eff: district zomba complaint

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MAY 24 2001 6139 PM FR PROSKAUER ROSE

~AnJRE 0' AcrION

This is an action for contributory and vicarious copyright infringement andt

relatedstate aw claims arising out of the willful conduct of defendants ohn A. Deep,

AbovePeer, nc., and BuddyUSA, Inc. ("defendants"). Acting in concert. defendantshave built,

maintain. and control a computersystem,known as Aimster. that they designedspecifically to

facilitate and encomagemillions of individual anonymoususers o copy an<idistribute nfringing

Napster,which currently is subject o . preliminary injunction as a result of its contributOryand

vicarious copyright nfringanent. A&M Recordf. Inc.. et al v. Napster, nc., N.D. Cat., CaseNo.

C-OO-1369. Among he artistswhoseworksatebeingunlawfullydistributedhrough he

Aimstersystem re: he Beetles. ritDeySpears. haDia ~ Destiny'sChild. Sarah

McLachlin-CclineDion, U2-Nirv8Da,PearlJam,MariahCarey,~ Janet ackso11,ackstteet

. ," ,"-

Boys,Elvis Presley. ting,GarthBroob.~n-aa'Yt;;Sh'l;ryl crow, PaulaAbdul,LL Cool J.

Ricky Mattin, N Sync, Bob Dylan, Lauryn Hill, and numerousothers.

Defendantswell know of the massive nfringementsoccumng by and,

through he Aimster system. Defendants nitially created heir system n order to capitalize on

themarketplaceu~~.esshat Napstcr achievm and o supplan1Napster as the pi~f~~ fonun for

the unlawful copying and distribution of copyrightedworks. lkfendant Deep not only admib the

desite o takeover~ Napster as eft off, but bu boastedo the press hat~.re the next

technicalnnovation ponNapster" ndhascalled he Aimstersystem Napster q~ ..

Indocd,d.t8rJdaDu"pcou rel~ on the AimStea'website <www.almstcr.corn> annoUDCea

AJmster a "RevoJutionary aJ1't.cf-LikcpplicationUnvciJcd."



Defendants learly have he ability to control the works available on their.

$YStem.ncluding through he useof a variety of technologies. Aimster also acknowledgeshe

ability to remove !serBor. alternatively. o exclude certain con~nt. Insteadof cmploYinasuch:

technologiesor policies, defendants ave chosen o build a businesson the massive nfringement

of copyrighted orks.

Prior to the tiling of thj., suit, the Rccotding Ind\IItry Association of.

America. Inc. ("RIM"). on behalf of its members.nvitedDeepandBuddyUSA to meetand

discuss hesc ssues n an attempt o resolve hem and to avoid further infringement. Deep and

Buddy USA initially indicated, hrough their alleged ncoming PresidentJohn Cavalier. hat they

wanted o engage n such a discourseand ostensiblyscheduleda meeting widl the RIAA.

DefendantS bruptly cancelled he meeting mortly before t was 10begin, claiming tbat they

, oould not book a flilht from Albiny, ~;fiMto rN89hington,D.C.

s. SUbsequcntly. secondmeeting was scheduled. Buddy USA, through Mr.

Cavalier. ndicated t hid been aking steps o address he massive nfringement occurring over

the Aimster system, hat, in preperation or the S«.oI¥i scheduledmeeting, hey would send1ft 0-

mail to the RIM outlining the steps hey bad been aking, and they would make someone

available t the meeting o conduct demonstrationf these~~. Thedaybefote his

secondscheduledmeeting,Buddy USA sent a letter confinning its intent to add blockina

technololY to Its softwllO, and aL,o ndicated hat it was transferring he domain name of

Aimatcr.com o anothercmity. On~ api~ however, Buddy USA and Deep cancelled his

set.oro cheduled eeting heday t was o takeplace, On 1hcverynext b~~~! day.

3



MAY ~4 2001

defendantsBuddyUSA and AbovePeer iled anticipatory declaratOryudgment actiOD$ gainst he

RIAA, seekinga declaration hat defendants'unlawful cond~ was, n fact, lawful

It is now clear hat defendants ad "scheduled hosemeetingsand sent6.

communications o the RIM solely to delay while they S\1freptitiously reparedand filed

anticipatory strategic awsuits a&ainst he RIM After defendants ancelled he m~tings and

filed their lawsuits, he RIM againput defendants n notico of the massive nfringement

occurring on the Aimster system,and again gavedefendants,ncluding AbovcPea:,an

opportunity o address hese ssuesoutsideof litigation. Defendantshave failed to ~poDd to any

of the RIM's ovenures. xcept o amendheir complaintso addadditional efendants.Given

defendants'persistent efusal o rectify their conduct and heir failure to provide plaintiffs with

any protection or their copyrightedworks, plaintiffs had no choice but to file this action to

protect heir rights, which are being nfringed by ~t:tam.~ with impunity and on a massive

