same facts would be inadequate in proving the precise amount of damages. And fourth, Judge
Patel had acknowledged in Fonovisa that broader readings of Napster I were possible, but absent
a compelling reason to do so, she was unwilling to read more into it than it stated.^2004
Judge Patel then turned to an analysis of the Grokster decision. She noted that the Ninth
Circuit’s opinion in Grokster had read Napster I more expansively than she had anticipated in
Fonovisa, reading Napster I to mean that if a defendant could show that its product was capable
of substantial or commercially significant noninfringing uses, then constructive knowledge of the
infringement could not be imputed. Judge Patel noted that the Supreme Court rejected the Ninth
Circuit’s ruling, and that taken as a whole, the Supreme Court’s decision provided for liability
under broader circumstances than those permitted under Napster I. She noted that the evidence
stressed by the Supreme Court, particularly the defendants’ advertising and marketing strategies
- was strikingly similar to the evidence supporting her finding of constructive knowledge in
shaping her original, more sweeping injunction in the Napster case.^2005
The defendants argued that the Grokster ruling could not be applied retroactively to the
current case to render actionable conduct that conformed to the modified preliminary injunction
entered following Napster I, a closed case that was no longer on direct review. Judge Patel
rejected this argument, noting that Bertelsmann was a different party than Napster, and the
instant action was not the same as the now-closed original Napster lawsuit. Bertelsmann was
alleged to be separately liable based on its own control over the operation of the Napster system,
even if its liability were factually derivative of the same alleged acts of illegal copying by
Napster. Accordingly, the court ruled that the plaintiffs were entitled to pursue recovery under
the Grokster theory of liability, which did not require actual or even reasonable knowledge of
specific infringing files, as well as under the “reasonable knowledge” standard articulated in
Napster I.^2006 Accordingly, she denied the defendants’ motion for summary judgment.^2007
(9) Arista Records v. Lime Group(For a discussion of contributory liability in this case, see Section III.C.4(d) below.)(d) The CoStar CaseIn CoStar v. Loopnet,^2008 discussed in detail in Section III.C.6(b)(1)(iii) below, the court
addressed in some detail the knowledge an OSP must have of infringing activity in order to be
liable for contributory infringement. In brief summary, the plaintiff argued that once it gave the
OSP notice of specific infringements on its system, the OSP was on notice that ongoing
infringements were occurring and had a duty to prevent repeat infringements in the future. The
court ruled that the amount of policing for future infringements the OSP would be required to do
(^2004) Id. at 24-27.
(^2005) Id. at 27-30.
(^2006) Id. at 31-32.
(^2007) Id. at 33.
(^2008) 164 F. Supp. 2d 688 (D. Md. 2001), aff’d, 373 F.3d 544 (4th Cir. 2004).