NOTICE OF MOTION AND MOTION 1
MEMORANDUM OF POINTS AND AUTHORITIES 2
ISSUES TO BE DECIDED 2
INTRODUCTION 2

STATEMENT OF FACTS 3
  1. Background Of Napster And MP3 File Format. 3
  2. The Operation Of The Napster Software And System. 4
  3. Napster’s Copyright Compliance Policy. 5

LEGAL STANDARDS GOVERNING THIS MOTION 7
  1. The Standards For Summary Adjudication. 7
  2. The Provisions of 17 U.S.C. § 512. 8

ARGUMENT 11
  I. NAPSTER’S BUSINESS ACTIVITIES FALL WITHIN THE PROVISIONS OF THE SECTION 512(a) SAFE HARBOR. 11
     A. Napster Meets All Of The Specific Requirements Of The Section 512(a) Safe Harbor. 11
        1. The transmission of material in the Napster system is always initiated by a Napster user, and not by Napster. 11
        2. The transmission is carried out through an automatic technical process, and Napster does not select the material to be transmitted. 12
        3. Napster does not select the recipients of the material transmitted. 12
        4. No copy of the material is made by Napster in the course of transmission. 13
        5. The material is transmitted by Napster’s system without modification of its content. 13
    B. Napster Is A “Service Provider” Under 17 U.S.C. §§ 512(k)(1)(A) And 512(a). 13
        1. Computer network communications inherently require address information to complete the process of routing, transmissions and connections. 15
        2. The Napster system’s provision of an address for the transmission of information, delivered at the user’s request, is an integral part of transmission, routing, and providing connections. 16
    C. Napster Meets All Of The Conditions For Eligibility Found In 17 U.S.C. § 512(i). 18
    D. Application Of The DMCA To Napster’s Activities Is Consistent With Federal Internet Policy. 20

  II. BECAUSE THE SECTION 512(A) SAFE HARBOR APPLIES TO NAPSTER’S ACTIVITIES, PLAINTIFF’S REMEDIES (IF ANY) ARE LIMITED TO THE NARROW INJUNCTION SPECIFIED BY SECTION 512(J)(1)(B).

CONCLUSION 22

LAURENCE F. PULGRAM (CSB #115163)
MICHAEL A. SANDS (CSB # 178788)
MATTHEW D. HINKS (CSB #200750)
FENWICK & WEST LLP
Two Palo Alto Square
Palo Alto, California 94306
Telephone:  (650) 494-0600
Facsimile:  (650) 494-1417

DAVID L. HAYES (CSB #122894)
FENWICK &WEST LLP
275 Battery Street, Suite 1500
San Francisco, CA 94111
Telephone:  (415) 875-2300
Facsimile:  (415) 281-1330
Attorneys for Defendant NAPSTER, INC.

TO PLAINTIFFS AND THEIR ATTORNEYS OF RECORD:

 NOTICE IS HEREBY GIVEN that on March 13, 2000, at 2:00 p.m., or as soon thereafter as this matter may be heard, in the United States District Court, Northern District of California, located at 450 Golden Gate Avenue, San Francisco, in the courtroom of the Honorable Marilyn H. Patel, defendant Napster, Inc. (“Napster”) will, and hereby does, move this Court for entry of an Order granting summary adjudication, pursuant to Fed. R. Civ. P. 56, in favor of Napster on the issue of the application of the first statutory safe harbor provision found in the Digital Millennium Copyright Act at 17 U.S.C. § 512(a) and limiting the remedies available to Plaintiffs (if any) accordingly.

As grounds for this motion, as set forth more fully in the Memorandum of Points and Authorities filed herewith, Napster states that it is a “service provider” as defined in 17 U.S.C. § 512(k)(1)(A), has complied with the conditions for eligibility found in 17 U.S.C. § 512(i), and meets the remaining requirements stated in 17 U.S.C. § 512(a).  Napster as a whole, and its various services in particular, are therefore covered by the “safe harbor” provision of 17 U.S.C. § 512(a), and cannot give rise to liability for any monetary, injunctive or other equitable relief (except as narrowly specified in 17 U.S.C. § 512(j)) for infringement of copyright as alleged in Plaintiffs’ Complaint.

 Napster’s motion is based upon this Notice of Motion and Motion, the Memorandum of Points and Authorities appended hereto, the Declaration of Edward Kessler filed herewith, Request for Judicial Notice filed herewith, other materials identified herein, such other oral or written submissions as the Court shall entertain, and upon the papers and pleading filed in this matter.

 1. Whether the first “safe harbor” provision of the Digital Millennium Copyright Act (“DMCA”), 17 U.S.C. § 512(a), applies to Napster’s activities as alleged in the Plaintiffs’ Complaint such that they cannot give rise to liability for monetary damages or injunctive relief (other than as narrowly defined in section 512(j)(1)(B)) for alleged federal copyright violations.

In 1998, Congress passed the DMCA, thereby establishing statutory “safe harbors” to protect service providers doing business on the Internet from monetary damages and all but the narrowest of injunctions for the potentially infringing conduct of Internet users.  The DMCA embodies a clear Congressional intent to place the obligations of compliance with copyright restrictions on Internet users themselves, consistent with the enhancement of individual expression and freedom of information that an open Internet allows.

The DMCA consciously limits the liability of companies that, by virtue of providing Internet services, merely facilitate the potential transmission by others of copyrighted materials.  The DMCA also explicitly places the burden of policing potential copyright violations squarely on those claiming the copyright monopoly, providing obligations of notice on such rightsholders, and obligations to respond to such notices on service providers.  Indeed, the DMCA itself states, in a subsection entitled “Protection of privacy,” that a service provider is not required to engage in “monitoring its service or affirmatively seeking facts indicating infringing activity . . .” in order to claim protection under the DCMA safe harbors.  17 U.S.C. § 512(m)(1) (emphasis added).

