Advanced Copyright Law on the Internet

The district court, in a terse analysis of the AHRA in a footnote, rejected the argument
that Section 1008 of the AHRA immunized the actions of Napster’s users for two reasons. First,
the court ruled that the “AHRA is irrelevant to the instant action” because “[n]either the record
company nor music publisher plaintiffs have brought claims under the AHRA.”^1642 Second, the
court labeled the passage from Diamond quoted above and cited by Napster as “dicta” and found
it to be “of limited relevance”:

The Diamond Multimedia court did opine that making copies with the Rio to

space-shift, or make portable, files already on a user’s hard drive constitutes

“paradigmatic noncommercial personal use entirely consistent with the purposes

of the Act [i.e. the facilitation of personal use].” However, this dicta is of limited

relevance. Because plaintiffs have not made AHRA claims, the purposes and

legislative history of the AHRA do not govern the appropriateness of a

preliminary injunction against Napster, Inc. Furthermore, as explained below, the

court is not persuaded that space-shifting constitutes a substantial, noninfringing

use of the Napster service. The Ninth Circuit did not discuss the fair use doctrine

in Diamond Multimedia.^1643

On appeal in Napster I, the Ninth Circuit affirmed the conclusion that the AHRA did not
immunize the activities of Napster users in sharing audio files, although on a different rationale
from the district court. The Ninth Circuit did not endorse the district court’s rationale that the
AHRA was inapplicable merely because the plaintiffs had not brought claims under the AHRA.
Instead, the Ninth Circuit cited its rulings in Diamond that computers and their hard drives are
not “digital audio recording devices” and that computers do not make “digital musical
recordings,” as those terms are defined in the AHRA. Accordingly, the AHRA does not cover
the downloading of MP3 files to computer hard drives.^1644

3. The Fair Use Doctrine Generally. Napster also contended that its users did not
   directly infringe plaintiffs’ copyrights because the users were engaged in a noncommercial, fair
   use of the materials. The district court rejected this argument, ruling that the downloading of
   musical recordings through Napster did not qualify generally under the four fair use factors.
   With respect to the first factor – the purpose and character of the use – the district court held that
   downloading MP3 files was not transformative and, although Napster did not charge for its
   service, was commercial in nature:

Although downloading and uploading MP3 music files is not paradigmatic

commercial activity, it is also not personal use in the traditional sense. Plaintiffs

have not shown that the majority of Napster users download music to sell – that

is, for profit. However, given the vast scale of Napster use among anonymous

Colorado Public Interest Research Group, 426 U.S. 1, 7 (1975); Ozawa v. United States, 260 U.S. 178, 194

(1922). Napster’s PI Opp. Br., supra note 1631, at 8 n.8.

(^1642) Napster, 114 F. Supp. 2d at 915 n.19.
(^1643) Id. (citations omitted; emphasis in original).
(^1644) Napster I, 239 F.3d at 1024-25.