THE NINTH CIRCUIT'S DECISION IN NAPSTER: The Definitive End To An Era

By MARCI HAMILTON


hamilton02@aol.com
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Thursday, Feb. 15, 2001

The phenomenon that is Napster swept into power and market dominance on a wave of euphoria — euphoria over the possibility of a new world of free content on the Web. The blinding beauty of the new technology stunned normally law-abiding music customers into believing they could have the fruits of creative, musical genius for free. College students who would not dream of shoplifting a compact disc from a real-world store leapt into the Napster world with abandon. Many others followed. But with the Ninth Circuit's Monday ruling in the case, this utopia will crash.

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Napster's Arguments, and Why the Court Rejected Them

The much-maligned Scrooge in this new utopia, the recording industry, sued Napster, arguing that it was contributing to massive copyright infringement. On Monday, the Ninth Circuit ruled — quite correctly — that Napster should be enjoined from permitting the infringement.

The law was never on Napster's side. As a result, the Ninth Circuit was faced with a choice: choose existing law, or fabricate a new set of rules for this new utopia. Despite the allure of the latter choice–making new rules increases the power of judges geometrically, after all, transforming them into legislators —the Ninth Circuit sided with settled copyright law, and applied it straightforwardly to the Napster situation.

The Ninth Circuit rejected Napster's arguments, one by one. First, it held that the district court did not err, as Napster had claimed, in its interpretation of expert testimony on Napster's deleterious effects on the recording industry. It is a popular myth that because sound recording sales have increased since Napster was instituted, Napster is actually good for the music industry. As the Ninth Circuit held, and as the district court had held before it, Napster's expert simply did not have the data to support such a claim, while the plaintiffs presented credible evidence that Napster had caused them harm.

Second, the Ninth Circuit rejected Napster's creative characterization of its service as merely an opportunity for users to "sample" (browse) sound recordings. Browsing requires only limited usage — not the type of full-scale downloading, with the capacity to permit others to copy any file downloaded, that Napster enabled.

Third, the Ninth Circuit rejected Napster's claim that its service does no more than permit "space-shifting" of sound recordings. Napster was attempting to capitalize on the Supreme Court's Sony decision, which rejected a claim that video recorders (VCRs) were tools for contributory copyright infringement, holding that users were simply "time-shifting" their television viewing (by, for example, recording TV shows for later viewing). The problem with Napster's invoking Sony is that Napster does far more than a VCR; it does not merely move content into a more usable or portable mode, it also makes and holds copies (of MP3's) so they can be shared with others.

Another problem with Napster's analogy to the Sony decision is that VCRs are used in a private, home environment, whereas Napster is both communal and ubiquitous. Moreover, Napster is aware of direct copyright infringement by its users, whereas in Sony, direct infringement was not clear at the time the case was decided, given the stage of development of VCR technology then.

Fourth, the Ninth Circuit held that Napster has a clear obligation to police infringement to the extent of its technological abilities, a task that it has eschewed until now. Finally, the court held that neither the Digital Millennium Copyright Act's safe harbor for internet service providers nor the Audio Home Recording Act appear to provide cover for Napster's contributory infringement.

For these reasons, the Ninth Circuit upheld the district court's injunction against Napster in principle. However, it directed the district court to recraft the injunction to reflect a requirement that the copyright holders notify Napster of the specific sound recordings as to which they claim copyright infringement.

Why Napster Should Not Seek Reconsideration by an En Banc Court

Napster has threatened to petition for reconsideration by an en banc court (that is, a larger panel of the Ninth Circuit than the three-judge panel that issued Monday's decision). But given the strength of the arguments discussed above, that is an empty threat, and a likely waste of legal resources.

Moreover, Napster did not just threaten to seek en banc reconsideration; it also declared that it will go to Congress. That is exactly where Napster belongs, if it intends to try to legitimize its practices. Federal copyright law is positive law, the contours of which are determined by Congress. News reports indicate that use of the site went up dramatically as soon as the Ninth Circuit's decision made it clear that an injunction would issue. Napster will likely argue to Congress that a service for which there is this kind of market demand must be good, and that therefore the law should be changed. It is up to Congress.

Is the Napster Decision Enforceable?

An NYU communications professor declared yesterday that file-sharing cannot be stopped, and that the recording industry needs to wake up to the end of copyright law, despite this win. But the truth is that none of the "experts" knows with any certainty how the Web will appear once the technology of "walls" and "fences" is deployed around creative goods.

What we do know is that the Napster decision signals the end of the Wild West era on the Internet; the courts can and will enforce copyright law in a web environment. The million-dollar question is what the web environment will be like in the future. As the technology that can prevent the illegal downloading of such works continues to develop, the current, borderless commons of the Web will change yet again.

Congress and the Copyright Office should institute a Commission to explore these fascinating issues — with no sense of a need to alter the law immediately, but rather a mission of looking at the big picture, and re-examining why copyright exists in the first place. For years, Congress has been derelict in its duty truly to understand the interstices of copyright law for years; rather than fulfilling that duty, it has effectively delegated its decision-making responsibilities to the very copyright-dependent industries it is regulating. It is high time it re-embraced those responsibilities, and started thinking about how the public will be best served in the future on the Web.

Let the debate begin in the forum where it belongs, and let it be deliberative.


Marci A. Hamilton is the Thomas H. Lee Chair in Public Law and Director of the Intellectual Property Law Program at Benjamin N. Cardozo School of Law; she is currently a visiting professor at NYU Law School. Her e-mail address is Hamilton02@aol.com. Professor Hamilton has frequently written for FindLaw on copyright and other intellectual property issues; her columns on these topics may be found in the archive of her pieces on the site at http://writ.findlaw.com

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