the full reasons for judgment, visit: http://decisions.fca-caf.gc.ca/caf/2005/2005caf172.shtml Summary by: The Editor