A&M RECORDS, INC., a corporation; GEFFEN
RECORDS, INC., a corporation; INTERSCOPE RECORDS, a general partnership; SONY
MUSIC ENTERTAINMENT, INC., a corporation; MCA RECORDS, INC., a corporation;
ATLANTIC RECORDING CORPORATION; ISLAND RECORDS, INC., a corporation; MOTOWN
RECORD COMPANY, LP, a limited partnership; CAPITOL RECORDS, INC., a corporation;
LA FACE RECORDS, a joint venture; BMG MUSIC d/b/a THE RCA RECORDS LABEL, a
general partnership; UNIVERSAL RECORDS, INC., a corporation; ELEKTRA
ENTERTAINMENT GROUP, INC., a corporation; ARISTA RECORDS, INC., a corporation;
SIRE RECORDS GROUP, INC., a corporation; POLYGRAM RECORDS, INC., a corporation;
VIRGIN RECORDS AMERICA, INC., a corporation; WARNER BROS. RECORDS, INC., a
corporation, Plaintiffs-Appellants, v. NAPSTER, INC., a
corporation, Defendant-Appellee. JERRY LEIBER, individually and doing business
as JERRY LEIBER MUSIC; MIKE STOLLER, individually and doing business as MIKE
STOLLER MUSIC; FRANK MUSIC CORPORATION, on behalf of themselves and all others
similarly situated, Plaintiffs-Appellants, v. NAPSTER, INC.,
Defendant-Appellee. In re: NAPSTER, INC.,
A&M RECORDS, INC., a corporation; GEFFEN RECORDS, INC., a
corporation; INTERSCOPE RECORDS, a general partnership; SONY MUSIC
ENTERTAINMENT, INC., a corporation; MCA RECORDS, INC., a corporation; ATLANTIC
RECORDING CORPORATION, a corporation; ISLAND RECORDS, INC., a corporation;
MOTOWN RECORD COMPANY, L.P., a limited partnership; CAPITOL RECORDS, INC., a
corporation; LA FACE RECORDS, a joint venture; BMG MUSIC d/b/a THE RCA RECORDS
LABEL, a general partnership; UNIVERSAL RECORDS, INC., a corporation; ELEKTRA
ENTERTAINMENT GROUP, INC., a corporation; ARISTA RECORDS, INC., a corporation;
SIRE RECORDS GROUP, INC., a corporation; POLYGRAM RECORDS, INC., a corporation;
VIRGIN RECORDS AMERICA, INC., a corporation; WARNER BROS. RECORDS, INC., a
corporation; ANDRE YOUNG; METALLICA; CASANOVA RECORDS; JERRY LEIBER; MIKE
STOLLER; FRANK MUSIC CORPORATION, Plaintiffs-Appellees, and TEE VEE TOONS;
MATTHEW KATZ; E/M VENTURES; CREEPING DEATH MUSIC; AFTERMATH ENTERTAINMENT;
EMUSIC.COM, INC.; THE NATIONAL ACADEMY OF RECORDING ARTS & SCIENCES,
Plaintiffs, v. NAPSTER, INC., Defendant-Appellant, and FRED
DRUST; JOHN FANNING; HUMMER WINBLAD; HANK BARRY; BOB BOZEMAN; YOSI AMRAM; SHAWN
FANNING, Defendants. In re: NAPSTER, INC.,
A&M RECORDS, INC., a corporation; GEFFEN RECORDS, INC., a
corporation; INTERSCOPE RECORDS, a general partnership; SONY MUSIC
ENTERTAINMENT, INC., a corporation; MCA RECORDS, INC., a corporation; ATLANTIC
RECORDING CORPORATION, a corporation; ISLAND RECORDS, INC., a corporation;
MOTOWN RECORD COMPANY, L.P., a limited partnership; CAPITOL RECORDS, INC., a
corporation; LA FACE RECORDS, a joint venture; BMG MUSIC d/b/a THE RCA RECORDS
LABEL, a general partnership; UNIVERSAL RECORDS, INC., a corporation; ELEKTRA
ENTERTAINMENT GROUP, INC., a corporation; ARISTA RECORDS, INC., a corporation;
SIRE RECORDS GROUP, INC., a corporation; POLYGRAM RECORDS, INC., a corporation;
VIRGIN RECORDS AMERICA, INC., a corporation; WARNER BROS. RECORDS, INC., a