These policies implement an express Congressional intent to expand the variety and quality of Internet services, and to protect service providers from liability for acts of those who deploy their services.  As Congress recognized:
In the ordinary course of their operations service providers must engage in all kinds of acts that expose them to potential copyright infringement liability.  For example, service providers must make innumerable electronic copies by simply transmitting information over the Internet. . .  . Many service providers engage in directing users to sites in response to inquiries by users or they volunteer sites that users may find attractive.  Some of these sites might contain infringing material.  In short, by limiting the liability of service providers, the DMCA ensures the efficiency of the Internet will continue to improve and that the variety and quality of services on the Internet will continue to expand.
S. Rep. No. 190, 105th Cong., 2nd Sess. at 8 (1998) (“Senate Report”).

The statutory safe harbor provisions themselves, while lengthy, are clear:  “service providers” (as defined) who meet certain requirements are not liable for monetary damages or injunctive relief (except as narrowly specified in the Act) for infringement of copyright by reason of providing transmission routing or connection services through their system or network.  This safe harbor applies to Napster’s business activities.  The remedies available to Plaintiffs (if any) must be limited accordingly.

Napster strongly disputes Plaintiffs’ allegations that Napster’s actions infringe Plaintiffs’ rights in any way, and will refute those allegations when and if it becomes necessary to do so.   As a threshold matter, however, summary adjudication of the applicability of the first DMCA safe harbor – the subject of this motion – will both dispel any alleged need for preliminary injunctive relief in favor of Plaintiffs and substantially narrow the remaining issues in this case.

  1. Background Of Napster And MP3 File Format.
Napster, a small Internet start-up company located in San Mateo, was incorporated in May 1999 to support the growing popularity of sharing MP3 music files on the Internet.  Napster has approximately 18 employees and to date has no revenues from advertising or other sources.  Declaration of Edward Kessler, dated February 14, 2000, filed under seal herewith “Kessler Decl.”),  3.  Napster’s software, freely available to users via the Internet, allows users to make their own stored MP3 music files available directly to other users who are connected to the Napster system at the same time.  Id. at  4.  The Napster software provides a browser interface, a search engine to locate files available from other users, and a chat feature – all designed to make the process of sharing MP3 files easy and enjoyable.  Id.  Napster’s innovations are not limited to sharing MP3 files, but apply to any format of computerized data.  Id. at  3.

MP3 is a standard file format created by the Motion Picture Experts Group in the late 1980s as the audio layer 3 of the MPEG-1 audiovisual format.  Id. at  5.  MP3 has become the music format of choice on the Internet because of its ability to reproduce near-CD quality sound in a compressed file format that allows for easy transmission across computer networks.  Id.  MP3 files find their way onto the Internet in several ways, including bands and recording artists that make their music available for free downloading as an inexpensive promotional tool, to build mailing lists or for charitable purposes.  Id. at  7.  MP3 files are freely available over the Internet from numerous web sites.  Id.  8.
 
Despite the large amount of MP3 music available on the Internet, finding MP3 files can be a frustrating experience.  MP3 web sites can contain nothing but links to other MP3 web sites that, in turn, simply link to others.  Id.  9.  Web sites that do have MP3 files available for free are often unavailable, slow, busy and/or disorganized.  The Napster software takes the frustration out of locating servers with MP3 files.

 2. The Operation Of The Napster Software And System.
When a user first logs on to the Napster system, the user chooses which MP3 files on his or her own hard drive to make available to other Napster users.  Id. at 10-12 and Exhs. A-C.  The Napster browser application software then reads the list of the names of those files as they exist on the user’s hard drive.  That list of names, but not the files themselves, is then stored on the Napster server and can be accessed by other users.  Id.  In addition to permitting one user to view the list of file names available from another Napster user, the Napster browser also allows users to conduct string searches of the file names of other Napster users then on-line.  Id.  If a user wishes to obtain an MP3 file from another user, the Napster software provides an automatic electronic process that allows transfer of the file the user has chosen directly from the other user’s computer to the requesting user’s computer.  Id. at  13.  This process is accomplished by a user who wishes to obtain a file (“User1”) clicking on the name of a given MP3 file; the Napster server responds by providing User1 with the Internet address for connection to the user whose hard drive contains that file (the “Host”).  The Napster browser then automatically connects User1  to the Host and initiates a process that results in the transmission of the file.  Id.

Napster itself provides no music files directly to any of its users.  Napster’s Servers do not store any music files, and do not copy, even on a transitory basis, any of the music files transferred between its users.  Id. at  14.  All files transfer directly from the computer of one Napster user through the Internet to the computer of the requesting user – Napster merely provides an interface through which users may issue instructions to connect to each other and commence such a transmission.  Id.  As a result, Napster does not control or supervise the materials transmitted between users in any way, does not have the information to distinguish between infringing and non-infringing material or uses, and does not modify the content of the materials in any way.  Id. at  14-17.  Because most MP3 files do not contain reliable codes identifying the level of authorization for circulation, Napster cannot determine the status of such files.  Id. at  6, 17.

 3. Napster’s Copyright Compliance Policy.
Napster’s web site (www.napster.com) advises all Napster users that it is their responsibility to comply with all copyright laws – indeed, such compliance is a mandatory provision of the “Terms of Use” of the Napster service.  Id. at  18 and Exh. E.  Specifically, the Terms of Use posted on Napster’s web site makes clear that Napster does not and cannot control what content is available, and that

[u]sers are responsible for complying with all federal and state laws applicable to such content, including copyright laws.  As a condition of your use of the Napster service and browser you agree that you will not: (i) use the Napster service to infringe the intellectual property rights of others in any way . . . .
Id. (emphasis added).  In addition, Napster users are directed to read the software license agreement, including copyright limitations, during the registration process, and are directed each time they log on to the system to abide by copyright laws.  Id. at  21 and Exhs. G-I.

