The Digital Millennium Copy Right Act (DMCA) was created in 1998 to protect the ownership rights of author’s and artists from the ability of people to easily and quickly make unauthorized copies of perfect or near perfect quality. Technology created or distributed for this purpose was made illegal. See generally Title I, Section 1201, of the DMCA.

Of course, the Internet has provided the access to electronic versions of the countless works of art or authorship. Equally obvious is that access to the Internet is through Internet Service Providers (ISPs). In order to prevent overly broad interpretation of the DMCA from shutting down the Internet, an exception or “safe harbor” was built for ISP’s. See generally Title II, Section 512 of the DMCA.

This exception to liability applies so long as the ISP is act as only passive conduit of information. This can include passively allowing temporary storage of information (“caching”) on an ISP’s servers. The safe harbor also applies to information location tools (search engines).

Unfortunately for Napster, the Federal District Court (the “Trial Court”) did not find the “safe harbor” provisions applicable to Napster. Napster was an online service providing Internet access to copyrighted material. The service employed Napster’s file sharing software that essentially allowed an individual user to obtain a copy of material (typically music recordings) from another user also simultaneously online. The significance of this is that copyrighted material passed directly from one user to another (“peer to peer” sharing). Napster did not maintain an inventory or library of music or films that a user could down load. Therefore, Napster argued that it was a passive conduit in the transfer of information by third parties, i.e., individual users, regardless of the information’s copyright status.

Napster argued that it was simply an “Internet equivalent” to a VCR manufacturer. Of course, VCR’s can be used to create unauthorized or “bootleg” video copies of copyrighted movies, but the manufacture of VCR’s has not been prohibited (nor even the manufacture and sale of blank tapes used to create the copies). Note that photo copiers and photocopier paper are also freely sold. Napster attempted to use the 1984 decision of the US Supreme Court’s finding that Sony’s manufacture and sale of VCRs and VCR tapes did not constitute contributory copyright infringement. Thus the movie industry was unsuccessful in attempt to enjoin Sony’s VCR sales in the U.S. See Sony Corporation of America vs. Universal Studios, 464 U.S. 417 (1984).

However the Napster Trial Court distinguished the Sony decision by stating the Supreme Court in Sony had found that VCR’s were frequently used to record free television programming for later viewing by individuals. This non-commercial use would not be in violation of copyright law. Also the Trial Court stated the Supreme Court in Sony had found that Sony was not encouraging unauthorized copying of copyrighted work. The Napster Trial Court then made the factual determination that there was only an insufficiently limited legitimate use of the Napster software and the Napster Internet site. Essentially, the Court found Napster’s action not to be like the manufacture of VCR’s, but rather akin to a distributor of free VCRs and directories to free videotape libraries from which copyrighted material could be copied. Such an arrangement could not be defined as “fair use” of copyrighted work.

Napster also argued it was merely a passive conduct of information. As such it would be eligible for protection given to ISP’s under the DMCA safe harbors discussed above. This argument appears to have substantial merit, but the Trial Court seems to have pushed the safe harbor provisions aside. The Court found that, as a technical mater, the copyrighted information, i.e., recorded music did not flow through Napster’s server. Although that would seem to further remove Napster from copyright infringement, the Court used this fact to distinguish Napster from a protected passive ISP conduit since Napster was not, technically a conduit of information. (The information did not flow through Napster.) Further, the Trial Court found that Napster’s postings on its website were not passive activity. These postings included links to sites where copyrighted material could be downloaded. The Trial Court further determined that Napster had sufficient knowledge of the unauthorized copying of copyrighted material by its users to be a contributory infringer.

On appeal, the separate Federal 9th Circuit determined that Napster’s software, like Sony’s VCR’s, could have sufficient non-infringing use. In addition the Appellate Court held that without specific showing of knowledge by Napster of copyright infringement by its users, Napster would not be a liable for contributory infringement. (Note VCR instructions contain detailed information to enable users to link multiple VCR’s to allow duplication of tapes, presumably including copyrighted movie videotapes.)

Interestingly, the 9th Circuit Court of Appeals required the owners of copyrighted material to notify Napster of specific copyrighted material Napster was supposed to remove from its site. It is not clear to me whether this alone would prohibit the use of downloaded Napster software and direct “peer to peer” copying of material. Perhaps it was sufficient for the recording and movie industry to push Napster off the Internet main street and into the back alleys. It has recently been reported that Napster filed for Chapter 11 Bankruptcy.

© David McEwing 2002

Note a more complete discussion of this topic is found in an article written by Sheila M. Heidmiller, appearing in the Intellectual Property and Technology Law Journal, Volume 14, Number 4, April 2002. Ms. Herdville may contacted directly at