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Calling the defense brief in A&M Records Inc. v. Napster “the latest in a long line of Napster’s attempts to reinvent itself and its legal position,” the plaintiff music companies filed a reply brief July 13 ( A&M Records Inc. v. Napster Inc., N.D. Calif., No. C99-05183 MH, reply brief filed 7/13/00). The brief tackled head-on the claims Napster has made that its users’ copying of copyrighted songs as MP3 music files qualifies as “fair use” or as the equivalent of home taping, which is protected under the federal Audio Home Recording Act (AHRA). The plaintiffs, a group of record companies and music publishers, argued in their brief that AHRA does not apply to Internet piracy, and that courts have never held that large-scale copying and distribution of copyrighted works can qualify as “fair use.” Hilary Rosen, who is president and chief executive officer of the Recording Industry Association of America (RIAA), which is the architect of the lawsuit, criticized in a prepared statement Napster’s characterization of its users’ activities as “music sharing.” Rosen said, “Napster cannot hide behind its defense that they do little more than provide a service for �sharing,’” Rosen added that “Files are not being shared; they’re being copied and distributed to millions worldwide.” The plaintiffs’ brief elaborates on this argument: “Napster’s opposition uses euphemisms like �sharing’ to avoid the real issue: Napster is a business that already claims a value in the billions, based overwhelmingly on the �piracy’ of millions of plaintiffs’ copyrighted works. The truth is, the making and distributing of unauthorized copies of copyrighted works by Napster users is not �sharing,’ any more than stealing apples from a neighbor’s tree is �gardening.’” Music company representatives July 13 discussed the filing. “The filing today exposes the fallacy in Napster’s latest efforts to justify its infringing business,” said Edward P. Murphy, president and CEO of the National Music Publishers’ Association. “This is not a case about home use of music but about the commercial exploitation of musical works without compensating the people who write and record them. We are confident that the court will appreciate the serious threat that Napster poses to the future of music.” The brief further argues that Napster’s defense is not bolstered by the Supreme Court’s decision in the Sony/ Betamax case — Sony Corp. of America v. Universal Cities Studios, 464 U.S. 417 (1984) — which held that there is no contributory infringement by the makers of a product that has a “substantial non-infringing use.” The brief argues that a directory service like Napster is not analogous to the kind of product that is held non-infringing under that case. NOT PROTECTED UNDER AHRA OR AS �FAIR USE’ Because the Napster directory service does not itself copy files or store copied music files on its servers, it has not been charged with direct copyright infringement. Instead, the theory of the case has been that the service facilitates direct infringement by its users. Napster’s opposition brief argued, therefore, that if most or all of the copying facilitated by its service is not in fact infringement — if it is protected copying under AHRA or under the fair use doctrine — the company cannot therefore be held liable for contributory or vicarious infringement. The plaintiffs’ reply brief responded to this argument with several of its own. First, plaintiffs argued that the sheer volume of copying that occurs through the use of Napster’s directory service, together with the facts that the copying occurs through the Internet and turns each Napster user into a potential worldwide distributor of unlicensed copyrighted works, moves that copying directly into the realm of infringement. “Courts that have examined the issue have all held that the operator of an Internet site offering copyrighted works for download (i.e., distribution and copying) is liable for copyright infringement — and in almost all of those cases, the activity ostensibly was noncommercial,” the brief argues. Since the Napster users are doing the same thing that the Internet sites in other cases have done, the brief analogizes, it follows that Napster may be held liable for contributory or vicarious infringement,” the brief states. Secondly, the plaintiffs argued that the scope of protected copying under the AHRA — as interpreted in the Diamond Rio case — Recording Indus. Ass’n of America v. Diamond Multimedia Sys., 180 F.3d 1072 (9th Cir. 1999) — is much narrower than the defendants have asserted. The full text of Section 1008 of the AHRA, the plaintiffs stated, limits the protections of AHRA in the case of digital music copying to a “digital audio recording device,” and “a general-purpose computer is not a �digital audio recording device.’” Moreover, the plaintiffs contended, even if the AHRA were construed as covering general-purpose computers, its protections apply to the making of copies of copyrighted musical works, not to their distribution. “Congress did not give consumers a license to distribute copies of copyrighted music over the Internet to millions of persons — any more than Congress gave consumers a license to make home copies of copyrighted music and distribute them from a street corner