notice and which Napster failed to remove from its system. The Plaintiffs disputed the
defendants’ reading of Napster I, and also argued that Judge Patel’s holding in Fonovisa, Inc. v.
Napster, Inc.^1996 and the Supreme Court’s Grokster decision firmly established that actual notice
is not required. The defendants argued that the ultimate holding of Napster I, however it might
have been called into question by the Grokster case, with respect to the degree of Napster’s
liability was binding in the instant litigation.^1997 To adjudicate the contentions of the plaintiffs
and the defendants, Judge Patel revisited the Napster I, Fonovisa v. Napster, and Grokster
decisions in detail.
Turning first to the Napster I decision, the court noted that the Ninth Circuit’s rulings
with respect to the standard of knowledge required – actual versus constructive – were
confusing. The Ninth Circuit began its opinion by noting that Napster had both actual and
constructive knowledge of direct infringements committed through the Napster system. But then
the Ninth Circuit’s opinion abruptly shifted when it quoted language from the court’s opinion in
the Netcom case to the effect that evidence of actual knowledge of specific acts of infringement
is required to hold a computer system operator liable for contributory copyright infringement.^1998
Judge Patel noted that the Ninth Circuit’s discussion of the Netcom case was confusing in
several respects. First, the Ninth Circuit’s opinion stated at least two formulations of the level of
knowledge required for infringement, suggesting alternately that actual knowledge was required
and that it was sufficient. Second, the Ninth Circuit’s opinion did not explicitly discuss
constructive knowledge as an alternate basis for liability. Judge Patel noted, however, that
focusing on the Ninth Circuit’s own formulations of the legal standard, and not on the quote
from the Netcom decision, it would be possible to read the first half of Napster I as upholding
Judge Patel’s findings on both actual and constructive knowledge and affirming liability on both
bases.^1999
However, Judge Patel noted that the portion of the Ninth Circuit’s opinion modifying the
scope of her preliminary injunction presented a second discontinuity in reasoning. The Ninth
Circuit set forth a three factor test defining the boundary of Napster’s contributory liability:
Napster could be liable to the extent it (1) received reasonable knowledge of specific infringing
files with copyrighted works, (2) knew or should have known that such files were available on
the Napster system, and (3) failed to act to prevent viral distribution of the works. The
references to “reasonable” knowledge and “should have known” of the availability of infringing
files again suggested a constructive knowledge standard.^2000
Nevertheless, the Ninth Circuit went on to formulate guidelines for the narrowing of the
injunction. First, the Ninth Circuit placed the burden on the plaintiffs to provide notice to
(^1996) 2002 U.S. Dist. LEXIS 4270 (N.D. Cal. Jan. 28, 2002).
(^1997) In re Napster, Inc. Copyright Litigation, 2002 U.S. Dist. LEXIS 4270 at 13.
(^1998) Id. at 14-16.
(^1999) Id. at 19.
(^2000) Id. at 19-20.