A&M Records, Inc. vs. Napster, Inc.
Napster, a small internet based group located in San Mateo, California, was sued by A&M Records, Inc. It was decided by the Ninth Court of Appeals on February 12th of 2001 that Napster, committed repeated copyright infringements. Napster provided its users with music sharing software that was able to connect users, and allow them to share files between each other. This software logged when users would come online, and when they would submit a query through Napster’s servers. When they submitted a query, they could connect to a person’s computer, and copy the file in question onto their own computer. The downloading of each of these files opened Napster up to be sued by A&M Records, Inc by way of copyright infringement.
This particular case is probably one of the most famous P2P (peer to peer) cases in the last several years. This is said to be the first case involving copyright infringement through peer to peer networking. Prior to this case, there had been no examples to be followed by the court, and they had to assess the situations appropriately to come to a decision.
The most basic issue of this case is whether or not Napster is committing copyright infringements. In order to come to a decision, the court had to look at the Fair Use clause, the Audio Home Recordings Act (AHRA) of 1992, and the Digital Millennium Copyright Act (DMCA). Though all of these were brought into consideration, the court focused greatly on the four main factors of Fair use which are:I. The purpose of the useII. The nature of the work being usedIII. The amount of the work usedIV. The effect of the use on the market for or value of the original work.
On these four factors the court decided:The Purpose of the Use The court found two main reasons that this case does not favor fair use. The court said the use of the music was not “transitive,” and the users of Napster’s software stood to gain a “commercial” benefit. Transformative use has to deal with whether or not the original work is transformed into a new work of new utility. With respect to this case, changing the format of a copyrighted work from one medium to another does not constitute that work being transformative. For example, changing a file on a CD-ROM to a computer readable MP3 file, is not transformative. The court also concluded with respect to “commercial use” that the downloading of all of these copyrighted files was both “repeated,” and “exploitative”. Thus dismissing the peer to peer sharing of these files under the purpose of use section of Fair Use. The Nature of the Work Being Used It was decided by the court that this factor made little to no difference on the final decision. They found that the musical works were creative in nature, and thus the downloading of these works was not found to be fair use. The Amount of Work Used It was stated by the court that Napster users were engaging in “wholesale copying” of entire works. This relates to the fact that users of Napster’s software are effectively copying all of the work used and are again not protected by fair use. The Effect of the Use on the Market for or Value of the Original Work The court decided that the use of Napster’s software does two things. Firstly, it makes a loss of sales of compact discs in the music industry. Secondly, this makes the barrier of entry into the music industry more difficult. Not only were current sales in the industry hurt by Napster’s software, but it was (correctly) foreseen that future sales would also be impacted by copyright infringement.
This court case is very significant in the fact that it paved the way for copyright infringement cases with peer to peer networking. This was the very first case in the matter, and since then, law regarding these cases has evolved and changed significantly. In this case it was apparent that Napster was facilitating copyright infringement, and it did not fall under the category of fair use. There were also way too many people using Napster’s service to be able to sue each and every one of them. Because of this, Napster was a large target for record companies, and therefore, Napster was held liable for these infringements. Napster was eventually forced to pay out damages to many record companies, and eventually filed for bankruptcy. Napster was taken out of the file sharing world, but other programs and P2P systems began to emerge creating a massive network of peer to peer connections.