## Facts

- Record companies and certain songwriters sued Napster, Inc., alleging widespread unauthorized copying and distribution of copyrighted music by Napster users.
- Napster operated a peer-to-peer MP3 sharing service in which users stored files on their own computers but used Napster’s software and centralized index servers to locate and transfer files.
- Plaintiffs alleged Napster’s system enabled users to download and upload copyrighted songs without authorization and that Napster knew infringement was pervasive.
- Plaintiffs moved for a preliminary injunction in federal district court to stop the exchange of their works through the service.
- The district court found plaintiffs likely to succeed on claims of contributory and vicarious copyright infringement and entered a broad preliminary injunction barring Napster from facilitating copying and distribution of plaintiffs’ works via its service.
- Napster appealed, challenging secondary-liability findings, rejection of defenses (fair use, AHRA, DMCA), and the breadth of the injunction.

## Issues

1. Whether plaintiffs showed a likelihood that Napster was secondarily liable for users’ direct copyright infringement under contributory and vicarious infringement theories.
2. Whether typical user activities on the service (including sampling, space-shifting, and sharing authorized content) were fair use under 17 U.S.C. § 107.
3. Whether the Audio Home Recording Act or DMCA safe harbors shielded Napster from liability on the preliminary-injunction record.
4. Whether the preliminary injunction was overbroad, including whether it improperly placed monitoring and identification burdens on Napster rather than on plaintiffs.

## Decision

- The Ninth Circuit largely affirmed the district court’s determination that plaintiffs showed a likelihood of success on contributory and vicarious infringement.
- The court concluded users directly infringed by reproducing and distributing copyrighted songs through downloading and making files available for download.
- The court held Napster likely had knowledge of infringing activity and materially contributed by providing the indexed system that enabled users to find and copy files.
- The court held Napster likely had the right and ability to supervise user infringement and received a direct financial benefit from infringement-driven growth.
- The court rejected Napster’s fair use arguments on the preliminary-injunction record.
- The court rejected AHRA protection and found the asserted DMCA safe-harbor defenses unavailing given Napster’s centralized indexing and control features.
- The court vacated and remanded the injunction for modification, directing narrowing tied to notice and allocating the initial identification burden to plaintiffs, with Napster required to act expeditiously after actual notice.

## Legal Principles

- Contributory infringement may be found where a defendant, with knowledge of infringement, induces, causes, or materially contributes to another’s infringing conduct.
- Knowledge can be shown by actual or constructive awareness of substantial infringement, and material contribution may be shown by providing the “site and facilities” that enable infringement.
- Vicarious infringement requires the right and ability to supervise infringing conduct and a direct financial interest in the infringing activity.
- A service cannot avoid secondary liability under the substantial-noninfringing-use doctrine where the record shows predominant infringing use combined with knowledge and ongoing facilitation of specific infringing activity.
- Typical peer-to-peer downloading and uploading of complete songs is unlikely to be fair use where it is nontransformative, involves copying entire works, and harms actual or potential markets for the copyrighted works, including emerging digital markets.
- Preliminary injunctive relief against an intermediary must be tailored; plaintiffs must identify infringing material with specificity, and the intermediary’s duty to act must be tied to actual knowledge or specific notice.

## Conclusion

The Ninth Circuit held that the record supported a strong likelihood that Napster was contributorily and vicariously liable for users’ direct infringements and that Napster’s defenses did not defeat preliminary relief, but it required the injunction to be narrowed to place the initial burden of identifying infringing works on plaintiffs and to link Napster’s compliance duties to actual notice or knowledge.


A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001)