This document summarizes a legal briefing about the Napster peer-to-peer file sharing service. It discusses how Napster was sued for copyright infringement in 2000 by record labels including Metallica and Dr. Dre. The document outlines the plaintiffs' and defendants' arguments in the case. It describes how the district court found Napster liable and issued an injunction, which was later affirmed by the Ninth Circuit Court of Appeals. Napster was eventually shut down in 2001 due to this legal action.

1. NAPSTER Business Law Briefing Shannon Brown Robyn McGonigle Erika L. LaMarch Christine Pedicone Kelly Ann Baker 29 November 2006

2. Introduction Shannon Brown Background Robyn McGonigle Plaintiff Case Erika L. LaMarch Defendants Case Christine Pedicone Outcome Kelly Baker Impact

3. Background Napster An online music service which was originally a file sharing service. First widely-used peer to peer music sharing service made a major impact on how people used the Internet Invented by Sean Fanning in June of 1999 Some other forms of music file sharing are: Bear Share Kazaa Limewire

4. Background In 2000 Napster was first sued by Dr. Dre and heavy metal band Metallica Napster unlawfully released songs onto the internet before the artists had even released them It was said that Napster was destroying the music industry

5. Technology 1987 MPEG-3 by Moving Picture Experts Group Ripping Computer CD MusicShare linkage through the internet

6. Issue Is peer to peer file transfer infringement? Fact Industry data for CD’s since before and after Napster’s inception.

7. Introduction Shannon Brown Background Robyn McGonigle Plaintiff Case Erika L. LaMarch Defendants Case Christine Pedicone Outcome Kelly Baker Impact

8. Prosecutors Facts Case Law: Fonovisa Incorporated vs. Cherry Auction Incorporated Decision: one cannot sell copied recordings at a flea market. Direct Infringement through reproducing and distributing copyrighted material Does RIAA vs. Diamond Multimedia Systems Inc. provide that; “ Napster was designed for the purpose of facilitating piracy, and…it’s users are using its service overwhelmingly to trade MP3 files.” RIAA point: Napster’s link to music provides “substantial ongoing control.”

9. Plantiffs motion for preliminary injunction against Napster Inc. was granted Plantiffs ordered to cooperate with defendant in identifying works to which they own copyrights. Plantiffs ordered to post bond for sum of $5,000,000.00 to compensate defendant for its losses in event this injunction is reversed or vacated

10. On December 6 th 1999 A&M records and 17 other companies filed a complaint for contributory and vicarious copyright infringement, and unfair competition. On January 07 2000 Jerry Lieber, Mike Stoller, and Frank Music Corporation filed a complaint for vicarious and contributory copyright infringement on behalf of a punitive class of similarly situated music publishers.

11. Out of sampling of Napsters data the plantiffs showed that 87 percent of 1,150 songs picked from Napster was under copyright and more than 70 percents of the 1,150 songs belonged to the plantiffs.

12. Plantiffs do not receive royalties when a song is downloaded from Napster Inc. Also, napster has a unfair competition advantage over those companies who had intended to or already had gone into the market mp3 downloads. These companies include A&M Records, UMG Records, Universal Records

13. Introduction Shannon Brown Background Robyn McGonigle Plaintiff Case Erika L. LaMarch Defendants Case Christine Pedicone Outcome Kelly Baker Impact

14. Defendant’s Facts Sony Corporation of America vs. Universal City Studios Incorporated Taping TV programs is noninfringing AHRA Audio Home Recording Act Personal use of digital copies Defense: Fair use definition Every search engine could be liable “ [providing a link] is not enough to render the provider of the link contributorily liable for the content at the linked location”

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16. Agenda Shannon Brown Background Robyn McGonigle Plaintiff Case Erika L. LaMarch Defendants Case Christine Pedicone Outcome Kelly Baker Impact

17. Decision Ninth court Judge Marilyn Hall Patel of the Northern District of California Supports RIAA vs. Diamond Multimedia Systems Inc. Found the defense’s use of case law to be, “perplexing”, “irrelevant”, and “explicitly excluding PCs”. Refers to Copyright Law statutes in response to Fair Use definition. Disapproves of the centralized search Napster’s linking service is found indirectly infringing District Court finds direct infringement by Napster’s users Preliminary court moves for injunction to stop the transfer of music. Ninth Circuit affirmed preliminary court’s decision

18. Background In July 2001, Napster shut down its entire network in order to comply with an injunction filed in March 2001 Napster agreed to pay music creators and copyright owners $26 million settlement for past They also paid $10 million dollars against future licensing royalties

19. Overview Napster received a Notice of Motion and Motion for Summary Judgment on Liability and Willfullness from the record company Later they filed that Napster failed to comply with the court order Napster appealed and filed a motion for stay This was denied in the appellate court

20. Agenda Shannon Brown Background Robyn McGonigle Plaintiff Case Erika L. LaMarch Defendants Case Christine Pedicone Outcome Kelly Baker Impact

21. Music Industry Scour.com provides videos and music and is simultaneously sued by Motion Picture Association of America in Southern District of New York. Industry sales in CD shares due to Napster plummeted Other music sites emerge: Limewire Kazaa Grokster iPod Radio Stations allow listeners to download songs for 99 cents

22. Napster’s Current Standings Music licensed from 2 million record companies Publicly traded on NASDAQ as NAPS ticker symbol Currently 145 Employees Formerly called Roxio 500,000 subscribers Competition Apple RealNetworks

24. For more information contact us Shannon Brown [email_address] Robyn McGonigle [email_address] Erika L. LaMarch [email_address] Christine Pedicone [email_address] Kelly Baker [email_address]

25. References “ Napster’s Last Stand?” by Alan Sutin and Wayne Josel www.hoovers.com/napster/--ID__102418--/free-co-factsheet.xhtml “ Ninth Circuit Upholds Napster Injunction, Narrows Scope Slightly” by Aspen Publishers

26. QUESTIONS