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Today, many courts are adjudicating copyright-infringement claims against consumers who used file-sharing programs like KaZaA to "share" copyrighted music and movies with thousands of strangers. These courts have been struggling with the question of whether the unauthorized "sharing" of a work infringes the rights of its copyright owner--in others words, whether U.S. law provides copyright owners with a so-called "making-available" right.

Recently, the Court hearing Capitol Records, Inc. v. Thomas posed a question about when appellate decisions are binding precedents for lower courts. The answer to this question appears to show that--at least in the federal district and circuit courts--the making-available debate ended seven years ago.

In Thomas, the Court instructed the jury that "making copyrighted sound recordings available for electronic distribution ... violates the copyright owners' exclusive right of distribution, regardless of whether actual distribution has been shown...." See Order of May 20, 2008, Capitol Records, Inc. v. Thomas, Civil File No. 06-1497 (MJD/RLE). The Court has also asked whether it must hold this instruction erroneous because of the Eighth Circuit's decision in National Car Rental Sys., Inc. v. Computer Associates Int'l, Inc., 991 F.2d 426 (8th Cir. 1993). See Order of May 15, 2008, Capitol Records, Inc. v. Thomas, Civil File No. 06-1497 (MJD/RLE).

Before filing a proposed amicus brief in Thomas, l analyzed whether the Thomas Court was bound by National Car Rental to reject its own jury instruction and grant a new trial. My analysis indicated that the Court was not bound by National Car Rental.

But further research now suggests that I underestimated the implications of this analysis. As applied to the case cited by Thomas, this analysis shows only that National Car Rental is not a binding precedent. But when applied generally, it seems to show that a different judicial decision is a binding precedent--and one that would require all federal district and circuit courts to hold that the Copyright Act grants copyright owners a making-available right. Consequently, courts may be struggling needlessly with questions about whether the Copyright Act grants a making-available right. This paper seeks to explain why.

Analysis Indicates that National Car Rental Is Not Binding Precedent in Thomas: National Car Rental involved a claim that the Copyright Act preempted any state-law claim asserting that National had breeched a software-licensing agreement that prohibited use of the licensed software to process data for third parties. 991 F.2d at 427-28, 431. National argued that because this prohibition barred it from "distributing" the "functionality" of the licensed software to others, it was "equivalent" to the distribution right. Id. at 434. The Eight Circuit rejected this argument for three reasons:

First, National cites no authority in support of this proposition. Second, even with respect to computer software, the distribution right is only the right to distribute copies of the work. As Professor Nimmer has stated, "infringement of [the distribution right] requires an actual dissemination of either copies or phonorecords." 2 Nimmer on Copyright § 8.11[A] at 8-124.1. Finally, courts have specifically held that copyright protection does not extend to the software's function. Thus, even if CA could be said to have alleged that National "distributed the functionality" of its program, such a claim would not protect a right equivalent to one of the exclusive rights in copyright.

Id. (emphasis in original) (citations omitted).

The language that might bind the court in Thomas is the Nimmer quotation in the third sentence: If an infringement of the distribution right requires "actual dissemination," then unauthorized sharing or posting of a file on the Internet or a file-sharing network could not--in itself--infringe the distribution right. Were that the law, then the jury instruction in Thomas might be erroneous. The critical question is thus whether the Nimmer quote acts a precedent that binds lower courts. It might lack precedential value for either of two reasons.

First, the Nimmer quote relates to an alternative holding--indeed, it relates to one of three alternative holdings. Consequently, National Car Rental would have had the same outcome even if its second holding did not exist. I had suspected that these alternative holdings undermined the precedential value of National Car Rental.