Koale.d dOscribcderein. ~

7. Dcfcndantst xprcsapurpose s to enableand encourage heir growing user

bLw -. uncntly arowina by at leaStone million per month- o make available anonymously

over he nternet o other~ of the Aimstcrsystemmillions of W1aUthoriz.edopies f

plaintiffs' gopyriihted sound ecordings,as well as other oopyrlihted worts, for copying aDd

furtherunlawfuldistribution.As defendant eephaspromoted,AlmsterJeflects significant

Step oward implementing univeI'Sal tleo.sharina."The sound recordinas eprod.uoed nd

distributed without authorizationover Aimster at'e argely compdsed of hit aoDSSy most, if not

all. of the top artiSts n the Iecording ndUS1l'yoday. M defendantsare well aware.virtually all

4



MAY Z4 zeel

of these eproductionsand distributions are nfringing and n violation offcderal copyright and

stareaws.

8, Dcfendantsenable his infringement o occur by providing Aimster users

with a fully intcarated nfrastructureand faciliuCl - ncludirtg a hub of central computer ~ers

to which usersconnect;a continuoU$ly pdateddatabase nd ndex of infringing recordings;

information about he soundquality and download speedof' files containing those ecordings;

proprietarysoftware o faeilitate the rapid and efficient identification, copying, and distribution

ofthoac recordings;continuoussupportand back office administration;and a host of other tools

- ll of which. by design,enableand encouraceusersof the Aimster system o make heir

individual. and previously private, ibraries of sound ecordhtgsavailable or instantaneous

distribution to and copying by countlessother Aimster userswithout authoriation of the

copyright owners. Defendants hus have deliberatelycreatedand are opcrating md benefitting

ftom a new haven or massivemusic piracy on the Ifttemet.

9. In exchange or providing (tree of charge o Aimster users) he facilides

and services hrough w~ch to infringe plaintiffs' sound ecordings.defendants eek o cultivate

an extensiveuser base hat will attract nvestmentdollm. advertisers,and businca perblcrs.

Plaintiffs' copyrighted ecordingsact as he primary "draw" to attract hat user base. Thus,

defendantsare building a businesson- and seek o profit from - he daily. massive copyright

infrinaement of plaintiffs' sound ecordingsd1at hey enableand encourage.

10. Through heir conduct,dcfendanUhave 1ni8\i8ed, nd 8Ie con1inuins o

mbuse, he powerfulpotentialoftbe Internetn flagrantandknowingdi~ ofdle rightsof

s



AVERMENTS COMMON TO ALL COUNTS

The Parties

Plaintiff Zomba R~ording Corporation s a corporation duly organized6.

and existing under he laws of the Stateof New York, with it$ principal place of business n New

York and n this District, and s duly qualified to transactbusiness n the StateofNcw York.

Plaintiff Caroline R.ecords,nc.. is a corporation duly orpnized and7.

existing under he laws of the Stateof New York, with its principal place of business n New

York and n this District, and s duly qualified to U'8DSaet usiness in the State of New York.

Plaintiff EM! Christian Music Group, nc. is a corporationduly organi7;ed8,

and existing under he taws of the StateofCalifomia, and s duly qualified to transactbusinessn

the Stateof New York.

PlaintiffNaradaProductions.nc., s a corporation uly orpn~ and9.

existing under the laws of the Stateof Wi~nsin, and s duly qualified to tIaDSaCtusincssm the

StateofNcw York.

PlaintiffNooTrybe Rec:.ords.nc.t i" a corporation duly organi~ and0,

existing under he laws of the Stateof Delaware.ana is duly qualified to transactbusiness n the

State of New York.

?



Plaintiff The FoIeFront CommunicationsGroup. Inc.. is a corporation duly1

organizedand existing under he laws of the Stateof Tennessee, nd is duly qualified to tl'aDs.:t

business n the Stateof New York.

PlaintiffPriorityRecords LC is a corporation uly organized ndexisting2

under he laws of the Stateof California, and s duly qualified to transactbusiness n the Stateof

New York.

Plaintiff Sony Discos Inc.. is a corporationduly organizedand existing3

\lnder the aws of the Stateof Florida, and s duly qualified to transactbusiness n the Stateof

New Yolk.

24 PlaintiffUMG R"ording~ Inc.. s a corporation uly organized nd

't:xiStingunder he awsof the Stateof Delaware, nd s duly qualifie<io transact ~ in the"

Stateof New York

25 Plaintiff BMO Music d/b/a The RCA RecordsLabelt is a New York

generalpartnel1hip,with its principal place of business n New Yom end n this District, and s

duly qualified tD ransactbusiness n the Stateof New York.

