The Circuit Court concurred with the trial court’s conclusion that Napster users were most likely infringing on plaintiffs’ copyrights directly.

The Court decided on the following points:

1. Fair Use: The Circuit court concurred with the district court’s “general analysis of Napster system uses” along with its consideration of the three “alleged fair uses identified by Napster” – “sampling, where users make temporary copies of a work before buying; liberal distribution of songs by both new and established artists; and space-shifting, when users access a sound recording through the Napster system that they already own in audio CD format.”

The First Four Pointers considered by the court are as follows:

• • • The purpose and nature of the use, including whether it is for commercial or educational purposes;
    • Secondly, the court considered that what was the nature of the copyright work;
    • The size and significance of the piece used in relation to the entire copyrighted work; and
    • Lastly, the court examined the impact of the use on the copyrighted work’s potential market or value.

Even though no sales were made, Napster’s platform allowed for “repeated and exploitative” copying, which satisfied the definition of the first criteria. Furthermore, songs were discovered to be “near to the core” of the types of creative works expected to be protected by copyright, and complete songs were acquired, pitting Napster against the second and third factors. Finally, the effect of the downloads was discovered to be detrimental to potential record sales, putting an end to Napster’s case for a fair use defence.

As for the second claim which was of contributory infringement, Napster was well aware of massive infringement on its system, and its policing measures were woefully inadequate. Furthermore, because Napster was a substantial contributor to the infringement, the appellants are likely to prevail on this allegation. Consequently, the court determined that Napster’s lack of effort to limit infringement, along with the fact that the corporation gained financially from it, rendered vicarious infringement success plausible.

As a consequence, the court ordered the creation of an adequate injunction against another future infringing activity by Napster in accordance with its ruling.

The Napster ruling is a clear triumph not only for the music business, but also for the idea that intellectual property in cyberspace should be subjected to the very same legal scrutiny as it is in real life. The court gave Napster little credit as a technological advances that promotes freedom of expression and information access. Rather, it advocates for classical copyright analyses and means of spreading copyrighted data.

2. The world after Napster

The music industry was horrified by Napster, but it also showed how digital distribution could be beneficial. The ability to interact directly with a single customer without the hassle and expense of a physical distribution network is one of the most important. The music industry started to see PC and Internet technology as important marketing tools for recording artists and labels. Label websites could also be used to advertise new releases, supply music samples, and enable close proximity access to an artist’s back catalogue. Although this may seem that the industry has wedded to established revenue models, a variety of pay-per-download and online subscription services started being tested.

3. Napster from Indian Point of View

• • • Under the Indian law, copyright Infringement is said to have done only when:
    • Either the copyright wok is stored or reproduced;
    • There is selling or hiring involved;
    • Copies of the work are issued to the public;
    • The work is communicated to the public or is performed for the public;
    • If the work is translated or turned into any adaptation.

Therefore, the activities that were held to be an infringement in Napster’s case will not apply to India.

One more point that should be noted is that, in India broadcasting any copyright work without the license from the owner is considered infringement, but no broadcasting is happening in the case of Napster.

Until and unless the courts interpret the facts and decide on the point of infringement the legal position will remain unclear. Although in India, western thought is readily acceptable. But one thing that should be kept in mind is there no statutory right available against such infringement.

If Napster wants to claim immunity, it can do so under the IT Act, 2000 under network service provider provision. A network service provider under this section can claim immunity if he proves that such contravention was outside the scope of his knowledge.