The first page of Napster’s web site and the Napster Terms of Use both refer users to Napster’s Copyright Policy, also posted on Napster’s web site.  That policy states again that users are responsible for compliance with all applicable federal and state laws, including copyright laws.  Id.  19 and Exh. F.  The Copyright Policy also describes, in detail, Napster’s policy for responding to claims of copyright infringement, including disabling access to and/or removing allegedly infringing material:
Napster respects copyright law and expects our users to do the same.  Unauthorized copying, distribution, modification, public display, or public performance of copyrighted works is an infringement of the copyright holders’ rights.  You should be aware that some MP3 files may have been created or distributed without copyright owner authorization.  As a condition to your account with Napster, you agree that you will not use the Napster service to infringe the intellectual property rights of others in any way.  Napster will terminate the accounts of users who are repeat infringers of the copyrights, or other intellectual property rights, of others.  In addition, Napster reserves the right to terminate the account of a user upon any single infringement of the rights of others in conjunction with use of the Napster service, or if Napster believes that user conduct is harmful to the interests of Napster, its affiliates, or other users, or for any other reason in Napster’s sole discretion, with or without cause.  Id. (emphasis added).  The Copyright Policy also describes the procedure by which reports of alleged copyright infringement may be made to Napster.  Id. at  20 and Exh. F.

Napster also has an extensive internal company policy for responding to notices of alleged infringement, which (as its web site reiterates) provides for termination, in appropriate circumstances, of the accounts of Napster members alleged to be engaged in infringing behavior.  Id.  22 and Exh. J.  Because all of the music files available through the Napster service are located exclusively on the hard drives of Napster’s users, termination of access by an allegedly infringing users removes allegedly infringing material.  Id.  23.  Indeed, Napster has disabled the access to Napster’s system for users who have offered to share allegedly infringing material.  Id.  For example, the Recording Industry Association of America (“RIAA”) provided Napster with a number of screen print-outs from the Napster service on November 15, 1999, claiming that many of the music files offered by the Napster users found on those screen print-outs represented copyright violations.  Id. and Declaration of Frank Creighton in Support of Plaintiff’s Ex Parte Motion for Expedited Discovery (“Creighton Decl.”), Exhibit D.  In response to this “notice” (even though it did not even begin to comply with the requirements of the DMCA), Napster blocked the accounts of some fifty Napster users.  Kessler Decl. at  23 and Exh. K.  Napster’s policy provides that if specification of an infringing user and use is received, that user will be blocked from using the Napster system and, if insufficient information is supplied by a person alleging infringement, Napster will follow up to attempt to elicit sufficient information.  Id.  22 and Exh. J.

Thus, Plaintiffs’ Complaint in this action rests on the fundamentally false premise (among numerous others) that, after receiving notice of allegedly infringing uses, “Napster has continued its unlawful conduct unabated.”  Complaint,  55, 15:15-16.  To the contrary, while Napster denies it has engaged in any unlawful conduct, upon receiving notice of an allegedly infringing user, Napster has blocked the infringing user from the system.  Nonetheless, Plaintiffs have proceeded with this action, insisting that Napster should be found “vicariously liable” or liable as a “contributory infringer” based on the alleged infringement of other users, without identifying to Napster who those other users are, or what use by them is purportedly infringing.   While Napster vigorously disputes any such allegations of liability, it brings this motion as a preliminary matter, because, in all events, the DMCA shields Napster from precisely the sorts of allegations made by Plaintiffs in this action.

1. The Standards For Summary Adjudication.
Summary judgment is proper where there is no genuine question of material fact, and the movant is entitled to judgment as a matter of law.  Fed. R. Civ. P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986).  The purpose of summary judgment is to avoid a clearly unnecessary trial.  Continental Can Co. USA, Inc. v. Monsanto Co., 948 F.2d 1264, 1265 (Fed. Cir. 1991).  Thus, to prevent the entry of summary judgment, the opposing party may not rest on mere allegations.  Rather, that party must present admissible evidence sufficient to support a verdict in its favor.  Matsushita Electric Inds., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 585 (1986); Anderson, 477 U.S. at 248.  There is no genuine issue of material fact if the evidence “is of insufficient caliber or quantity to allow a rational finder of fact” to find for the nonmoving party.  Anderson, 477 U.S. at 254.

Summary adjudication follows the same procedures and standards as summary judgment, but allows for the resolution of particular claims or defenses.  Fed. R. Civ. P. 56(a), (b); Pacific Fruit Express Co. v. Akron, Canton & Youngstown Railroad Co., 524 F.2d 1025, 1029-1030 (9th Cir. 1975) (partial summary judgment granted on issue of liability; affirmed).  In certain cases, summary adjudication is appropriate to resolve particular issues within a claim or defense.  Robi v. Five Platters, Inc., 918 F.2d 1439, 1441-1442 (9th Cir. 1990) (summary adjudication granted on issue of res judicata effect of prior rulings; affirmed).  In this case, Napster seeks summary adjudication of the applicability of the 17 U.S.C. § 512(a) safe harbor to its business activities and the resulting limitations on any remedies available to plaintiffs – one aspect of Napster’s overall defense, but one that will substantially narrow the issues, and remedies, in this action.  As with the resolution of the res judicata issue in Robi, summary adjudication is the appropriate procedural vehicle for deciding the applicability of section 512(a) early in this dispute.

As with summary judgment, only disputes over facts that might affect the outcome of the suit under governing law will properly preclude entry of summary adjudication.  Anderson, 477 U.S. at 248.  In this case, the governing law is the DMCA, and specifically the application of the first “safe harbor” provision found at 17 U.S.C. § 512(a).  Thus, the only facts relevant to this motion are those that bear on Napster’s compliance with the provisions applicable to this safe harbor.

