1. This is an action for copyright infringement arising under the copyright laws of the
United States, Title 17 United States Code, 101 et. Seq. ; and for related claims of unfair
competition, accounting, indemnification and Declaratory Relief,
2. Original jurisdiction of this action is conferred upon this court by Title 28, United
States Code §§ 1331 and 1338(a) and, for the related claims of unfair competition,
conversion, and interference with economic relations, by § 1338(b).
3. Venue is proper in this district under 28 United States Code §§ 1391 and 1400(a).
THE PARTJ~~
4. Plaintiff, MATTHEW KATZ is a producer and owner of music having created the
bands Jefferson Airplane, Moby Grape, It's a Beautiful Day, Indian Puddin' and Pipe,
Tripsichord, Fraternity of Man, Freelight. Little Eva, Tim Hardin, Blue Darts, Rainforest
Rhapsody in the Key of Bali, and Rainforest Rhapsody in the Key of Hawaii. Plaintiff is a
resident within the geographical jurisdiction of the United States District Court, Central District
of California.
5. Plaintiff is informed and believes and based thereon alleges that Defendant
BERTELSMANN eCOMMERCE GROUP, (hereinafter referred to as, "Bertelsmann") is a
foreign corporation based in Germany but is a partner and owner of co-defendant
naRster.com by virtue of an investment in the approximate sum of a $50 Million private
investment.
6. The true names and capacities of all defendants sued herein as DOES 1 through
38,000,000, are unknown users of Napster whom Plaintiff therefore sues by such fictitious
names. The true names and capacities of all defendants sued herein as DOES 38,000,001
I through 38,010,000, are unknown to Plaintiff who therefore sues said defendants by such
fictitious names.. Plaintiff will seek leave of Court to amend this Complaint to state their true
names and capacities when the same has been ascertained. Plaintiffs are informed and
believe and on that basis aver that said defendants are liable to plaintiff as a result of their
participation in all or some of the acts hereinafter set forth.
COMPLAINT
2
~RELIMINARY ALLEGATIONS
7. Napster, Inc. operates a wen site at oaRster.com which enables it's users to make
unauthorized copies of copyrighted music on an unprecedented scale. By its own account,
Napster is responsible for allowing millions of unauthorized downloads of copyrighted songs
24 hours a day, every day of the week. In Japan, Austrailia, Germany, England, and China
nearly every hit song by every significant recording artist can be found on oaRster.com.
Napster's unscrupulous "music free for all" continues to attract users at a rate unmatched in
the history of the Internet. Plaintiff filed a Complaint against many parties, including Napster,
Inc. in July, 2000 in U.S. District Court, Central District of California, bearing case number 00-
07966. At the time Plaintiff filed his complaint, Napster, Inc, had 20 million users. As of
November, 2000, Napster has an estimated 38 million users a staggering nearly 100%
increase in a scant 4 months. Attached hereto as Exhibit "A" is a report from Cyber Atlas,
which shows that in just one month from April to May of 2000, Napster grew from the 99th to
the 48lh most popular site on the Internet, surpassing several media giants including ESPN
and MTV. Attached hereto as Exhibit "8" is a complete printout of an article on Napster, which
was the June 5, 2000, cover story on Newsweek Magazine.
8. The possibilities afforded by the digital distribution of music have sparked an
entrepreneurial zeal. Internet start-ups are creating exciting businesses to take advantage of
the opportunities that these new technologies make possible, Unfortunately, in addition to
creating opportunities for new and creative models for legitimate business, the Internet has
also created a new avenue for piracy on an unprecedented scale. Physical goods piracy in
the United States costs the recording industry over $1 billion per year. Around the world,
physical goods piracy costs the recording industry $4.5 billion annually.
9. Until Napster utilizes a legitimate fee based system, it's piracy activity will continue
unabated. Napster will use the pirate market to control music distribution not only in the
United States, but around the globe. The worldwide growth of creativity will be stifled and the
music industry will slowly cease to exist. Bands, which once sought to be discovered, will no
longer have incentive to create quality music. Movies, television. literature, poetry and art will
foll~ and soon the World will be devoid of the arts,
,"
COMPLAINT
3
10. In an effort to ensure its growing legion of users a safe haven for piracy, Napster
promises complete user anonymity by collecting no user data. The site boasts that it does not
maintain logs of activity or other information that could be subpoenaed to reveal the infringing
activities of its users. It is also impossible to save or print a search result, which made it nearly
impossible to gather evidence of the infringing users. Plaintiff was forced to acquire a special
software program, which produced the printouts attached hereto as Exhibit "C".
