Summary of Opinion
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
A&M RECORDS, INC., a corporation; GEFFEN
RECORDS, INC., a corporation; INTERSCOPE
RECORDS; SONY MUSIC ENTERTAINMENT,
INC.; MCA RECORDS, INC.; ATLANTIC
RECORDING CORP.; ISLAND RECORDS, INC.;
MOTOWN RECORD CO.; CAPITOL RECORDS,
JERRY LEIBER, individually and doing business
as, JERRY LEIBER MUSIC; MIKE STOLLER and
FRANK MUSIC CORP., on behalf of themselves
and all others similarly situated,
D.C. No. CV-99-05183-MHP
OPINION (First of nine parts)
Appeal from the United States District Court
for the Northern District of California
Marilyn Hall Patel, Chief District Judge, Presiding
Argued and Submitted October 2, 2000
San Francisco, California
Filed February 12, 2001
Before: SCHROEDER, Chief Judge, BEEZER and PAEZ, Circuit Judges.
BEEZER, Circuit Judge:
Plaintiffs are engaged in the commercial recording, distribution and sale of copyrighted musical compositions and sound recordings. The complaint alleges that
Napster, Inc. ("Napster") is a contributory and vicarious copyright infringer. On July 26, 2000, the district court granted plaintiffs' motion for a preliminary injunction.
The injunction was slightly modified by written opinion on August 10, 2000. A&M Records, Inc. v. Napster, Inc., 114 F. Supp. 2d 896 (N.D. Cal. 2000). The
district court preliminarily enjoined Napster "from engaging in, or facilitating others in copying, downloading, uploading, transmitting, or distributing plaintiffs'
copyrighted musical compositions and sound recordings, protected by either federal or state law, without express permission of the rights owner." Id. at 927.
Federal Rule of Civil Procedure 65(c) requires successful plaintiffs to post a bond for damages incurred by the enjoined party in the event that the injunction was
wrongfully issued. The district court set bond in this case at $5 million.
We entered a temporary stay of the preliminary injunction pending resolution of this appeal. We have jurisdiction pursuant to 28 U.S.C. § 1292(a)(1). We affirm in
part, reverse in part and remand.
We have examined the papers submitted in support of and in response to the injunction application and it appears that Napster has designed and operates a system
which permits the transmission and retention of sound recordings employing digital technology.
In 1987, the Moving Picture Experts Group set a standard file format for the storage of audio recordings in a digital format called MPEG-3, abbreviated as "MP3."
Digital MP3 files are created through a process colloquially called "ripping." Ripping software allows a computer owner to copy an audio compact disk ("audio CD")
directly onto a computer's hard drive by compressing the audio information on the CD into the MP3 format. The MP3's compressed format allows for rapid
transmission of digital audio files from one computer to another by electronic mail or any other file transfer protocol.
Napster facilitates the transmission of MP3 files between and among its users. Through a process commonly called "peer-to-peer" file sharing, Napster allows its
users to: (1) make MP3 music files stored on individual computer hard drives available for copying by other Napster users; (2) search for MP3 music files stored on
other users' computers; and (3) transfer exact copies of the contents of other users' MP3 files from one computer to another via the Internet. These functions are
made possible by Napster's MusicShare software, available free of charge from Napster's Internet site, and Napster's network servers and server-side software.
Napster provides technical support for the indexing and searching of MP3 files, as well as for its other functions, including a "chat room," where users can meet to
discuss music, and a directory where participating artists can provide information about their music.
A. Accessing the System
In order to copy MP3 files through the Napster system, a user must first access Napster's Internet site and download "To download means to receive information,
typically a file, from another computer to yours via your modem . . . . The opposite term is upload, which means to send a file to another computer." United States v.
Mohrbacher, 182 F.3d 1041, 1048 (9th Cir. 1999) (quoting Robin Williams, Jargon, An Informal Dictionary of Computer Terms 170-71 (1993)). the MusicShare
software to his individual computer. See GOTOBUTTON BM_1_ http://www.Napster.com. Once the software is installed, the user can access the Napster
system. A first-time user is required to register with the Napster system by creating a "user name" and password.
B. Listing Available Files
If a registered user wants to list available files stored in his computer's hard drive on Napster for others to access, he must first create a "user library" directory on his
computer's hard drive. The user then saves his MP3 files in the library directory, using self-designated file names. He next must log into the Napster system using his
user name and password. His MusicShare software then searches his user library and verifies that the available files are properly formatted. If in the correct MP3
format, the names of the MP3 files will be uploaded from the user's computer to the Napster servers. The content of the MP3 files remains stored in the user's
Once uploaded to the Napster servers, the user's MP3 file names are stored in a server-side "library" under the user's name and become part of a "collective
directory" of files available for transfer during the time the user is logged onto the Napster system. The collective directory is fluid; it tracks users who are connected
in real time, displaying only file names that are immediately accessible.
C. Searching For Available Files
Napster allows a user to locate other users' MP3 files in two ways: through Napster's search function and through its "hotlist" function.
Software located on the Napster servers maintains a "search index" of Napster's collective directory. To search the files available from Napster users currently
connected to the network servers, the individual user accesses a form in the MusicShare software stored in his computer and enters either the name of a song or an
artist as the object of the search. The form is then transmitted to a Napster server and automatically compared to the MP3 file names listed in the server's search
index. Napster's server compiles a list of all MP3 file names pulled from the search index which include the same search terms entered on the search form and
transmits the list to the searching user. The Napster server does not search the contents of any MP3 file; rather, the search is limited to "a text search of the file
names indexed in a particular cluster. Those file names may contain typographical errors or otherwise inaccurate descriptions of the content of the files since they are
designated by other users." Napster, 114 F. Supp. 2d at 906.
To use the "hotlist" function, the Napster user creates a list of other users' names from whom he has obtained MP3 files in the past. When logged onto Napster's
servers, the system alerts the user if any user on his list (a "hotlisted user") is also logged onto the system. If so, the user can access an index of all MP3 file names in
a particular hotlisted user's library and request a file in the library by selecting the file name. The contents of the hotlisted user's MP3 file are not stored on the
D. Transferring Copies of an MP3 file
To transfer a copy of the contents of a requested MP3 file, the Napster server software obtains the Internet address of the requesting user and the Internet address
of the "host user" (the user with the available files). See generally Brookfield Communications, Inc. v. West Coast Entm't Corp., 174 F.3d 1036, 1044 (9th Cir.
1999) (describing, in detail, the structure of the Internet). The Napster servers then communicate the host user's Internet address to the requesting user. The
requesting user's computer uses this information to establish a connection with the host user and downloads a copy of the contents of the MP3 file from one
computer to the other over the Internet, "peer-to-peer." A downloaded MP3 file can be played directly from the user's hard drive using Napster's MusicShare
program or other software. The file may also be transferred back onto an audio CD if the user has access to equipment designed for that purpose. In both cases, the
quality of the original sound recording is slightly diminished by transfer to the MP3 format.
This architecture is described in some detail to promote an understanding of transmission mechanics as opposed to the content of the transmissions. The content is
the subject of our copyright infringement analysis.
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