2. The Provisions of 17 U.S.C. § 512.
Section 512(a) provides as follows:
§ 512.  Limitations on liability relating to material online
(a) Transitory digital network communications.—A service provider shall not be liable for monetary relief, or, except as provided in subsection (j), for injunctive or other equitable relief, for infringement of copyright by reason of the provider’s transmitting, routing, or providing connections for, material through a system or network controlled or operated by or for the service provider, or by reason of the intermediate and transient storage of that material in the course of such transmitting, routing, or providing connections, if—
(1) the transmission of the material was initiated by or at the direction of a person other than the service provider;
(2) the transmission, routing, provision of connections, or storage is carried out through an automatic technical process without selection of the material by the service provider;
(3) the service provider does not select the recipients of the material except as an automatic response to the request of another person;
(4) no copy of the material made by the service provider in the course of such intermediate or transient storage is maintained on the system or network in a manner ordinarily accessible to anyone other than anticipated recipients, and no such copy is maintained on the system or network in a manner ordinarily accessible to such anticipated recipients for a longer period of time than is reasonably necessary for the transmission, routing, or provision of connections; and
(5) the material is transmitted through the system or network without modification of its content.
To determine whether this safe harbor applies to Napster’s activities, several other provisions of section 512 must be considered.  Section 512(i) establishes certain “conditions for eligibility” which a party claiming protection under the DMCA’s safe harbor provisions must meet.
(i) Conditions for eligibility.—
(1) Accommodation of technology.—The limitations on liability established by this section shall apply to a service provider only if the service provider—
(A) has adopted and reasonably implemented, and informs subscribers and account holders of the service provider’s system or network of, a policy that provides for the termination in appropriate circumstances of subscribers and account holders of the service provider’s system or network who are repeat infringers; and
(B) accommodates and does not interfere with standard technical measures.
(2) Definition.  As used in this subsection, the term “standard technical measures” means technical measures that are used by copyright owners to identify or protect copyrighted works and—
(A) have been developed pursuant to a broad consensus of copyright owners and service providers in an open, fair, voluntary, multi-industry standards process;
(B) are available to any person on reasonable and nondiscriminatory terms; and
(C) do not impose substantial costs on service providers or substantial burdens on their systems or networks.
Section 512(k) defines the terms “service provider” and “monetary relief” as used in the provisions quoted above:
(k) Definitions.
(1) Service Provider.—
(A) As used in subsection (a), the term “service provider” means an entity offering the transmission, routing, or providing of connections for digital online communications, between or among points specified by a user, of material of the user’s choosing, without modification to the content of the material as sent or received.
(B) As used in this section, other than subsection (a), the term “service provider” means a provider of online services or network access, or the operator of facilities therefore, and includes an entity described in subparagraph (A).
(2) Monetary relief.—As used in this section, the term “monetary relief” means damages, costs, attorneys’ fees, and any other form of monetary payment.
Finally, section 512(m) makes clear that the application of the safe harbor provisions does not depend on Napster’s monitoring its service for suspected infringing activity:
(m) Protection of privacy.—Nothing in this section shall be construed to condition the applicability of subsections (a) through (d) on—
(1) a service provider monitoring its service or affirmatively seeking facts indicating infringing activity, except to the extent consistent with a standard technical measure complying with the provisions of subsection (i); or
(2) a service provider gaining access to, removing, or disabling access to material in cases in which such conduct is prohibited by law.

As of yet, there are no reported decisions interpreting these provisions.  Determination of this motion, therefore, is an exercise in pure statutory construction.  As the Ninth Circuit has held, “in construing statutes in a case of first impression, we first look to the language of the controlling statutes, and second to the legislative history.  If the language of a statute is clear and there is no ambiguity, then there is no need to ‘interpret’ the language by resorting to the legislative history or other extrinsic aids.  Moreover, absent a clearly expressed legislative intent to the contrary, the plain language must ordinarily be regarded as conclusive.”  State of California v. Montrose Chemical Corporation of California, 104 F.3d 1507, 1513 (9th Cir. 1997) (legislative history could not contradict clear language of the statute at issue) (internal quotations and citations omitted).

I. NAPSTER’S BUSINESS ACTIVITIES FALL WITHIN THE PROVISIONS OF THE SECTION 512(a) SAFE HARBOR.
The statutory language of the DMCA quoted above, while lengthy, is clear.  All critical terms (such as “service provider”) are defined.  All that is required is to parse through a series of nested provisions and definitions to determine the requirements for application of the safe harbor, and then compare those requirements with the evidence of the operation of Napster’s network.  When this process is completed, the undisputed – and indisputable – facts demonstrate that Napster’s business activities quality under section 512(a).

A. Napster Meets All Of The Specific Requirements Of The Section 512(a) Safe Harbor.

Napster will come within the section 512(a) safe harbor for infringement of copyright by reason of Napster’s transmitting, routing, or providing connections for material through a system or network controlled or operated by or for Napster if it complies with the specific requirements stated in sections 512(a)(1) through (5).   Napster meets all five requirements.

1. The transmission of material in the Napster system is always initiated by a Napster user, and not by Napster.
The first requirement is that “the transmission of the material was initiated by or at the direction of a person other than the service provider.”  17 U.S.C. § 512(a)(1).  Because the Napster system is nothing more than a network that allows users to locate and transfer, freely and voluntarily, MP3 files located on each user’s local hard drive, Napster never initiates the transmission of material – it is always a user who does this.  Kessler Decl.  15.  Plaintiffs admit as much in their Complaint, conceding that it is the users who choose both what files to make available and what files to download:  “[U]sers choose which of their own MP3 music files stored on their computer hard drives they want to make available,” and “all Napster users need to do is select the file they want and it automatically downloads . . .”  Complaint,  46, 12:18-10 and 49, 13:9-10.