corporation; ANDRE YOUNG; METALLICA; CASANOVA RECORDS; JERRY LEIBER; MIKE
STOLLER; FRANK MUSIC CORPORATION, Plaintiffs-Appellees, and TEE VEE TOONS;
MATTHEW KATZ; E/M VENTURES; CREEPING DEATH MUSIC; AFTERMATH ENTERTAINMENT;
EMUSIC.COM, INC.; THE NATIONAL ACADEMY OF RECORDING ARTS & SCIENCES,
Plaintiffs, v. NAPSTER, INC., Defendant-Appellant, and FRED
DRUST; JOHN FANNING; HUMMER WINBLAD; HANK BARRY; BOB BOZEMAN; YOSI AMRAM; SHAWN
FANNING, Defendants.
No. 01-15998, No. 01-16003, No. 01-16011, No. 01-16308
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
284 F.3d 1091; 2002 U.S. App. LEXIS 4752; 62 U.S.P.Q.2D (BNA)
1221; 52 Fed. R. Serv. 3d (Callaghan) 5; 2002 Cal. Daily Op. Service 2635; 2002
Daily Journal DAR 3223
December 10, 2001, Argued and Submitted, Pasadena,
California
March 25, 2002, Filed
PRIOR
HISTORY: [**1] Appeal from the United States District Court
for the Northern District of California. D.C. No. CV-99-5183-MHP, D.C. No.
CV-00-0074-MHP, D.C. No. CV-00-1369-MHP. Marilyn H. Patel, Chief District Judge,
Presiding.
A&M Records, Inc. v. Napster, Inc., 2001 U.S.
Dist. LEXIS 2186 (N.D. Cal. Mar. 5, 2001).
DISPOSITION:
Affirmed.
COUNSEL: Russell J. Frackman, George M.
Borkowski, Peter B. Gelblum, Jeffrey D. Goldman, Mitchell Silberberg & Knupp
LLP, Los Angeles, California, for A&M Records, Inc. et al.,
plaintiffs-appellants-cross-appellees.
Carey R. Ramos, Aidan
Synnott, Michael C. Keats, Lewis E. Farberman, Paul Weiss Rifkind Wharton &
Garrison, New York, New York, for Jerry Leiber et al.,
plaintiffs-appellants-cross-appellees.
Laurence F. Pulgram, David
Hayes, Fenwick & West LLP, San Francisco, California, Steven Holtzman, Boies
Schiller & Flexner LLP, Armonk, New York, for Napster, Inc.,
defendant-appellee-cross-appellant.
Dale M. Cendali, Diana M.
Torres, Elyssa M. Getreu, O'Melveny & Myers LLP, Los Angeles, California,
for amici Motion Picture Association of America, Inc., American Film Marketing
Association, American Society of Composers, Authors and Publishers, Broadcast
Music, Inc., American Society of Media Photographers, Association of American
Publishers, Business Software Alliance, [**2] Office of the
Commissioner of Baseball, Jazz Journalists Association, Professional
Photographers of America, and Software & Information Industry Association.
JUDGES: Before: Mary M. Schroeder, Chief Judge, Robert
R. Beezer and Richard A. Paez, Circuit Judges. Opinion by Judge Beezer.
OPINIONBY: Robert R. Beezer
OPINION: [*1095] BEEZER, Circuit Judge:
This appeal involves challenges to a modified preliminary injunction
entered by the district court on remand from a prior appeal, A&M Records,
Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001). At issue is the district
court's order forcing Napster to disable its file transferring service until
certain conditions are met to achieve full compliance with the modified
preliminary injunction. We entered a temporary stay of the shut down order
pending resolution of this appeal. We have jurisdiction pursuant to 28 U.S.C. §
1292(a)(1). We affirm both the district court's modified preliminary injunction
and shut down order.