11. Napster enables this massive infringement to occur by providing its users with a
hub of central computer servers, which constantly index a database of available songs, along
with proprietary software to facilitate the rapid and efficient copying of those recordings. Once
connected to Napster's servers, Napster users choose which songs they would like to
download from other Napster users. Likewise, users choose which of their own song files
stored on their computer hard drives they want to make available for copying by the tens of
millions of Napster users. In providing this search and copy service (completely free to
Napster users), Napster has attracted a substantial user base which will allow it to generate
millions of dollars in future revenues from advertising and product sales. Indeed, despite the
fact that Napster had no source of revenue, as of November 1, 2000, Defendants have
successfully acquired $67 million dollars in venture capital, private investment and
partnerships into and with the company. Napster's largest investor, Defendant
BERTELSMANN eCOMMERCE GROUP can particularly benefit from the partnership by
paving the way to eventually make the site available to customers on a fee basis and reap the
majority of the profits as owner of 40% of the Napster, Inc. shares. Napster's second largest
investor, Hummer Winblad, can benefit from the list of millions of Napster users in that it is the
primary owner in a similar website at ~.Iiauidaudio.com. Thus, Napster, its cohorts and the
Defendant herein. will continue to build a thriving business and customer base on the daily,
massive, and unauthorized infringement of copyrighted music, to the theft and damage to
Plaintiff and the artists he has ever represented.
~ c
COMPLAINT
4
12. Most Internet piracy of sound recordings is accomplished using a technology I
known as MP3, which stands for Motion Picture Expert Group 1, Audio Layer 3. MP3 is simply'
an algorithm that compresses a digital music file by a ration of approximately 12: 1, thereby
reducing the size of the file so that it more easily and quickly can be downloaded over the
Internet. Once downloaded, (i.e. copied and saved to a computer hard drive) a music file can
be played from the computer, or further copied for use with home or car stereo equipment, or
portable players designed for use with MP3 music.
13. While there is nothing inherently lawful about the MP3 format, the predominant use
of the MP3 format is in the trafficking of pirated sound recordings This fact is well known, has
been reported widely in the press, and is known to defendants. It also is well known, and has
been widely reported, that no established record companies have authorized their
commercially released sound recordings to be reproduced and distributed in the MP3 format
because the MP3 format does not contain any anti-piracy security coding.
14.. Napster promotes its service as "Iist(ing] only those files available right now " for ,
immediate download. To do this, Napster continuously monitors millions of users to keep
track of when they log on and off. As soon as a user logs on, that user's MP3 music files are
inventoried and added to the Napster song file database. As soon as a user logs off, that
user's song files are identified and eliminated from the database. Thus, Napster actively
updates its database millions of time each time.
15. Napster does more than simply tell users what songs are available and which users
have them. Napster creates an actual "link" to each respective music file. Thus, the only thing
Napster users need to do to get the music they want is click on the song. The Napster
software automatically downloads the music file from one Napster's users' hard drive and
saves it to the other users' hard drive. Napster facilitates the entire transaction,
16. Napster stays involved in the entire download process to ensure that the
d1sVibution and copying of the selected recording is completed. In the event a download is
COMPLAINT
5
interrupted because, for example, the user offering the recording has logged off, Napster will
automatically locate the same recording from another Napster user and resume the download
at the point it was interrupted, all without any involvement by the infringing Napster user.
Napster touts itself as the "world's largest MP3 music library". It brags that "Napster ensures
the availability of every song online by connecting you live with millions of songs found in
other MP3 listeners' music collections. With Napster, you'll never come up empty handed
when searching for your favorite music again". Napster also has boasted that, through its
service, "you can forget wading through page after page of unknown artists".
17. Plaintiff, creator of the original world famous San Francisco bands, including
Jefferson Airplane, Moby Grape and It's a Beautiful Day, played a large part in creating and
has been involved with the San Francisco music scene since it's inception in the early 1960'5.
Other original San Francisco Bands who are also hurt by Napster's thievery include:
Quicksilver Messenger Service, Country Joe and the Fish, Tripsichord Music Box, Janis Joplin,
Big Brother and the Holding Company, Indian Puddin' and Pipe, Fraternity of Man, Tim Hardin,
Buffalo Springfield, The Young bloods and The Grateful Dead. These bands heavily
contributed to the shaping of American culture and deserve the fruit of their labor, which
Defendants continue to take for themselves.
18. At all times relevant herein, Defendants had the right and ability to supervise and
control the infringing conduct of its users by refusing to index and create links to infringing
music files, but Defendants have failed and refused to exercise such supervision and control.
Defendants could very easily refuse to perform its search and copy service for songs, which
the owner has not given authorization. Defendants have not done so however, because
Defendants know its success is dependent on stealing from artists who would never allow their
music to be given away. Defendants should only index, search and copy songs which the
artist has given consent. For example, a new or unknown artist may wish to give away music
or Ewen .an established artist may wish to allow certain songs to be given away.
COMPLAINT
6
19. On many occasions over the last year, Defendants have been given notice that it's
millions of users are violating copyright laws by nearly every record company in existence.
The Recording Industry Association of America, along with Ilurnerous artists including
Metallica and Dr. Dre. have requested that Defendants cease and desist their activities.