26. Plaintiff Motown Record Company,L.P. is a California li.mlted

partnershipwith iu principal place of business n New York and n this District, and is duly

qualified to transact bustneas n tho Statc of New York.

8



Plaintiff Loud RecordsLLC is a corporationduly organizedand existing7.

under he laws of the Stateof Delaware,with its principal placeof business n New York aDd n

this District, and s duly qualified to transactbusiness n the StateofNcw York.

Plaintiff HoUywoodRecords. nc., is a corporationduly organizedand8.

existing under he laws of the Stateof California, and s duly o.ualified o transactbusiness n the

Stateof New York.

Plaintiff SonyMusicEntertainment nc.. is a corporation duly organiz~9.

andexistingunder he laws of the Stateof Delaware,with its principal plac.e f business n New

Yark and n this District, and is duly qualified to transactbusiness n the Stateof New York.

Plaintiff Capitol Records, nc., is a corporationduly organizedand existing0.

wider the laws of the Stateof Delaware,and s duly qualified to transactbusiness n the Stati: of-~~=~

New York.

31. Plaintiff Arista Records. nc.. is a corporationduly organizedand e?dsting

under he laws of the Stateof Delaware,with its principe! plac.e f businessn New York - in

this District, and s duly qualified to transactbusiness n the Stateof New Yom.

32. Plaintiff Intmcopc Records. a Californiagencral h1p and s duly

qya1ifi~ to transactbusiness n the Stateof New York.

9



33.

Stateof New Yark.

34.

35.

36.

37.

38.

10



~Y 24 2001

Plaintiffs are nformed and believe and on that basisaver hat defendant9.

BuddyUSA. Inc., i. a COtporation organi2ed and existing under the laws of the Sta1cof Delaware

with its principal place ofbusincss in New York.

40. Plaintiffs are nfonned and believe and on that basis aver hat defendant

John A. Deep s an ndividual residing n the StateofNcw York. and that he is the Presidentof

defendantsAbovePeer, nc., and BuddyUSA.Inc., and s personally esponsible or and controls

thecondUCtf thedefcndanb ndof theAimster~ asaverred erein. Defendant eepalso

will financially benefit as the Aimster systemgrows.

41 Eachof the defendantsamed erein s, andat all ~ evened erein

~ apatty to the Wllawful activities averredherein. and/or acted n concert or combination with

eachof the other nameddefendantsand/or has ida'! and abettedsuchother defendants nd/or

basKited sanaaentor eaehof the ot1iti&te":r)da11t,Sith respect o the actionsand matters

described ll this Complaint.

At all times herein mentioned,eachof the defendants asa188ied in a2.

conspiraey. ommon mterpri.9C. nd common courseof conduct with the other defenda!'~. The

purposeof such conspiracy,common entelprise,and common courseof conductbasbeen,anong

other things, to scrve each defendants.own economic benefit by intentionally, pwposefully. and

willfully contributing to and benefitting from the inftingement of plaintiffs' c:oppigbu, exclusive

rights under copyrllht, and Itatc statutory and common Jawas averredherein, hroughout he

United Statesand the world. Each ofthc defendant.knowin,ly aIKi ntentionally has committed

11



acts n f11Itherancef the conspiracy, ommon enterprise, and common courseof condUCt, nd

each s liable for the actsand conductof the others.

Pla.intift's' BuiDes~

43 Plaintiffs are engagedn the businessof producing sound ecordings,aDd

manufacturing.distributing, selling. and/or icensing he distribution and sale of their solmd

compactdiscs and by digital distribution over the Internet) or arranging o do so n the United

the United Statesand the world.

~ 44

to dJeseecording artists, other musicians,various mL9t unds established or such musicians'

benefit,producm, ter-hnicians nd other staff personnel,as ~ll as various other payments.

PJaintiffs nd heir recording rtisu arecomp~~!ed for their creative «ortsandmonetary

investments argely from proceeds rom the saleof phonorecordso thepublic~ license ees

from the reproduction,distribution, digital performance,or other exploitation of such

phonorecords. Absent such Ompcnsation, ~ftq and motivation are siphonedaway from artistS

and herecord ompanieshat UIOrd, manufacture, promote, and ctistribute thole woIkL 'l1le

12



~A,Y Z4 zee I

pool of fCSOurceSvailable or finding and promoting new Brtistashrinks, and recordina ntegrity

are diluted and conupted. The ultimate result s that the public'slC(;ess o a wide variety of

high-qualitymusical~rdings is sharply urtailed

Plaintiffs are the copyright owners Orownersof exclusive rights wxier5.

