The district court rejected this argument, ruling that Napster’s reliance on the Diamond
decision was erroneous because that was “a case involving an inapplicable statute [the
AHRA].”^1665 The court also rejected any implication that space-shifting was sufficiently
analogous to the time-shifting of television broadcasts that the Supreme Court found to be a
substantial noninfringing use in Sony. In particular, the court ruled that in Sony, the Supreme
Court had determined that time-shifting represented the principal, rather than an occasional use
of VCRs, whereas Napster had failed to show that space-shifting constituted a “commercially
significant” use of Napster. “Thus, even if space-shifting is a fair use, it is not substantial
enough to preclude liability under the staple article of commerce doctrine.”^1666
On appeal in Napster I, the Ninth Circuit agreed with the district court that the “shifting”
analyses of both Sony and Diamond were inapposite because “the methods of shifting in these
cases did not also simultaneously involve distribution of the copyrighted material to the general
public; the time or space-shifting of copyrighted material exposed the material only to the
original user.”^1667
- Authorized Distributions. Napster argued that many artists had authorized
distributions of their works through the Napster system, and that such authorized uses constituted
substantial noninfringing uses under Sony. Napster set up a “New Artist Program,” pursuant to
which new or unsigned artists could promote their works and distribute them in MP3 format via
the Napster service. Napster accepted enrollment of new artists in its program only if the artist
explicitly authorized Napster users to share the artist’s music.^1668 The district court, however,
held that “the New Artist Program may not represent a substantial or commercially significant
aspect of Napster,”^1669 essentially ruling that it had been an afterthought: “[T]he court finds that
the New Artist Program accounts for a small portion of Napster use and did not become central
to defendant’s business strategy until this action made it convenient to give the program top
billing. An early version of the Napster website advertised the ease with which users could find
their favorite popular music without ‘wading through page after page of unknown artists.’
Defendant did not even create the New Artist Program that runs on its Internet website until
April 2000 – well after plaintiffs filed this action.”^1670
In any event, the court concluded that, because it believed the activity under the New
Artist Program to be separable from the infringing activity of the unauthorized distribution of the
plaintiffs’ works, the New Artist Program was insufficient to save Napster under the Sony
(^1665) Napster, 114 F. Supp. 2d at 915.
(^1666) Id. at 916.
(^1667) Napster I, 239 F.3d at 1019.
(^1668) Napster, 114 F. Supp. 2d at 907.
(^1669) Id. at 917. It is unclear why the court used the term “may,” since that leaves open the possibility that the New
Artist Program might constitute a substantial or commercially significant aspect of Napster, which in turn would
affect the analysis under the Sony doctrine.
(^1670) Id. at 904 (citations omitted). One of plaintiffs’ experts submitted results of a sample of 1150 files on the
Napster service, in which were contained only 11 new artists and 14 of their music files. Id.