On Mar. 19, 2002, the lawsuits against the Aimster service, which was subsequently
renamed “Madster” after a trademark dispute with AOL, were placed on hold after BuddyUSA
and AbovePeer filed for bankruptcy. On June 20, 2002, the bankruptcy judge lifted the
automatic stay of the lawsuits to the extent necessary to allow the record companies to pursue a
preliminary injunction against the service in the federal district court in Chicago.^1811 About three
months later, the district court ruled that the plaintiffs were entitled to a preliminary injunction
on grounds of contributory and vicarious liability.^1812 Aimster appealed.
The Seventh Circuit, per Judge Posner, affirmed the issuance of the preliminary
injunction, finding that Aimster was likely liable as a contributory infringer.^1813 The bulk of the
court’s opinion was devoted to an analysis of the scope of the Supreme Court’s “substantial
noninfringing use” doctrine in the Sony case, on which Aimster relied heavily for its defense.
Judge Posner seems to have significantly reinterpreted that doctrine using a classic “Chicago
school” law and economics analysis. (The viability of Judge Posner’s interpretive approach to
Sony’s “substantial noninfringing use” doctrine, whether or not it led to the correct substantive
outcome, is at best dubious after the Supreme Court’s Grokster decision discussed in Section
III.C.2(c)(5) below.^1814 )
He began the analysis by noting that Sony’s Betamax video recorder was used for three
principal purposes – time shifting (recording a television program for later viewing), library
building (making copies of programs to retain permanently), and commercial skipping (taping a
program before watching it and then, while watching the tape, using the fast-forward button on
the recorder to skip over the commercials).^1815 He noted that the Supreme Court held the first
use to be a fair use because it enlarged the audience for the program, but went on to note, in
dicta, that the second and third uses were “unquestionably infringing” – the second because “it
was the equivalent of borrowing a copyrighted book from a public library, making a copy of it
(^1811) “Judge: Record Companies Can Pursue Injunction Against Madster” (June 21, 2002), available as of June 21,
2002 at http://www.siliconvalley.com/mld/siliconvalley/news/editorial/3511564.htm.
(^1812) In re Aimster Copyright Litigation, 252 F. Supp. 2d 634, 665 (N.D. Ill. 2002). The district court also rejected
Aimster’s argument of a defense under the AHRA. The court first ruled that Aimster’s users were plainly
engaged in direct copyright infringement and that the AHRA did not provide an affirmative defense to the
users’ acts of direct copying. Invoking the Ninth Circuit’s Diamond Multimedia decision, discussed extensively
in Section III.C.2(c)(1).2 above, Aimster argued that the AHRA immunized all noncommercial copying by
consumers of digital and analog musical recordings. The district court rejected this argument, distinguishing
Diamond Multimedia on the grounds that in that case users were merely space shifting files from their hard
drives to a portable digital device for their own personal use. By contrast, the Aimster service involved the
copying of MP3 files from one user’s hard drive onto the hard drive of another user, and such massive,
unauthorized distribution and copying of the plaintiffs’ works was not within the scope of the AHRA. Id. at
648-49.
(^1813) In re Aimster Copyright Litigation, 334 F.3d 643 (7th Cir. 2003), cert. denied, 124 S. Ct. 1069 (2004).
(^1814) See Mitchell Zimmerman, “Grokster Seems Unlikely to Prevent File Sharing by Itself,” The Daily Journal (Aug
15, 2005); earlier version available online in Fenwick & West’s IP Bulletin (Fall 2005), p. 3, at
http://www.fenwick.com/docstore/Publications/IP/IP_bulletins/IP_Bulletin_Fall_2005.pdf#xml=http://www.fenwick.com/p
ublications/indices.asp?cmd=pdfhits&DocId=115&Index=C%3a%5cdtindex%5cwebsite%5cIP&HitCount=4&hits=632+10
de+1109+11a3+&hc=143&req=Zimmerman.
(^1815) Id. at 647.