copyright widt respect o certain sound ecordingsembodied n their phonorecords,ncluding but

not limited to those isted on ScheduleA hereto and nCOlparatcd y ref.~I~i1Ceerein. (All s~h

SOWldecordings. ncluding but not limited to those dentified on ScheduleA. are refm'ed to u

the "Copyrighted Recordings.1 Each plaintiffhas applied for and/or receivedCertificatesof

CopyrlihtReaistration rom the Registerof Copyrights or its Copyriahted Recordings. E8':.fl

plaintiff has he exclusive rights, amongother thinas, to reproduce he CopyriahtedRecordings

in copiesor phonorec.ords nd o distribute copies of the CopyrightedRecordings n

phooorecord$o the public. If ncceuary, plaintiffs will seek eave o amend his complaint 0:>

identify specific Copyriptcd Recordings n addition ro thole ide!\tified in ScheduleA.

46. Additionally. plaintiUs have entered nto various aareements y which

theyobtainedhe sole.exclusive, ndcompleteight to manufacturetdistn"bUtc,n6 sell

phonorecords mbodyingcertain recordedmusical paiormances of popular recordine nists

which initially were "fixed" prior to Fcbnilry 1S. 1972tand h~reforeare subject o protection

under state statutOry and common aw, including but not limited to those dentified in ScheduleB

heretoand ncorporatedby referenceheMin. (All such sound ecordiJ1&Stncludins but not

limited o those dentifiedon Schedule . are eferredo as he "PIe-I m Reoordinp.

11



I~e lIurn.~ &l1dMultcPlr:a~

The nternet s a vast colleetion of interconnected omputers and computer7.

networks. It allows hundredsof millions of peoplearound he world to communicate reely and

easily with eachothcr. and o exchangedeasand nformation, including academic esearch,

literlIy works, financial data, music, movies, graphics,and an unending and eva-changing array

of other data.

48. The Internet offers tremendousopportunitiesor thc musicbusiness s

well as or evCIyODc ho loves music. Indeed, he Internetprovides distinct advantagesor

musie because, mlikc tangible prodUcts, t is pomble not only to market and sell music online,

but also to deliver it to the consumerdigitallyand nstantly ver he nternet.Record ompanies

~- including plaintiffs - echnologycompanies.and Internet companiesalike are creating exciting

businesseso permit the public to take advantage f the opportunities hat thesenew technologies

"\maKepossjble. rt

49. Unfommatcly.n addition o creating pportW1iticaor newandcreative

modeb or legitimate usinesses,he ntemctalsobasafforded pportUnitiesor thewide-seale

piracy of sound recordings. The most notoriouaexample o date bas beenNapster,which is now

subject o a federal court preliminary injunction to caae its iDftinging conduct. NotwitbstaDding

the obvious- nd adjudicated -unlawfulnessof much of the conduct 011he Napstm'~

dcfendentsereinarestriving o emulate,mproveupon,and epiKle hat~ (while

attemptina o co-opt its massiveuser base)..-,ith he Aimlter system hat they created Dd control.

Defendantsy have mproved he unctionality f dicir system eyondhatof Napstcrby

£nablinausers o eopy and distribute without authorizationnot only music files, but files

14



containing visual media, such as motioDS ictW'es nd photographs, nd computersoftware

programs.

so Technologyhas beenwidely distribUted hat enables ndividuals to copy a

song rom a commercially releasedCD onto the hatU drive of their computers 8 processkno~

as ~pping") and hen to compress his digitized file so that it is small enough o be readily

distributedover the Internet. Digitized music fues thus can be copied and distributed to

thousands, ven millions, ofpeople nearly nstantaneously.Once downloaded i.e., copied and

saved o a computer hard drive), a music file can be playeci rom the computer,or further copi«i

ontO home or car Stereo equipment, or portable players designed for use mtb downloaded music

51. Most Internet piracy of sound ecordings s accomplished~ing a

compression technoloi)'. Thebest-mown X.Ilnple is MP3, whichstandsor Motion Picture

ExpertGroup1.Audio Layer3. lYfP3s an algorithm hatcom~s a diaital music ile by a

ratio of approximately 12:1 thereby educing hesizeof the ile so hat t moleeasilyB qmckly

canbecopied. ransmi~ anddownloaded ver he ntemet. Thereareseveral ther

compressionechnologies for thia purpose.~ do not ncorporate nysecurity mbodied

in the music file to limit further copying and diJtribution ofthc sound ecording. Thus. on~ a

sound ecording asbeen onvertednto an unsecuredom~ fonnat, t c.n be copied

funher and distributed an unlimited number of times, without sipificant degradation n ~\Ind

quality. It is ~1l known, and has beenwidely reported, hat major record comP.aDieaave

generallynot authorized heir sound~rdinas to be reproducedand distributed n unsecw'cd

compressionOnnaIS such u MP3. h1Itoad, the8e r'eQOrd ompanies enerally aveoPted o

distributeheir recordings n the nternetn a sccuremanner,nOOrpOratinaDiaital Rights

,~



Management"nd echnOlogyo CDS\Jrehat ightsholders ndartistsarecompensatedhen

their works are copied or distributed.

