that even if it were “technologically impossible for Napster, Inc. to offer such functions as its
directory without facilitating infringement, the court still must take action to protect plaintiffs’
copyrights.”^1717 On appeal in Napster I, the Ninth Circuit, in a very terse analysis of the First
Amendment issue, simply ruled that “First Amendment concerns in copyright are allayed by the
presence of the fair use doctrine. ... Uses of copyrighted material that are not fair uses are
rightfully enjoined.”^1718
(ii) Copyright Misuse. Napster argued that the plaintiff record labels were
engaged in copyright misuse by attempting to aggrandize their monopoly beyond the scope of
their copyrights by restricting the flow of unsigned artists’ music, which competed with their
own, and by controlling the distribution of music over the Internet. The district court rejected
this argument, concluding that most of the copyright misuse cases involved the attempt to
enlarge a copyright monopoly through restricted or exclusive licensing, and the plaintiffs in the
instant case had granted no licenses to Napster, let alone impermissibly restrictive ones.^1719 On
appeal in Napster I, the Ninth Circuit affirmed the ruling of the district court, finding no evidence
that the plaintiffs sought to control areas outside their grant of monopoly. “Rather, plaintiffs
seek to control reproduction and distribution of their copyrighted works, exclusive rights of
copyright holders.”^1720 In a footnote, however, the Ninth Circuit did note that the copyright
misuse doctrine is not limited entirely to situations of restrictive licensing – “a unilateral refusal
to license a copyright may constitute wrongful exclusionary conduct giving rise to a claim of
misuse, but [we] assume that the ‘desire to exclude others ... is a presumptively valid business
justification for any immediate harm to consumers.”^1721
(iii) Waiver. Napster asserted that the plaintiffs had waived their right to enforce
their copyrights against Napster. Napster introduced evidence that the plaintiffs had known of
the existence of “ripping” software for creating MP3 files for years, and had known that making
MP3 files from CDs was the most prevalent means by which sound recordings became available
for transfer over the Internet in the first place, yet had failed to take any actions to stop or even
slow its widespread proliferation, and indeed had actively formed partnerships with and invested
in companies that directed consumers to MP3 encoding software that would enable them to
transfer music files over the Internet.^1722 The district court responded as follows:
This limited evidence fails to convince the court that the record companies created the
monster that is now devouring their intellectual property rights. Although plaintiffs have
not sued their business partners for contributory infringement, they typically have asked
them to discourage unauthorized ripping and have made security part of their agreements.
Defendant fails to show that, in hastening the proliferation of MP3 files, plaintiffs did(^1717) Napster, 114 F. Supp. 2d at 923.
(^1718) Napster I, 239 F.3d at 1028.
(^1719) Napster, 114 F. Supp. 2d at 923.
(^1720) Napster I, 239 F.3d at 1027.
(^1721) Id. at 1027 n.8 (citing Image Tech. Servs. V. Eastman Kodak Co., 125 F.3d 1195, 1218 (9th Cir. 1997)).
(^1722) Napster’s PI Opp. Brief, supra note 1631, at 22.