2. The transmission is carried out through an automatic technical process, and Napster does not select the material to be transmitted.
The second requirement is that “the transmission, routing, provision of connections, or storage is carried out through an automatic technical process without selection of the material by the service provider.”  17 U.S.C. § 512(a)(2).  Again, as a system that merely allows users to share MP3 files they alone choose to share (see Complaint,  46,12:8-10), Napster has no involvement in selecting the material to be transmitted.  Kessler Decl.  15-16.  More importantly, the entire transfer process is entirely automatic:  a user simply selects the file she would like to receive from another user she chooses, clicks on that file, and the software connects the users and initiates the automatic process that causes the transmission.  The selected files are automatically transferred directly from the Host’s hard drive to the recipient user’s hard drive through hardware, software and the infrastructure of the Internet (including the Napster browser).  Id. at  13-15.  Again, paragraph 49 of Plaintiffs’ Complaint admits this aspect of the Napster system:  “[A]ll Napster users need to do is select the file they want and it automatically downloads . . . to their individual computer hard drives.”

3. Napster does not select the recipients of the material transmitted.
The third requirement is that “the service provider does not select the recipients of the material except as an automatic response to the request of another person.”  17 U.S.C. § 512(a)(3).  Napster’s system is entirely voluntary; the receipt of transmitted MP3 files can only occur when a user specifically requests that a particular file be transmitted to her local hard drive.  Kessler Decl.  15.  Napster therefore has no involvement of any kind in the selection of recipients of the transmitted material.  The recipient alone selects herself—as is also admitted by the portion of paragraph 49 of Plaintiffs’ Complaint quoted above.

4. No copy of the material is made by Napster in the course of transmission.
The fourth requirement is intended to provide protection for service providers who, in the course of transmitting material, store a copy of the material on their system on an intermediate and transient basis.  So long as such storage copies are not “ordinarily accessible to anyone other than anticipated recipients” and so long as no such copies are “maintained on the system  . . . for a longer period than is reasonably necessary for the transmission,” the safe harbor still applies.  17 U.S.C. § 512(a)(4).  This provision is not applicable to Napster, because the Napster system does not store any MP3 files for any length of time, and the Napster servers do not copy any of the MP3 files transferred between users.  Kessler Decl.  14.  All files transfer directly from the computer of one Napster user to the computer of the requesting user.  Id.

5. The material is transmitted by Napster’s system without modification of its content.
The final requirement is that “the material is transmitted through the system or network without modification of its content.”  17 U.S.C. § 512(a)(5).  That is precisely what happens when the MP3 files chosen by a user are transmitted to that user’s hard drive from the hard drive of another Napster user through the connection and address supplied by Napster.  Indeed, the content of MP3 files are routed without even passing through Napster’s Servers, so Napster not only does not, but cannot, modify the contents of those files.  Kessler Decl.  14-15.

B. Napster Is A “Service Provider” Under 17 U.S.C. §§ 512(k)(1)(A) And 512(a).

Because Napster seeks protection under the first DMCA safe harbor, section 512(a), the applicable definition of “service provider” is found in section 512(k)(1)(A), which is quoted in full above.
Napster meets this definition:  Napster offers the “transmission, routing, or providing of connections for digital online communications” between its users.  The Napster software allows a user to log on to the Napster system and access MP3 files located on the local hard drives of other Napster users logged on to the system at that time.  Kessler Decl.  12-13.  Simultaneously, other Napster users logged on at the same time can access MP3 files located on that user’s local hard drive, provided that user has elected to make such files available for sharing.  Id.  If a Napster user finds an MP3 file he or she wishes to obtain, he or she simply clicks on that file and the Napster server automatically routes the transmission by providing the requested address instructions, thereby enabling the connection and transmission of the file directly from the Host hard drive and Napster browser through the Internet to the user’s Napster browser and hard drive.  Id.  Plaintiffs’ Complaint acknowledges this aspect of the Napster service:  “This Napster-developed software enables users to connect their computers to a hub of computer servers maintained by Napster . . . .”  Complaint,  46, 12:5-6.

Section 512(k)(1)(A) further requires that the “digital online communications” be “between or among points specified by a user” and the material transferred must be “of the user’s choosing, without modification to the content of the material as sent or received.”  In the Napster system, the points of online communications (i.e., the browser of the user sending the transmission, and the browser of the user receiving the transmission) are specified by the user.  Likewise, the material (i.e., the specific MP3 file) is specified entirely by the user with no input from Napster.  Kessler Decl.  15-17.  As noted above, paragraph 49 of Plaintiff’s Complaint admits these facts.  Napster’s system in no way modifies the content of the files so transferred.  Id.  Thus, Napster meets the definition of “service provider” under section 512(k)(1)(A).

The same phrase, “transmission, routing, or providing of connections,” that is found in the section 512(k)(1)(A) definition of “service provider” is also found in the initial paragraph of section 512(a).  For the section 512(a) safe harbor to apply, the allegedly infringing conduct of the service provider must be “by reason of the provider’s transmitting, routing, or providing connections for” such communications.  17 U.S.C. § 512(a).  In other words, a service provider’s actions fall within the section 512(a) safe harbor if they comprise part of, or are taken in conjunction with, the “transmission, routing, or providing of connections” functions performed by the service provider.  The Napster system comports with this provision, as all of the allegedly infringing functions performed by the Napster system are integral to the Napster system’s transmission, routing or providing connections for digital online communications.  To understand why this is the case, a brief discussion of computer networks in general, and the Napster system in particular, is helpful.

1. Computer network communications inherently require address information to complete the process of routing, transmissions and connections.
 At their most basic level, computer networks consist of combinations of hardware and software that move information from one location to another.  See Douglas E. Comer, Computer Networks and Internets at 225 (1999) (“Comer”) (attached as Exhibit A to Napster’s Request for Judicial Notice, filed herewith).  A local area network moves information around an office.  The Internet moves information around the world.  But in each circumstance, it is the movement of information from one given point to another—the connection of those two addresses—that constitutes the value of the system to the users and to the public.