The InfrinMnI Aimlter SYStem

The Aimster system hat defendants ave createdand which they control is52.

an extensive.highly integratedsystem hat anonymouslyconnectspeople ocated hroughOUthe

United Statesand the world who otherwisewould have r!o contactwith eachother, and

encourages nd enables hem to ~l their mv,ic files into a single database ontaining millioas

of such iles to enableAimst« userseasily o make unlawful copi~ of any and as many

recordingsas hey choose. Defendants ntentionally provide their uscn with anonymity so Ufo

prevent he owners of the copyrights n those ecordinp from leaming the identities of the

infringins users. Defendantsalso attempt o shield hemselves nd heir users rom pOtential

copyright nftinaemcnt claims by maintaining T emISof Service hat speciouslypurport to

prohibit hemonitoringof activityon heir service. ndhaveado~d encryptionechnology o

makemonitoring or infrinpment moredifficult. DefendantsrovideAilDJta-~ with the

infrastnlcture. acilities. technologicalmeans,and ongoing support and services o accomplish

these nfringements. Defendants olJectivelyare nvolved in and enable his process rom

beainniogo end.

53. Although defendantsAbovePcer, nc., and BuddyUSA, Inc., have eD

recently laimed-4/ter eiDI notified otthc ln8Ssi~ inftinganent occurring 01;1he Aimstcr

system,ashereinafter~ -- that heyareseparatendunrelated ntities. ne BuddyUSA)

purportedly providing $O~, and ho other (AbovePeer)purponedly providing 8CCCISotbc

Intemet, his is in f8ct a sbamconcocted n an attempt o escape iability for their infringing

16



BuddyUSA featuresonly two other click-thro\lgh wcbsiteson its Internet home pe.gc

Specifically, defendants rovide to Aimster users,at no cost, proprletarj54.

~

of those iles into a detailed and extensivedatabase nd directory which is mainta1.nedn the

AitnStet system'sserversand which defendantsmake available o all Aimster users. Defendants

further gather nformation about each ile to Wliquely dentifj it and, f it is a music filet to

detaminc he soundqualityof each ile.

Defendantscontinuously monitor thousands f userl to keep teck of whens.

they log ODand off. As soon as a user ogs on, that user's files are nventoried and added o the

17



circwnventing "firewall.," which are maintainedby computernetworks o prevent he

importation of unknown, unlawful. or suspectdata nto the netWork.

58 To further facilitate Aimstcr users' activities, defendants rovide usors

with a host of other featuresand services, ncludina an "instant messaging" unction that perlnQ

users o exchange nformation about he location of infringing files to better enable hem to

downloadmusic;a "chat"areawhereusers an alk n real ime andwhere~ cananddo

indicate o other users ccordinp they are makiDgavailable or download or which they are

lookina to download; and a "buddy list" featW'Ohat allows ~ to keep rack of and download

from their fa'Voritemusic libraries postedby other users. Defendantsalso maintain a website,

<www.aim"tcr.com>.acccS!iblc rom the Aimster system. n which defendants rovide, &mOBg

conduct nd ocations n the nternet~ users andownload laycn on which o play he

- -, ,,- -~, ,music iles they have copied from other Aiiii\ter~. fIIowcver,a user doesnot need o tab

advantageof all or any of tllese features n order to copy and distribute copyrightedmusic over

the Aimster syBtem.

59. Each ime a sound ecording s downloadedover Aimster, the Aimster

usermaking the recording availableengagesn unauthorizeddistribution of that ~rding. 81d

the userwho do\1mloadst makesan \IDIuthorized copy or it That soW1docording s than mede

availableby the downloadinguser or further vira1distribution thIOUgboUthe:A!mster SYJtein.

At any iven time, mi11ioDSf files areavailableor downloadhrough he Aimatersystem.The

overwhelmingmajority of sound ccorotnp that dctCDdant8 ake available Oft he Aimster

systelnarebeingdistributed ndcopied n violationof ~ copyrl;ht aw andother aws.

10



60. The recordinp made available on the Aimster sYitom nclude many

recently released ecordings hat are available or copying within daysof their rel~ to the

public and, plaintiffs ate nfotmcd and believe, someeven before heir official releasedates.