Research proved otherwise: Most courts treat alternative holdings as binding precedents. For example, in Richmond Screw Anchor Co. v. United States, 275 U.S. 331 (1928) the validity of plaintiff's patent infringement claim turned on the meaning of a procedural statute that prescribed rules for bringing civil claims against the government. The Court had previously interpreted this procedural statute in an earlier patent-infringement case, Brothers v. United States, 250 U.S. 88, 89 (1919). In Richmond, the plaintiff argued that Brothers' interpretation of the procedural statute was not precedent because it was part of a brief alternative holding in a decision that had focused mostly on patent infringement. The Court disagreed:

It does not make a reason given for a conclusion in a case obiter dictum that it is only one of two reasons for the same conclusion. It is true that in this case the other reason was more dwelt upon and perhaps it was more fully argued and considered..., but we can not hold that the [interpretation of the procedural statute] in the opinion is not to be regarded as authority except by directly reversing the decision in that case on that point, which we do not wish to do.

Richmond Screw Anchor Co. v. United States, 275 U.S. 331, 341 (1928).

Nevertheless, in National Car Rental, the Nimmer quote does lack precedential value for a different reason: The phrase, "actual dissemination," is obiter dicta: "A judicial comment made while delivering a judicial opinion, but one that is unnecessary to the decision in the case and therefore not precedential." Black's Law Dictionary 1102 (8th ed. 2004).

The Eight Circuit's second holding in National Car Rental quoted Nimmer only to show that the distribution right relates to the distribution of "copies"--not "functionality." 991 F.2d at 430, 434 (emphasis in original). The quoted phrase "actual dissemination" was thus obiter dicta irrelevant to all of the circuit court's holdings: None turned on whether National had actually disseminated the "functionality" of the software.

Consequently, the Eighth Circuit itself has repeatedly ignored National Car Rental when resolving questions about whether KaZaA users "distribute" files by making them available to other KaZaA users. See United States v. Sewell, 513 F.3d 820, 822 (2008) ("the use of KaZaA to share child pornography is sufficient to uphold a conviction for the knowing distribution of child pornography") (citing United States v. Shaffer, 472 F.3d 1219 (10th Cir. 2007).[1] These child-pornography cases are highly relevant to copyright-infringement cases because Congress used the undefined statutory term "distribute" to define both an exclusive right in the Copyright Act and a prohibition in the Criminal Code. Compare 17 U.S.C. § 106(3) (prohibiting unauthorized distribution of copyrighted files), with 18 U.S.C. 2252A (prohibiting distribution of files containing child pornography), and Burgess v. United States, 128 S. Ct. 1572, 1580 (2008) (holding that a "rule of lenity" requires ambiguous terms in criminal statutes to be construed in favor of the defendant).[2]

The Same Analysis Indicates that Tasini Is Binding Precedent in Thomas: The analysis that shows why National Car Rental is not binding precedent in Thomas also seems to prove something far more important: If the 1991 dicta in National Car Rental ever had precedential value, then it was overruled in 2001 by the United States Supreme Court in New York Times Co. v. Tasini, 533 U.S. 483 (2001).

In Tasini, six plaintiffs alleged that certain "Print Publishers" and "Electronic Publishers" infringed their copyrights by uploading twenty-one magazine articles into widely used online databases that let subscribers download or print those articles. Id. at 491 (plaintiffs asserted that their copyrights were infringed when their articles were "placed in" these databases). The Tasini plaintiffs had not shown that users of these databases had actually copied or accessed any of these twenty-one articles, and they had waived secondary-liability claims. See Brief for Petitioners at 86 n.34, New York Times, Inc. v. Tasini, 533 U.S. 483 (2201) (No. 00-201), 2001 U.S. S. Ct. Briefs LEXIS 252 ("far from showing that the copies in dispute were regularly used to access their individual Articles as such, at no point in this litigation did respondents ever demonstrate that, apart from their own searches, anyone had ever used the ... copies in dispute to do so"); see also id. at 29, 40, 84-85 & n.33.

Nevertheless, the Supreme Court held that the Print Publishers had infringed plaintiffs' copyrights because "the Print Publishers, through contracts licensing the production of copies in the Databases, 'authorize' reproduction and distribution of the [plaintiffs'] Articles." 533 U.S.at 498 (emphasis added); see id. at 505 (" We further conclude that the Print Publishers infringed the Authors' copyrights by authorizing the Electronic Publishers to place the Articles in the Databases.... "); see also Brief of Respondents at 62, New York Times, Inc. v. Tasini, 533 U.S. 483 (2201) (No. 00-201), 2001 U.S. S. Ct. Briefs LEXIS 386 (arguing that the Print Publishers' "acts of authorization--wholly apart from the Petitioners' other acts--are separate and distinct acts of infringement").