Plaintiff supports the position taken by these artists. Attached hereto as Exhibit "D" are letters
dated May 30, 2000, June 1, 2000, June 15, 2000 and June 16, 2000 in which Plaintiff gave
defendants notice of his copyright and trademark rights along with his exclusive right to
manufacture and sell musical recordings. Despite Plaintiff's notice and demand to cease and
desist. Defendants knowingly continue to allow its users to search and copy Plaintiff's music in
violation of the laws of copyright. Defendant's willful conduct is despicable and has caused
and continues to copy Plaintiff's music in violation of the laws of copyright. Defendant's willful
conduct is despicable and has caused and continues to cause Plaintiff grave and irreparable
harm.
20. In 1968, Plaintiff applied to the Register of Copyrights for the .:It's a Beautiful Day"
musical composition llBulgaria". The Certificate was issued by the Register of Copyrights in
November of 1968 as Copyright Reg. No. EU 83452 (herein referred to as "Musical
Composition").
21. In 1966, Plaintiff applied to the Register of Copyrights and received Certificates of
Registration for at least the following "Moby Grape'. musical compositions:
~"Omaha" Copyright Reg. No. EU 2037;
"Come in the Morning", Copyright Reg. No. EU 2038;
"Eight O Five~, Copyright Reg. No. EU 2039;
"indifference", Copyright Reg. No. EU 2040;
"Mister Blues", Copyright Reg. No. EU 2041 ;
"Fall On You':, Copyright Reg. No. EU 2042;
"Sitting Bv The Window~, Copyright Reg No. EU 2043;
~ ,
COMPLAINT
,..
7"Chanqes", Copyright Reg. No. EU 2044;
~.8in't No Use", Copyright Reg. No. EU 2045;
"Lazv Me", Copyright Reg, No. EU 2046;
"Naked If I Want TQ", Copyright Reg. No, EU 2047;
"Hev Grandma", Copyright Reg. No. EU 2048;
"Somedav", Copyright Reg. No. EU 11568
22. In addition to such copyrighted work, Plaintiff is the publisher and claims the
exclusive rights to certain compositions written by Bob Mosley, Skip Spence, Jerry Miller, Don
Stevenson, and Peter Lewis, as performed on Moby Grape Records (Musical Compositions)
and all related artwork. The Musical Compositions referred to above include, but are not
limited to Moby GraDe's self-titled first album (SFS04805), the Heart Album (SFS 04830), and
Mob~ GraDe Live at Indigo ranch (SFS 04880).
23. Plaintiff is also the publisher and claims the exclusive rights to certain compositions
written by Skip Spence, Marty Balin, and Paul Kantner from the band Jefferson AirDlane
including the at least the following compositions: (1) Don't Slip Away; (2) Blues from an
Airplane; (3) Runaround; (4) JPP McStep Blues; (5) Runnin' Round this World; (6) It's Alright;
and (7) My Best Friend.
24. Plaintiff is the also the publisher and claims the exclusive rights to certain
compositions written by the following bands Indian Puddin' and Pipe, Tripsichord, and
Fraternity of Man, Freelight, Little Eva, Tim Hardin, Blue Darts, Rainforest Rhapsody in the
Key of Bali, and Rainforest Rhapsody in the Key of Hawaii.
25. Additionally, plaintiff has entered into various agreements by which he has
obtained the sole, exclusive, and complete right to manufacture, distribute, and sell
phonorecords embodying certain Moby Grape and It's a Beautiful Day recorded musical
performances some of which were initially "fixed" prior to February 15, 1972, and therefore are
subject to protection under state statutory and common law.
~ .
.COMPLAINT
8"26. Napster, Inc. and its partner / shareholder / owner of 40% stock, Defendant
BERTELSMANN have jointly engaged in piracy activities since October 30, 2000 when
Bertelsmann became partners with, and shareholder of, Napster, Inc. by paying $50 million
into the company. Napster and Defendant BERTELSMANN have utilized napster.com to gain
access to sound recordings containing Plaintiffs Musical Compositions in their entirety and
thereafter distributed such Musical Contributions as their own. Napster, Inc. has made
unauthorized copIes of Plaintiff's music by copying the music set out above from the hard
drives of napster.com users and has then, with BERTELSMANN, made that same music
available to other napster.com users via Napster's search and copy service.
27. Since at least October 30, 2000, Defendant BERTELSMANN has disseminated
sound recordings containing Plaintiff's Musical Compositions in large volumes throughout the
United States and many foreign countries.
FIRST CAUSE OF ACTION
FOR CONTRIBUTORY COPYRIGHT INFRINGEMENT
(Against all Defendants)
28. Plaintiff repeats and realleges paragraphs 1 through 27 with the same force and
effect as though set forth here at length
29. As described above, a tremendous amount of copyright infringement of Plaintiffs
music takes place on and by virtue of Defendants' napster.com service every day. These
infringements occur whenever a Napster user, (DOES 1 through 38,000,000), without the
authorization of Plaintiff, downloads an MP3 version of Plaintiff's music from another user's
computer onto his or her own. Each and every one of these infringements is facilitated,
encouraged and made possible by Defendant BERTELSMANN.
30. At all times relevant herein, Defendant had the right and ability to supervise and
control the infringing conduct of Napster users from October 30, 2000 to present by refusing to
fina!J,f
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