Among the recordingsmade vailable y defendantsor copying le thoseof some f the most

popular recording artists ncludil18tbut in no way limited to. the Beatlcs,Britney Spears,Shanja

T~ Destiny'sChild, SarahMcLachlin,CelineDion, U2) Nirvana,PearlJam,Radiohead.

Mariah Cercy, SaderBlur, Ben H~, JanetJac~on. Lenny Kravitz. BackstreetBoYS.Frank

Sinatra.Elvis Presley,Sting. Lit, The Notorious 8.1.0., OutKast, Enigma. Oarth Brooks, Marvin

Gaye,Michael ackson.Sheryl Crow, SmashMouth, PaulaAbdul, Beck, ~ Cool J, Everclear,

DMX, Ricky Martin, N Sync, Bob Dylan, BUd auryn Hill. It is well known that artists of thb

caliber have recording agreementshat grant exclusive rights to recording companies ike

plaintift'1, and hat often limit the manner n which their recordingscan be used. DefendantsATe

consequently ware hat the reproductionand distribution of theseworks through he Aimster

!:t, ,

systemisinfringina.

61, Defendantsaveampleadditional nowledge f the nfringements

occurring on the Aimster system. ~ defendantsavecreatedheir system ndpromotet

specifically to capitalizeon ts infringinause. News epom quotingdcfr;ndant eepare eplete

with references o Aimster's role as the new Napstcr and to the vast nftingemenu taking pl.--e

on the Aimster system. Defendantshaveproudly postedseveralsuch articles on their websifiC.

62. The bulletin board "fonlmS" provided and maintainedby defendantson the

AimsterMbsite makenumerous fo~ to tho infringing cond~t taking pl~ on the Aiinlter

system,Aimster's similarity to Napster,and he fact that many NIP'tcr usersare now using the

20



and ncorporatedby referenceherein. In that notice, plaintift'a even provided defendantswith an

clecuonic list (for ca$eof Ute) of more that 500,000sound ecordingsowned or con1rollodby

plaintiffs aDd deD\A-:r!l1cdhat defendants ensw-e hat those works be blocked from the AimSter

system. Defendantshave refused o do 80.

66. On May 9. 200 , the RIM provided further written notice ofinfrinae ment

, ,Aimster system oday.

67. Unc~ed Internet iracy f the.ype~~ in by defendantsoses

grave isks to the sale of sound ccordinas ixed in CDs and apesand o the saleof sound

recoldinasOD he Intemet, as well as developmentof a legitimate online market for music.

PJaintiffssuffer lost salesof albumsand singles when COl~umers re able to download for Aoee

over the Aimster system he samesound eeordings hat plaintiffs are offorina to thoD1or sale.

Additionally. plaintiffs have nvestedenormousamountsof time. effort, and mopey n actu81 r

plannedentry into the market for the digital downloadins of music. Having digital downloads

availableor free on the Aimster systemnecessarilyand directly hamts plaintiffs' attempts o

charge or the samedownloads,as ~naumen will choosenee downloads over the Aimstei:

22



System ather han paying plaintiffs for thesedownloads. The AiInSter service hus creates

substantial arriers o plaintiffs'entry nto this marketandhasa deleterious ffecton he ~

and uture digital download market.

COYNTI

CONTRIBUTORY~ mGEMENTor ~OPYRIGHTS

[AgainstAll Defendants]

68. Plaintiffs ncorporate ereinby this refcrcnce achandeveryaverment

containedn plraal:aphsl hrough 7, nclusive.

69. Asdescribedabove, defendants rovide the site and facilities for the

tremendous mount of copyright nfringement that takesplace on and by virtue of the AimSfa'

systcmevery day. An infrinaement occurs cach and every ime ohe of the millions of A m8teT

users.without authorizationof the cop~ight owner. uploads he title of a music file to die

Aimster system's centralized index. husoft"eringt for distribution. ndeach ime anAimstei'

userdownloadsanotheruser's music file from that person's computer nto his or her own.

resulting n an unauthorizedcopy. Each and every one of these nUjngements s facilitated.

encoura&ed, nd madepoasiblcby defendants. Becausehe recordings hat defendantSmake

available or unauthorizedoopying and distribution are storedon individual users' hard drives.

thesesound ecordingswould not be available or illicit copying at all were it not for defendants.

70, Through heir conduct averredherein, defendants,and eachof them, have

enpged andcontinueo engagen the business fknowin&lyandsystematicallynducina,

?1



MFtY Z4 zeal 6147 PM FR PROSKAUE

~using. and materially contributing to the abovc-described nauthorited rcproduction and/or

distribution f copiesof the CoPyrlshted ecordinpand hus o the nfrinaement f plaintiffs',

copyrightsand exclusive rights under copyright in the CopyrightedRecordinp.