 The flow of information through the Internet is controlled by a multi-layered combination of hardware and software, known as the “TCP/IP protocol stack.”  Id. at 230.  Each layer of the stack has a defined role, and through its communication with the layers above and below performs functions integral to the movement of information from one point to another.  Id. at 204-207.  The bottommost layer contains the hardware; another layer holds the individual addresses assigned to each computer attached to the network (an “IP address”).  Id.  From the user’s perspective, the most important layer is the topmost, the application layer, by which the user interfaces with and submits information into the system and layers below.

 To move information between two points, a computer network of necessity must be provided with the locations of the points to be connected and of the information to be transferred.  Id. at 324.  This is the task of the application layer.  Id.  The network must know both the location where the information originates, and it must know the location to which it will be transmitted.  Id.  The combination of the computer’s location, and the location of the file within it containing the information to be transferred, can be described as the “address,” since both are necessary for information to reach its destination.  Id.  In the case of the Napster system, like any other application layer program, a connection, routing, or transmission of information is simply unattainable without an address where the information (an MP3 or other file) can be located.  Id.  It is only when an application layer acts in combination with the other layers of the TCP/IP protocol stack that digital information can be transmitted and routed across the Internet from one address to another.  Id.

2. The Napster system’s provision of an address for the transmission of information, delivered at the user’s request, is an integral part of transmission, routing, and providing connections.
 Napster has invented its own proprietary application layer software, which is utilized by the Napster system.  When a first user (“User1”) desires to obtain an MP3 file that is stored on the hard drive of a second user (“the Host”), User1 must, to obtain that file, know the Host’s address.  Whenever the Host is connected to the central Napster server, the Host’s address, including the names of each file the Host has made available, is known to the central Napster server.  Kessler Decl.  10-13.  When User1 clicks on the desired file name, as required to commence a connection and the transmission of the file, the central Napster server routes the transmission by providing the Host’s address to the Napster browser software that is installed on and in use by User1’s computer.  User1’s Napster browser then opens the route to that address, makes the connection, and the file from the Host is transmitted through the Internet’s network of hardware and software, directly to User1.  Id.

 The Napster system’s delivery of the address of the Host and of the desired file name at the Host is thus an integral and necessary component for the transmission and connection to occur.  Indeed, the address is not only necessary to the transmission; it is provided for no other reason whatsoever.  The full address is never provided at all to User1, except upon User1’s particular request to commence the connection and transmission of information from that particular source.  Id.

 Moreover, the delivery of the Host’s address by the Napster server is made in response to the particularized choice of that Host by User1, and only User1.  While the central Napster server contains a list of all the files shared by all users connected at any one time, the central Napster server does nothing to recommend or promote any particular file.  Id. at  15-16.  The Napster system does not search the Internet or elsewhere for files to list; it merely displays the list of the files that users have chosen to make available.  Similarly, Napster plays no role in determining which files the Host will choose to make available; such decisions are solely within the control of the Host.  Id.  Finally, the choice of any file name for which to request an address is strictly up to User1, without any judgment or recommendation imposed by Napster.  Id.

 Indeed, the functionality provided by the Napster software is similar to that provided by one of the most common types of application layer programs:  “File Transfer Protocol,” or FTP, software.  FTP software permits a User1 to see the list of files made available by a Host.  User1 may then instruct the Host to transmit a particular file to User1, or User1 may send a file to the Host using FTP.  See Comer at 400-405.  The Napster system is also similar to another common type of application layer program:  web browsers such as Microsoft Internet Explorer and Netscape Communicator.  As with FTP and the Napster system, these browsers are tools by which a User1 can determine what files have been made available by a Host and transmit files from the Host to User1.  Kessler Decl.  10.  As with the Napster system, neither a web browser nor FTP software exercises control over what information the Host makes available.

 Systems of this type, which merely enable connection and transmission between users, are precisely what section 512(a) by its terms is designed to protect.  The statute protects transmissions “initiated by or at the direction of a person other than the service provider” (section 512(a)(1)), made “without selection of the material by the service provider” (section 512(a)(2)), and where “the service provider does not select the recipient” (section 512(a)(3)).  The Napster system—which merely provides addresses and instructions to the network necessary to commence desired connections and transmissions—fits this model of neutrality in providing connectivity for transmission of information.  The system thus qualifies for the safe harbor of section 512(a).

C. Napster Meets All Of The Conditions For Eligibility Found In 17 U.S.C. § 512(i).

Finally, to be eligible for the section 512(a) safe harbor, Napster must demonstrate compliance with the “conditions for eligibility” stated in section 512(i), quoted above.  Section 512(i) contains two prongs; Napster clearly meets prong one, and prong two is inapplicable.

Prong one of the section 512(i) conditions for eligibility requires that Napster has “adopted and reasonably implemented, and informs subscribers and account holders of . . ., a policy that provides for the termination in appropriate circumstances of subscribers and account holders . . . who are repeat infringers.”  17 U.S.C. § 512(i)(1)(A).  Napster has done just that.

As discussed above, Napster has an extensive internal company policy for responding to notices of alleged infringement, which provides for the termination, in appropriate circumstances, of the accounts of Napster members alleged to be engaged in infringing behavior.  Kessler Decl.  22 and Exh. J.  Napster’s web site (www.napster.com) informs all Napster users of this policy, reminds users that it is their responsibility to comply with all copyright laws, and requires such compliance as part of the “Terms of Use” of the Napster service.  Id. at  18 and Exh. E.  Napster users are directed to read the license agreement governing use of the Napster software, including copyright limitations, during the registration process, and must affirmatively click provisions for use that include accepting their responsibility under the copyright laws.  Id. at  21 and Exh. G.

