Napster Inc. Defends Peer-to-Peer File Sharing

Brief Contends that District Court's Findings of Fact and Law Are Erroneous and Injunction Should be Vacated

REDWOOD CITY, CA - August 18, 2000 Napster, Inc., the world's largest file sharing community, today asked the U.S. Court of Appeals for the 9th Circuit to reverse the District Court and vacate the preliminary injunction entered against the company on July 26, 2000. Napster argued that the District Court misinterpreted statutory and judicial precedent in issuing an overbroad injunction with far reaching implications for technological innovation. Napster's 79- page brief cited numerous errors of fact and law, any of which would justify a reversal allowing the Napster Internet user community to continue sharing music while the merits of the case are determined at a trial or until a settlement is reached.

"We believe that the District Court simply did not understand the Napster technology and how it is used by the Napster community," said Hank Barry, Napster's CEO. "The court disregarded the studies that show Napster users increase their CD purchases, and that they use Napster to enjoy MP3 and WMA copies of music they already own in other formats and to sample music before deciding what to buy."

The brief states that the "court resolved several issues of first impression against Napster in favor of the record industry, and in a way that limits the exchange over the Internet of information that could indisputably be lawfully exchanged in other ways. The court resolved other important issues contrary to prior opinions in this and other circuits, contrary to recent statements by this Court (which the court below considered 'dicta'), and contrary to principles articulated in controlling Supreme Court precedent."

The brief challenged the sweeping scope of the injunction, which would have forced an immediate shutdown of the company, saying, "The decision of the District Court imposed an injunction of unparalleled scope. The District Court ordered Napster to redesign its technology in a way that deprived Napster's users and the 98% of artists Plaintiffs do not represent of Napster's revolutionary peer-to-peer Internet technology. It ordered Napster to do so without determining that any such redesign was actually feasible (it is not) and without consideration of the detriment to functionality that even theoretical redesign would impose."

Specifically, the brief contends that the court erred in the following ways:

By holding that the Audio Home Recording Act ("AHRA") did not apply to the case;

By denying non-commercial copying the protection of the AHRA solely because of the potential scale permitted by the Internet;

By misapplying the Supreme Court's governing Sony standard, under which Napster should not be held contributorily or vicariously liable for copyright infringement because, among other reasons, the software and directory are capable of, and are already being used for, several substantial non-infringing uses;

By holding Napster liable for unauthorized copying by users of the service when Napster as an Internet service provider has only general knowledge that copyrighted works are available through its service and neither specific knowledge nor the ability to differentiate between infringing and non-infringing uses of its system;

By failing to afford Napster the protection to which it is entitled under the safe harbor provision of § 512 of the Digital Millennium Copyright Act ("DMCA"), which protects an ISP against claims of vicarious or contributory liability where the ISP timely responds to notices of alleged copyright infringements to bar access to the identified location of the infringing material;

By committing a variety of evidentiary-related errors, including improperly imposing on Napster the burden of proof as to the validity of affirmative defenses and thereby resolving any uncertainty in evidence in Plaintiffs' favor, which the District Court compounded by declining Napster's request for an evidentiary hearing;

By imposing an unprecedented, unfair, and overbroad remedy that is in fact the first time any U.S. federal court has ever forced the provider of a technology with substantial non-infringing uses to redesign its technology. To comply with the judge's ruling, Napster would have to create a centralized database, thus eliminating the entire value of the peer-to-peer technology.

"Sony holds that courts should defer to Congress to address technological developments that involve the application of copyright law, and Congress specifically intended the Audio Home Recording Act to cover non-commercial copying of music regardless of scale," said David Boies, counsel for Napster, Inc. "If this injunction is allowed to stand, the precedent would impede the development of a wide range of new technologies."

About Napster
Napster is the world's leading file-sharing community. Napster's software application enables users to locate and share media files from one convenient, easy-to-use interface. It also provides media fans a vehicle to identify new artists and a forum to communicate their interests and tastes with one another via instant messaging, chat rooms, and Hot List user bookmarks.