Advanced Copyright Law on the Internet

Mar. 5 modified injunction. Its opinion in the consolidated appeals is discussed in subsection 17
below.

16. Napster’s Motions to Dismiss the Complaints of the Independent Artists and
    AMPAS. While the consolidated appeals were pending, Napster filed a motion to dismiss the
    complaints of various independent artists and labels and of AMPAS for failure to state a claim.
    Napster based its motion on the Ninth Circuit’s opinion in Napster I, which Napster argued
    fundamentally altered copyright liability in the online context.^1749 Napster framed the basis for
    its motion as a pure question of law – whether notice is an element of contributory and vicarious
    copyright infringement – and rested the motion on the following two arguments:

First, Napster contends that [Napster I] held that the traditional formulation of

constructive knowledge for contributory infringement does not apply in the digital

realm. Instead, copyright liability may only be imposed when a computer service

provider has actual knowledge of specific infringing files. Second, Napster

believes that the Ninth Circuit held that notice is a required element for both

contributory and vicarious infringement. This notice, Napster contends, must be

provided (1) by plaintiffs (2) prior to suit and (3) must list specific infringing

files. Additionally, Napster reads [Napster I] to limit liability for contributory and

vicarious infringement to cases in which after receiving notice, Napster fails to

disable the infringing material. Simply put, Napster believes that the Ninth

Circuit carved out a special niche in copyright law for computer service

providers.^1750

In response, the district court ruled that “there is a simple answer to Napster’s ‘pure
question of law.’ There is no requirement that plaintiffs allege that they provided notice of
specific infringing works prior to filing suit. The court agrees that computer system operators
cannot be held liable for secondary copyright liability based solely on the transmission of
unidentified (and unidentifiable) material through a computer system. To do otherwise would
violate the basic tenet of Sony. However, according to plaintiffs’ complaints, Napster has gone
far beyond simply providing a peer-to-peer file sharing system; it has engaged in music piracy of
magnificent proportions.”^1751 Accordingly, the court concluded that the plaintiffs had
sufficiently pleaded the elements of contributory and vicarious infringement, and denied
Napster’s motion.^1752

The court based its conclusions on various significant interpretations of the Napster I
opinion with respect to contributory and vicarious liability. With respect to contributory
liability, the court noted that under Napster I, the secondary infringer must “know or have reason
to know” of the direct infringement; “[a]ctual knowledge is not required; a defendant may

(^1749) Fonovisa v. Napster, Inc., 2002 U.S. Dist. LEXIS 4270 at 11 (N.D. Cal. Jan. 28, 2002).
(^1750) Id. at 11-12.
(^1751) Id. at 38-39 (emphasis in original).
(^1752) Id. at 39.