The infringement of eachof plaintiffs' rightS n and to the Cop)Tighted1

Recordingsconstitutesa separate nd distinct act ofinfr ingement.

The foregoing actsof i. fringement by defendants ave beenwillful,n.

intentional. and puIposefuI, n disregatdof md indifference o the rights of plaIntiffs.

Dcfendents'conduct., s avened herein, constitutescontributory3

infringement of plaintiffs' copyrights and plaintiffs' exclusive rights under oopyrlght n violation

of Sections106. lIS. and SOl of the Copyright Ad, 17 U.S.C. §§ 106, liS, and 501

74 As a direct and proximate result of the contributory infringementsby

dcfcndama of plaintiffs' copyrights and exclusive rights under copyright. plaintiffs are entitl«i to

damages nd defendants' rofits PW'SUIDto 17 U.S.C. § SO4(b) or eachseparatenfringemmt.

7'. Altmlatively, plaintiffB, and eachofthcm, are entitled to statvtory

damages, pursuant to 17 U.S.C. § SO4(c), n the amount ofS1S0,OOOwith respect to each work

infringed.or suchotheramounts smaybe properunder17U.S.C.§ S04(c).p~tfs are

infonned and believe. and OD hat b8sisavcr, that suchstatutOIY amap shall exceed

$100,000,000.

24



MAY Z4 Z001 6:48 PM FR PROSKAUER

Plaintiffs further are entitled to their attorneys' ees and full costspursuant6.

to 17U.S.C.§ 50S.

Defendants' onduct, as hereinaboveaverred, s causingand, unless7.

enjoined and restrainedby this Court, will continue o causeplaintiffs great and rreparable nj~

that cannot ully be compensated r mca8Urcdn money_Plaintiffs have no adequate emedy$£

law. Pursuant o 17 U.S.C. § 502. plaintiffs, and eachof them, are entitled to preliminary and

permanen'.njunctions prohibiting furthercontributorynfringementSf plaio.tiffs'copyrlghQ y

defendants, nd eachof them.

COUNT I

VlCARIOUSmlBmGEMENT OF COPYRIGHTS

[AaainIt All Defendants]

.~

78. Plaintiffs~rporate hnn by this reference achandeveryaverment

contained n paragraphs1 through 67, inclusive.

At all times relevantherein. defendants. nd each of them, bad he riPt9.

and ability to police the Aimster systemand to superviseand/or control the iDfrin&ing eo~ of

Airnsterusers y, without imitation,preventing r terminating user'saccesso the Aim.

system's omputer 1ervers nd/or by rcfusiDI to index and provide COJ1ne(.ti~~ infringiq

music files and to prevent copying and distribution of tho- music files. but have ailed to SO

police the Aimster systemand o excrciJC uch superviaionand/or CODtroI.As a <liIect aM

25



MAY 24 zeel 6149 PM FR PROSKAUERR

proximateesultof such ailureJ imster~ infringedplaintiffs' copyrightsn the Copyrighted

Recordinas, u set orth above.

80 At all times elevant erein.defendants.ndeachof ~ derived

substantial inancial benefit &om infrinscmentsof plaintiffs' copyrights by the users of the

Aimsterservice,n that, amODa ther hinp, virtually the entire value of the AimStG'system s

derived from infrinaemcnt of plaintiffs' sound ccordinga. The natureand number of infringing

~rdings acts as a draw to usersand servesas he major inducement or users o join the

Aimltcr system. Defendantsare urther undertakinga.purposeful strategy o generate uture

revenueand to make hemselvesmore attractive o potential investors.advertisers.business

partners, ndothcrsby increasinghenumber f users f theAimstersystem y attracting sers

by providing them with the ability unlawfully to copy and distribute an ever-increasing olume of

plaintiffs' recordings. The value of the Aimster systemgrows as he quantity and quality of

available music increases. --

81 The foregoin&KtI ofinfringcment by defendants,and eachof them, baVt;

beenwillful, intentional. and purposeful, n diS'Cprd of and ndifference o the rights of

plaintiffs

82. Defendants' onduct, as averredherein,constitutesvicarious nfringement

of plaintiffs' copyrights and exclusive riibts under copyrlalrt, n violation of Sections 106, 11S.

and501of the CopyrightAct, 17U.S.C. § 106, IS, andSOl

26



MAY 24 2001

As a direct and proximate result of defendants' icarious infringement of3.

plaintiffs' copyrights and exclusive rightSunder copyright, plaintiffs are entitled to damaaes m

defendants' profitS p\U'SUaDt o 17 U .S.C. § 504(b) for each separate infriDgcment.

84. Al=natively, plaintiffs, and eachof them, arc entitled to statutory

damagesn the amountofSl~O,OOO ith m-pecL o eachwork infringed, or for such other

amountsas may be proper under 17 U.S.C. § 'O4(c). Plaintiffs are nformed and believe, andon

that basis ver. that such statutorydamages hall exceed5100,000,000.