I Plaintiffs' action
against Napster claims contributory and vicarious copyright infringement
stemming from Napster's peer-to-peer music file sharing service. n1 In the prior
interlocutory appeal, [**3] we affirmed the district court's
decision to issue a preliminary injunction and reversed and remanded with
instructions to modify the injunction's scope to reflect the limits of Napster's
potential liability for vicarious and contributory infringement. Napster, 239
F.3d at 1027.
- - - - - - - - - - - - - - - - - -Footnotes- - - -
- - - - - - - - - - - - - -
n1 For a description of Napster's system,
see Napster, 239 F.3d at 1011-12.
- - - - - - - - - - - - - - - -
-End Footnotes- - - - - - - - - - - - - - - - -
We now consider the
district court's modified preliminary injunction, which obligates Napster to
remove any user file from the system's music index if Napster has reasonable
knowledge that the file contains plaintiffs' copyrighted works. Plaintiffs, in
turn, must give Napster notice of specific infringing files. For each work
sought to be protected, plaintiffs must provide the name of the performing
artist, the title of the work, a certification of ownership, and the name(s) of
one or more files that have been available on the Napster [*1096]
file index containing the protected copyrighted work. Napster then must
continually search the [**4] index and block all files which contain
that particular noticed work. Both parties are required to adopt reasonable
measures to identify variations of the file name, or of the spelling of the
titles or artists' names, of plaintiffs' identified protected works.
The
district court carefully monitored Napster's compliance with the modified
preliminary injunction. It required periodic reports from the parties and held
several compliance hearings. The district court also appointed a technical
advisor to assist in evaluating Napster's compliance.
Napster was able
to prevent sharing of much of plaintiffs' noticed copyrighted works. Plaintiffs
nonetheless were able to present evidence that infringement of noticed works
still occurred in violation of the modified preliminary injunction. After three
months of monitoring, the district court determined that Napster was not in
satisfactory compliance with the modified preliminary injunction. The district
court ordered Napster to disable its file transferring service until certain
conditions were met and steps were taken to ensure maximum compliance.
The record company plaintiffs and the music producer plaintiffs appeal
the modified preliminary [**5] injunction, and Napster
cross-appeals. n2 Napster also appeals the district court's shut down order.
- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - -
- - - - - - -
n2 Five separate lawsuits against Napster have been
consolidated into a multidistrict litigation proceeding before the district
court. The district court entered substantially similar modified preliminary
injunctions in each case. See, e.g., A&M Records, Inc. v. Napster, Inc.,
2001 U.S. Dist. LEXIS 2186, 2001 WL 227083 (N.D. Cal. Mar. 5, 2001). Variations
in the preliminary injunctions are not relevant to this appeal.
-
- - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -
II We review de novo the legal premises
underlying a preliminary injunction. Does 1-5 v. Chandler, 83 F.3d 1150, 1152
(9th Cir. 1996). Otherwise, we review for abuse of discretion the terms of a
preliminary injunction. Gorbach v. Reno, 219 F.3d 1087, 1091 (9th Cir. 2000) (en
banc). "As long as the district court got the law right, it will not be reversed
simply because [we] would have arrived at a different result if [we] had applied
the law to the facts of [**6] the case." Gregorio T. v. Wilson, 59
F.3d 1002, 1004 (9th Cir. 1995) (internal quotation marks and citation omitted).
III Plaintiffs challenge the requirement that
they provide file names found on the Napster index that correspond to their
copyrighted works before those works are entitled to protection. Plaintiffs
argue that Napster should be required to search for and to block all files
containing any protected copyrighted works, not just those works with which
plaintiffs have been able to provide a corresponding file name. Napster, on the
other hand, argues that the modified preliminary injunction's articulation of
its duty to police is vague and fails to conform to the fair notice requirement
of Federal Rule of Civil Procedure 65(d).