Napster’s Copyright Policy, also posted on Napster’s web site, describes in detail Napster’s policy for responding to claims of copyright infringement, including disabling access to and/or removing allegedly infringing material:
Napster will terminate the accounts of users who are repeat infringers of the copyrights, or other intellectual property rights, of others.  In addition, Napster reserves the right to terminate the account of a user upon any single infringement of the rights of others in conjunction with use of the Napster service . . . .
Id. at  19 and Exh. F (emphasis added).  The Copyright Policy also describes the procedure by which reports of alleged copyright infringement may be made to Napster.  Id. at  20, 24.

Because all of the MP3 files available through the Napster service are located exclusively on the hard drives of Napster’s users, the process for disabling access to and/or removing allegedly infringing material blocks the access of users on whose hard drives such material is located.  Id. at  23.  In fact, Napster has blocked access to the Napster service for users identified as possible copyright infringers by Plaintiffs.  On or about November 15, 1999, Plaintiffs provided Napster with screen shots of the Napster service and claimed some of the MP3 files offered on those screens represented copyrighted songs owned by Plaintiffs.  Id.; Creighton Decl. Exh. D.  In response to this “notice” (even though it did not even begin to comply with the requirements of the DMCA), Napster took steps to block the accounts by changing passwords of the users listed and banning those users – more than fifty Napster members.  Kessler Decl.  23 and Exh. K.  Thus, not only does Napster have the sort of policy required by section 512(i)(1)(A), Napster is enforcing it, arguably beyond the extent strictly required by the DMCA.

Napster’s policy is reasonable and sufficient under section 512(i) because it allows Napster to block any infringer identified to Napster.  The DMCA places no requirement on Napster to take affirmative steps other than to respond to such notifications.  Indeed, section 512(m), titled “Protection of privacy,” suggests exactly the opposite.  Napster’s eligibility for the protections offered by the DMCA is expressly not conditioned on Napster “monitoring its service or affirmatively seeking facts indicating infringing activity.”  17 U.S.C. § 512(m).  Under section 512(a), Napster is merely required to implement a policy to deal with users identified as repeat infringers and, under appropriate circumstances, to terminate the accounts of such users.  17 U.S.C. § 512(i)(1)(A).  The DMCA, in its balancing of rights among copyright holders, users and service providers, places the burden of identifying such alleged infringers on the copyright holders.  As it has in the past and will in the future, Napster is simply required to react to such specific notices per its DMCA policy.

D. Application Of The DMCA To Napster’s Activities Is Consistent With Federal Internet Policy.

The application of the DMCA to protect Napster’s role in the exchange of MP3 files is also entirely consistent with federal policy regarding digital transmissions of MP3 files over the Internet.  While no reported case has yet dealt with the DMCA, MP3 files and their impact on the traditional music recording industry are not new issues to courts in the Ninth Circuit.  The recording industry has gone to great lengths to vilify the MP3 format due to the format’s inherent inability to identify whether the file is copyright protected.  Nonetheless, even the RIAA has to admit that there is “nothing unlawful about the MP3 format per se.”  Complaint,  42, 11:1.  Indeed, in Recording Industry Association of America v. Diamond Multimedia Systems, Inc., 180 F.3d 1072 (9th Cir. 1999), the Ninth Circuit applied another previously uninterpreted provision of the federal copyright law to reject a challenge to a new portable MP3 music player called the Diamond “Rio.”

The Ninth Circuit held that the Rio was not a “digital audio recording device” under the terms of the Audio Home Recording Act (AHRA) of 1992, such that the restrictions on such devices created by the AHRA did not apply.  Id. at 1081 (affirming the district court’s denial of plaintiff’s motion for preliminary injunction to stop the distribution of the Rio device).  In so holding, the court reaffirmed the need to interpret and apply the copyright laws as written – particularly statutes reflecting balancing of competing policies in the fast-paced world of digital communications.  Id. at 1078-1079.  Notwithstanding an allegation that the “predominant” use of MP3 files was for “illicit” recordings, the Ninth Circuit affirmed the unfettered use of the Rio with MP3 files, at least in part, because “the Rio’s operation is entirely consistent with the Act’s main purpose—the facilitation of personal use.”  Id.

 Diamond Multimedia’s approach applies powerfully to this case.  The DMCA, like the AHRA, is a carefully crafted compromise designed to balance—and limit—the rights of copyright holders as against other priorities.  Congress passed the DMCA specifically to provide safe harbor limitations of liability for Internet business activities like Napster’s ? to “ensure the efficiency of the Internet continues to improve and that the variety and quality of services on the Internet continues to expand.”  Senate Report at 8.  Safe harbor 512(a) is designed, and must be construed, to encourage investment in the infrastructure of the Internet that enhances the public’s ability to use and share information.  In all respects, the section 512(a) safe harbor applies to Napster.

II. BECAUSE THE SECTION 512(A) SAFE HARBOR APPLIES TO NAPSTER’S ACTIVITIES, PLAINTIFF’S REMEDIES (IF ANY) ARE LIMITED TO THE NARROW INJUNCTION SPECIFIED BY SECTION 512(J)(1)(B).

Because Napster meets all of the definitions and requirements necessary for protection under the section 512(a) safe harbor, Napster “shall not be liable for monetary relief, or, except as provided in subsection (j), for injunctive or other equitable relief, for infringement of copyright.”  17 U.S.C. § 512(a).  “Monetary relief” is defined by section 512(k)(2) as “damages, costs, attorneys’ fees, and any other form of monetary payment.”

