A&M Records et. al.

v Napster, Inc
9th Circuit Court of Appeals
239 F.3d 1004 (9th Cir. 2001)

Key Search Terms: copyright, infringement, fair use, contributory

liability, direct, vicarious

Facts
A&M Records engaged in the commercial recording, distribution and sale of
copyrighted music. Napster allows it users to (1) make MP3 available for
copying for other users (2) search for MP3 music stored by other users (3)
transfer exact copies of the content of other user’s computers to their own.
A&M Records alleged a direct infringement of copyrights and that Napster is a
contributory and vicarious copyright infringer. Napster put forward as an
affirmative defense that its users are engaged in the “fair use” of the music. The
district court preliminarily enjoined Napster from continuing its activities
without the express permission of the rights owner. Napster appealed the
injunction.

Issue
The issue is whether A&M Records established a claim of direct infringement
and whether Napster met the requirements of the fair use defense.

Holding
The district court ruled that A&M Records established ownership and that
copyright holder’s exclusive rights of reproductions and distribution were
infringed. The Ninth Circuit agreed. The factors which the district court
considered for Napster’s fair use defense were: (1) the purpose ad character of
the use (2) the nature of the copyrighted work (3) the amount of the portion
used in relation to the work as a whole; and (4) the effect of the use upon the
potential market for the work. The district court concluded that downloading
the copyrighted work does not transform it. Additionally, they held that Napster
was engaged in commercial use of the work, even though Napster received no
direct economic benefit. The district court held that the A&M Records’ material
was creative in nature, thus undermining any fair use argument. Additionally,
the district concluded that Napster copied the entirety of the copyrighted
material, and copying an entire work mitigates against a finding of fair use. The
court found that Napster’s use harms the market by reducing CD sales among
college age students and raising barriers to entrance into the market. The
district court went on to find that Napster had both actual and constructive
knowledge that its users exchanged in copyrighted music. The Ninth Circuit
stated that A&M would likely succeed on its vicarious liability claim and the
contributory copyright infringement claim

Summarized By: Brian Raterman