We are unpersuaded that the
district court committed any error of law or abused its discretion. The notice
requirement abides by our holding that plaintiffs bear the burden "to provide
notice to Napster of copyrighted works and files containing such works available
on the Napster system before Napster has the duty to disable access to the
offending content." Napster, 239 F.3d at 1027. Napster's duty to search
[**7] under the modified preliminary [*1097] injunction
is consistent with our holding that Napster must "affirmatively use its ability
to patrol its system and preclude access to potentially infringing files listed
on its search index." Id. The modified preliminary injunction correctly reflects
the legal principles of contributory and vicarious copyright infringement that
we previously articulated.
Napster's challenge on grounds of vagueness
is without merit. A preliminary injunction must "be specific in terms" and
"describe in reasonable detail . . . the act or acts sought to be restrained."
Fed. R. Civ. P. 65(d). We do not set aside injunctions under this rule "unless
they are so vague that they have no reasonably specific meaning." E. & J.
Gallo Winery v. Gallo Cattle Co., 967 F.2d 1280, 1297 (9th Cir. 1992). Napster
has a duty to police its system in order to avoid vicarious infringement.
Napster can police the system by searching its index for files containing a
noticed copyrighted work. The modified preliminary injunction directs Napster,
in no vague terms, to do exactly that.
IV
Napster challenges the district court's use of a technical advisor.
Napster does [**8] not contest the appointment of the advisor but
rather challenges the manner in which the district court relied on the advisor.
Napster argues that the district court improperly delegated its judicial
authority. We disagree.
At no time did the technical advisor displace
the district court's judicial role. The technical advisor never unilaterally
issued findings of fact or conclusions of law regarding Napster's compliance.
See Kimberly v. Arms, 129 U.S. 512, 524, 32 L. Ed. 764, 9 S. Ct. 355 (1889)
(holding a court may not, through appointment of a master or otherwise,
"abdicate its duty to determine by its own judgment the controversy presented");
Reilly v. United States, 863 F.2d 149, 157-58 (1st Cir. 1988) (stating a trial
court may not rely on technical advisor to contribute evidence, determine legal
issues or undertake independent factual findings).
The district court's
use of the technical advisor was proper.
V
Napster challenges the district court's shut down order. The district
court was dissatisfied with Napster's compliance despite installation of a new
filtering mechanism. The new filter analyzed the contents of a file using audio
[**9] fingerprinting technology and was not vulnerable to textual
variations in file names. Napster had voluntarily disabled its file transferring
service to facilitate installation and debugging of the new filtering mechanism.
Users were still able to upload files and search the Napster index during this
period. The district court ordered Napster to keep the file transferring service
disabled until Napster satisfied the court "that when the new system goes back
up it will be able to block out or screen out copyrighted works that have been
noticed . . . . and do it with [a] sufficient degree of reliability and
sufficient percentage [of success] . . . . It's not good enough until every
effort has been made to, in fact, get zero tolerance . . . . The standard is, to
get it down to zero." The shut down order was issued after the parties had filed
notices to appeal the modified preliminary injunction.
Napster contends
that the shut down order improperly amends the modified preliminary injunction
by requiring a non-text-based filtering mechanism and ordering a shut down of
the system pursuant to a new "zero tolerance "standard for compliance.
[*1098] Napster additionally argues that the district
[**10] court lacked authority to further modify the modified
preliminary injunction while the injunction was pending on appeal.
A.