to all comers,” the plaintiffs’ brief argues. Finally, the plaintiffs claimed, the Office of Technology Assessment report quoted in the Napster brief expressly states that making copies available to the public, as distinct from making them available to family and friends, is not the kind of “personal use” that is an exempt use under AHRA. As to the argument that the copying done by Napster users qualifies as “fair use,” the plaintiffs’ brief argues that the balance of fair-use analysis, together with the sheer volume of copying that Napster users engage in, favors a finding that the copying at issue is not fair use. Noting that the Napster brief concedes that the music copied by Napster users is “undoubtedly creative in nature” and that it is copied in its entirety — applying the first two prongs of the standard four-prong fair-use analysis, the plaintiffs argue that case law in the Ninth Circuit holds that “wholesale copying of copyrighted material precludes application of the fair use doctrine.” With regard to the latter two prongs of fair-use analysis — the purpose and character of the use and the effect on the potential market — Napster had stressed the noncommercial character of the copying done by Napster users and had contended that it had no harmful effect on the market for copyrighted works and that it arguably enhanced that market. The plaintiffs disputed both claims in their reply brief. The brief argues, inter alia, that making a copy of a copyrighted work in order to avoid paying for it is itself a commercial use and that this kind of copying is likely to adversely affect the potential market for the copyrighted work. “Napster asserts that some of its users may delete some music files after �sampling’ for possible purchase,” the brief states, adding that “Even if this doubtful proposition were true, that would not be a fair use.” The plaintiffs’ brief also disputed Napster’s argument that “space-shifting” is a “substantial noninfringing use” — the brief cites Nimmer on Copyright for the proposition that “audio taping is almost always done for �librarying’ purposes, and almost never for time-shifting purposes.” NAPSTER NOT STAPLE OF ARTICLE OF COMMERCE Because the Napster company “operates an ongoing service that is widely and overwhelmingly used for infringement — it does not merely manufacture a product like a VCR,” the instant case is distinguishable from cases in which the manufacturers of VCRs were held not to be contributory infringers, the brief claims. The Supreme Court recognized in the Sony Betamax case, the plaintiffs argued, that doctrinal defenses that might apply to a manufacturer of VCRs do not apply where there is “an ongoing relationship between the direct infringer and the contributory infringer at the time the infringing conduct occurs.” In addition, the brief says, because the “overwhelming” use of Napster is to facilitate infringement, Napster cannot escape liability “merely by postulating minimal or incidental uses — particularly where those purported lawful uses are severable from the primary infringing use for which the product is widely used and could continue unaffected by an injunction against the infringing uses.” The plaintiffs further argued that, contrary to what Napster has stated, the Napster company is liable for contributory infringement because it is in fact at least constructively knowledgeable about its users’ infringing copying, and because it “materially contributes” to its users’ infringements, and is not merely an incidental aid to that infringement. Moreover, the brief states, the company is vicariously liable for its users’ infringing copying because it “has the right and ability to supervise the infringing activity,” and because it is “in a position to police the infringing conduct of its users” but has failed to do so. NO COPYRIGHT MISUSE Napster had argued that the plaintiff music companies were engaging in “copyright misuse” by using copyright litigation to protect their market position in a market beyond that of the market for the copyrighted work itself. The plaintiffs’ brief argues, in contrast, that the doctrine of copyright misuse applies only when the copyright holder uses its rights in copyright in an attempt to impose terms in a license agreement to restrain competition beyond the protection of the copyright itself, “or otherwise engages in fraud to obtain copyright protection over materials it did not create.” In the instant case, however, “plaintiffs have simply sought to enforce their copyrights,” the brief states. The plaintiffs’ brief is also dismissive of Napster’s claims that the First Amendment protects its provision of a directory service and cites cases holding that there is no First Amendment defense to copyright infringement, and that “First Amendment concerns are protected by and coextensive with the fair use doctrine.” Because irreparable harm is “presumed” and “is manifest,” the brief argues, and because the balance of hardships “cuts sharply in plaintiffs’ favor,” the preliminary injunction sought by the plaintiffs should be granted. Furthermore, because of the music companies’ likely success on the merits, the plaintiffs say that the court should exercise its discretion and require only a modest bond of plaintiffs.

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