85. Plaindffs urtherareentitled o their attorneys'eesand ull costsp~t

to 17U.S.C.§ 505

86. Dt"fendants' onduct.as hereinabove verred. s causingand~ nless

enjoined and restraincdby this Court, wia~ntmue \to causeplaintiffs great and rreP&X:ableI;ljury

that cannot ully be compCl188tedr measuledn money.Plaintiffshaveno adcqua~ :medy at

law. Pursuant o 17 U.S.C. § 502, plaintitr., aM eachof them. ~ entitled to preliminary and

pennanent njunctions prohibiting further vicarious i%1fringementsf plaintiffs' copyrights by

defendants, nd eachof them.

?7



~o~m

UATUTORY ~ COMMON AW UNFAIRCOMPETmON

[Against All Defendants]

87. Plaintiffs incorporateherein by this referenceeachand every avennent

contained n paragraphs1 through 67 , nclusive.

88 The foregoing acts and conduct of defendants, nd eachof them, constitute

an appropriation and nvasion of the pivpert"f rights of plaintiffs in and o the Pre-1972

Recordinp. and constitutemisappropriationand unfair competition under statestatutory and

commonaw.

89. As a directandproximate esultof defendants'onduct, saven-eci,

plaintiffs are' urther entitled tD eCQva- ll proceedS'1Indtbercompcasation eceivedor to be

receivedby defendants,andeachof them,arising rom infrinsements by usersof the Aimster

System f the ~ 1972Recordini".Plaintiffs teq\lelt the Court to order eachdefendant o render

an accounting to 8SCertainhe amoUntof suchprofits and compensation.

90. As a directandproximate esultof defendants' misappropriationand

unfair competition, plaintift"s,andeachof them.havebeendamaged,nddefendants,nde8chof

them,havebeenunjustlyenriched,n an amount hatsha11eprovedat rial for ~ch dam~

and/or restitution and disgorgement s appropriate. Such damaaes nd/or restitution and

disgorgementncludea declaration y this CoUrt hateachdefendant. . constructive for

28



OnCountS throughll, for a preliminary nd a pennanent njunction.

~oining defendan~.ndeach ftbem,and heir respective gents, ts, employees,

officen, attomeys. successors, icensees and assians. and aU persons acting in concert or

participationwith eachor any of them, from: (i) directly or indirectly infringina in any manner

anyofplaintiff3' copyrights (whether now in existenceor bercafterc~ted), including, withoUt

limitation, the Copyrighted Recordings isted on ScheduleA; (ii) from causing,contributing to.

enabling, acilitatin&, or participating n the infringement of any of plaintiffs. respective

copyrightS.ncluding, without limitation, the CopyrightedRecordings isted on Schedule A;

(iii) directly or indirectly infringing in any mannerany of plain ift's. PR-1972 RecordingS,

includina without limitation those isted on ScheduleB; and (iv) from ~-!.using, ontributing to

enabling, acilitating, or participating n the reproductionor distribution of any ofp1ain1itfs' ~

1972Recordi~t including without limitation those i&tedon ScheduleB.

4. On Countm, or an~\mting, the mposition f consU11CtivcrUst, ~

d8n0,.ages ccordina r.o proof. -

s. On Count m. for pWlitive and exemplarydarz18ge8n such amount as -y

be awarded at trial

6. For prejudgment nterest according o law.

7 For pJaintiffs' ttorneys'ees, osts,anddisb~ts in this action.

8 For suchotherand tDthcr elief asdlCCourtmaydeemust and~.

PROSKAUER ROSE LLP

By: ~~ ~.( H// I'.

~ ~ 0' ~~~~~~-IS8S BroadwayNew York. New York 10036(212) 969-3000Telephone(212)969-2900 acsimile

30



MAY ~,4 Z001

-AND-

RUSSELL J. FRACKMAN (Pro Hac Vice Application Pcnding)GEORGE M. BORKOWSlQ (pro Hac Vice Application Pending)

ROY L. SHULTS (Pro Hac Vice Application Pending)

MITCHELL SILBERBERG &. KNUPP LLPTrident Center11377West Olympic BoulevardLos Angeles)Calitomia 90064-1683

MA!THEW OPPENHEIM (ProHacVice ApplicationPending)ANDREA SHARRIN (Pro Hac Vice Application Pending)RECORDING INDUSTRY ASSOCIA110N

OF AMF1UCA. ~C.

1330ConnecticutAvenueNW

Suite 300

Washington,D.C. 20036

,

31



"MY 24 2001

EXmBIT A



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eff: district zomba complaint

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