Napster argues that the new filtering
mechanism is unwarranted as it lies beyond the scope of Napster's duty to police
the system. By requiring implementation of the new filtering mechanism, the
argument goes, the shut down order fails to recognize that Napster's duty to
police is "cabined by the system's current architecture." Napster, 239 F.3d at
1024. We are not persuaded by this argument.
"Napster []has the ability
to locate infringing material listed on its search indices, and the right to
terminate users' access to the system." Id. at 1024. To avoid liability for
vicarious infringement, Napster must exercise this reserved right to police the
system to its fullest extent. Id. at 1023. The new filtering mechanism does not
involve a departure from Napster's reserved ability to police its system. It
still requires Napster to search files located on the index to locate infringing
material.
A district court has inherent authority to modify a
preliminary injunction in consideration of new facts. [**11] See
System Federation No. 91 v. Wright, 364 U.S. 642, 647-48, 5 L. Ed. 2d 349, 81 S.
Ct. 368 (1961) (holding that a district court has "wide discretion" to modify an
injunction based on changed circumstances or new facts); Tanner Motor Livery,
Ltd. v. Avis, Inc., 316 F.2d 804, 810 (9th Cir. 1963) (same). Napster's original
filtering mechanism was unsuccessful in blocking all of plaintiffs' noticed
copyrighted works. The text-based filter proved to be vulnerable to user-defined
variations in file names. The new filtering mechanism, on the other hand, does
not depend on file names and thus is not similarly susceptible to bypass. It was
a proper exercise of the district court's supervisory authority to require use
of the new filtering mechanism, which may counter Napster's inability to fully
comply with the modified preliminary injunction.
B.
Napster argues that the shut down order improperly imposes a new "zero
tolerance" standard of compliance. The district court did not, as Napster
argues, premise the shut down order on a requirement that Napster must prevent
infringement of all of plaintiffs' copyrighted works, without regard to
plaintiffs' [**12] duty to provide notice. The tolerance standard
announced applies only to copyrighted works which plaintiffs have properly
noticed as required by the modified preliminary injunction. That is, Napster
must do everything feasible to block files from its system which contain noticed
copyrighted works.
The district court did not abuse its discretion in
ordering a continued shut down of the file transferring service after it
determined that the new filtering mechanism failed to prevent infringement of
all of plaintiffs' noticed copyrighted works. Even with the new filtering
mechanism, Napster was still not in full compliance with the modified
preliminary injunction. The district court determined that more could be done to
maximize the effectiveness of the new filtering mechanism. Ordering Napster to
keep its file transferring service disabled in these circumstances was not an
abuse of discretion.
C.
Napster argues that the
district court lacked authority to modify the injunction [*1099]
pending appeal. The civil procedure rules permit modifications. While a
preliminary injunction is pending on appeal, a district court lacks jurisdiction
to modify the injunction in such manner as to "finally [**13]
adjudicate substantial rights directly involved in the appeal. " Newton v.
Consolidated Gas Co., 258 U.S. 165, 177, 66 L. Ed. 538, 42 S. Ct. 264 (1922)
(citations omitted); Stein v. Wood, 127 F.3d 1187, 1189 (9th Cir. 1997). Federal
Rule of Civil Procedure 62(c), however, authorizes a district court to continue
supervising compliance with the injunction. See Fed. R. Civ. P. 62(c) ("When an
appeal is taken from an interlocutory or final judgment granting, dissolving, or
denying an injunction, the [district ]court in its discretion may suspend,
modify, restore, or grant an injunction during the pendency of the appeal . . .
as it considers proper for the security of the rights of the adverse party.").
The district court properly exercised its power under Rule 62(c) to
continue supervision of Napster's compliance with the injunction. See Meinhold
v. United States Dep't of Def., 34 F.3d 1469, 1480 n.14 (9th Cir. 1994) (holding
modification of preliminary injunction during pendency of appeal was proper to
clarify injunction and supervise compliance in light of new facts).
VI We affirm both the modified preliminary
injunction [**14] and the shut down order. The terms of the modified
preliminary injunction are not vague and properly reflect the relevant law on
vicarious and copyright infringement. The shut down order was a proper exercise
of the district court's power to enforce compliance with the modified
preliminary injunction.
AFFIRMED.