Thus, the only remedy left Plaintiffs is the narrow injunction specified by section 512(j) – provided, of course, that Plaintiffs could carry their burden of proof on the prerequisites for an injunction under the Copyright Act and the Federal Rules of Civil Procedure.  If they could, the terms of the injunction are limited by section 512(j)(1)(B):
(B) If the service provider qualifies for the limitation on remedies described in subsection (a), the court may only grant injunctive relief in one or both of the following forms:
(i) An order restraining the service provider from providing access to a subscriber or account holder of the service provider’s system or network who is using the provider’s service to engage in infringing activity and is identified in the order, by terminating the accounts of the subscriber or account holder that are specified in that order.
(ii) An order restraining the service provider from providing access, by taking reasonable steps specified in the order to block access, to a specific, identified, online location outside the United States.
In short, the DMCA limits injunctive relief to blocking access to individual infringing users, rather than enjoining the service provider’s general activities.  This is consistent with the DMCA’s allocation of responsibilities to individual users not to infringe, and to service providers to deny access to known and identified individual infringers.

Here, there is no need for even this limited injunctive relief.  Under Napster’s DMCA policy, if Napster receives proper notice, Napster will itself block access to the Napster system for any user identified as engaging in infringing activity.  Napster’s own policy thus provides all the relief available under section 512(j)(1)(B), without any need for Court intervention.  Of course, Plaintiffs have yet to seek an injunction of any kind against Napster.

 The DMCA was intended by Congress “to facilitate the robust development and world-wide expansion of electronic commerce” and communications over the Internet.  Senate Report at 1.  The DMCA specifically places the obligation of compliance with copyright laws on the users of online services, and the burden of policing such compliance on the entities that claim the benefit of the copyright monopoly, rather than on those who merely facilitate transmissions, routing and connections.  Service providers like Napster are neither the criminals nor the police in this scheme, and carry none of the liability of either party.  Napster’s activities meet all of the definitions and requirements for the application of the section 512(a) safe harbor, and are clearly entitled to the limitations on liability granted by this statute.  For all of the foregoing reasons, Napster respectfully requests that its motion for summary adjudication as to the application of the section 512(a) safe harbor to its activities provision be granted.

DATED:  February 14, 2000   FENWICK & WEST LLP
 By:  Laurence F. Pulgram
Attorneys for Defendant NAPSTER, INC.

Footnotes:
   1.  This motion is limited to applicability of section 512(a), and is without prejudice to application of any other safe harbor that may apply in addition or in the alternative.
   2.  The prefatory section 512(a) provisions which precede subsections 512(a)(1)-(5) are essentially identical to the definition of “service provider” found in section 512(k)(1)(A).  Napster’s compliance with this definition is discussed in detail below at section I.B.
   3. The most the Napster system stores is an index or list of file names, and not the files themselves.  This is also admitted in paragraph 46 of Plaintiffs’ Complaint.
  4.  Prong two of section 512(i) requires that Napster “accommodate[] and [] not interfere with standard technical measures.”  17 U.S.C. § 512(i)(1)(B).  “Standard technical measures” are defined in section 512(i)(2) as technical measures used by copyright holders to identify or protect copyrighted works that were developed by a broad consensus of copyright owners and service providers in an open, fair, voluntary and multi-industry standards process, are available to any person on reasonable and non-discriminatory terms and do not impose substantial costs or burdens on service providers.  This prong is not applicable to Napster’s claim of protection under the section 512(a) safe harbor because, as yet, no such “standard technical measures” exist for MP3 files.  Kessler Decl.  6.
   5.  Napster expects that Plaintiffs will argue that certain features of the Napster software fall under the safe harbor described in section 512(d) to the exclusion of application of section 512(a).  While Napster disputes this, Napster notes that section 512(d) requires notices of alleged copyright infringement to comply with the detailed requirements of section 512(c).  Plaintiff’s November 12, 1999 communication regarding alleged copyright infringements on the Napster system does not come close to complying with those requirements.  Compare Creighton Decl. Exh. D with section 512(c)(3)(A) and (B).  Despite this deficiency, Napster still took action and blocked access to the users identified in that communication.
   6.  If and when Plaintiffs do seek an injunction, Napster will address the additional special considerations set forth in section 512(j)(2) that further limit injunctive relief, including “whether other less burdensome and comparatively effective means of preventing or restraining access to the infringing material are available.”
 

Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) 7, 8

Continental Can Co. USA, Inc. v. Monsanto Co., 948 F.2d 1264 (Fed. Cir. 1991) 7

Matsushita Electric Inds., Ltd. v. Zenith Radio Corp., 475 U.S. 574 (1986) 7

Pacific Fruit Express Co. v. Akron, Canton & Youngstown Railroad Co., 524 F.2d 1025 (9th Cir. 1975) 7

Recording Industry Association of America v. Diamond Multimedia Systems, Inc., 180 F.3d 1072 (9th Cir. 1999) 20

Robi v. Five Platters, Inc., 918 F.2d 1439 (9th Cir. 1990) 7, 8

State of California v. Montrose Chemical Corporation of California, 104 F.3d 1507 (9th Cir. 1997) 10
 

STATUTES 17 U.S.C.
 § 512 8
 § 512(a) passim
 § 512(a)(1) 11, 17
 § 512(a)(2) 12, 17
 § 512(a)(3) 12, 17
 § 512(a)(4) 13
 § 512(a)(5) 13
 § 512(c) 19
 § 512(c)(3)(A) 19
 § 512(c)(3)(B) 19
 § 512(d) 19
 § 512(i) passim
 § 512(i)(1)(A) 18, 19
 § 512(i)(1)(B) 18
 § 512(i)(2) 18
 § 512(j) 1, 21, 22
 § 512(j)(1)(B) 2, 21, 22
 § 512(j)(2) 22
 § 512(k) 1, 9
 § 512(k)(1)(A) passim
 § 512(k)(2) 21
 § 512(m) 2, 10, 19, 21
 § 512(m)(1) 2

RULES

Fed. R. Civ. P.
 56 1
 56(a) 7
 56(b) 7
 56(c) 7

 OTHER AUTHORITIES

Douglas E. Comer, Computer Networks and Internets (1999) 15, 17
S. Rep. No. 190, 105th Cong., 2nd Sess. (1998) 3, 21, 22