Tasini also held that the "Electronic Publishers infringed the [plaintiffs'] copyrights by reproducing and distributing the Articles in a manner not authorized by the [plaintiffs]...." 533 U.S. at 505 (emphasis added); see also id. at 498 ("LEXIS/NEXIS, by selling copies of the Articles through the NEXIS Database, 'distribute copies' of the Articles 'to the public by sale....'").

For two reasons, Tasini has a much stronger claim to precedential force in a file-sharing case than National Car Rental. First, the language quoted from Tasini-- while it was part of an alternative holding--was not dicta: It was essential to the alternative holding that the Print and Electronic Publishers infringed plaintiffs' distribution rights. See, e.g., Richmond Screw Anchor Co. v. United States, 275 U.S. 331, 341 (1928).

Second, unlike the facts in National Car Rental, the facts in Tasini are closely analogous to those in the file-sharing cases. Tasini held that the Print Publishers directly infringed the plaintiffs' rights to "authorize" distribution of their articles by agreeing to let third parties perform acts that made those articles available to users of publicly accessible online databases. 533 U.S. at 498. The acts of allegedly infringing users of file-sharing programs are even more direct: KaZaA users who download unauthorized copies of songs into their "shared folders" personally take the actions that make those copies available to other users of publicly accessible online databases. See id. at 498, 505 (holding that the Electronic Publishers infringed plaintiffs' distribution rights absent any showing that third-party users of their databases had actually accessed or downloaded the articles at issue).

In Thomas, the Tasini holding should foreclose attempts to turn the dicta in National Car Rental into precedent: Any interpretive magic that could bestow precedential value upon the dicta in National Car Rental would also show that this 1991 circuit-court case about preemption was overruled by Tasini, a stronger 2001 Supreme-Court precedent about online infringement of the distribution right. The Court in Thomas was thus correct to enquire about whether judicial precedent dictated its resolution of the Defendant's motion for a new trial: Judicial precedent does dictate its resolution. But the controlling precedent is not National Car Rental. It is Tasini.

Conclusion: The amicus brief that I filed in Thomas presumed that National Car Rental lacked precedential value. Indeed, because that brief argued for Chevron-like deference to the interpretation of the Copyright Act that several Congresses and Presidents adopted when enacting eight statutes, questions about the precedential value of National Car Rental were nearly irrelevant. See National Cable & Telecomm. Ass'n v. Brand X Internet Servs., 545 U.S. 967, 982 (2005) (holding that unless a pre-existing and otherwise precedential judicial interpretation holds statutory language unambiguous, courts must defer to subsequent interpretations adopted by the political branches).

Nevertheless, the Court in Thomas raised questions about the nature of judicial precedent that even courts outside the Eight Circuit may find dispositive: They seem to show that New York Times, Inc. v. Tasini requires federal district and circuit courts to hold that the Copyright Act of 1976 does provide copyright owners with a making-available right.

1. See also United States v. Griffen, 482 F.3d 1008, 1012 (8th Cir. 2007) ("defendant distributed child pornography when he downloaded child pornography from KaZaA and stored the files in a shared folder on his computer"); id. at 1011 (affirming the finding that defendant "distributed child pornography by making images of child pornography available to others"); cf. United State v. Clawson, 408 F.3d 556, 558 (8th Cir. 2005) (finding that "the ordinary meaning of the term 'distribute'" means that one distributes child pornography to a minor by informing the minor of its existence and location). Other courts have reached similar conclusions. See United States v. Carani, 492 F.3d 867, 876 (7th Cir. 2007) ("The notion that [defendant] could knowingly make his child pornography available for others to access and download without this qualifying as 'distribution' does not square with the plain meaning of the word."); United States v. Christy, 65 M.J 657 (Army Ct. Crim. App. 2007) ("We hold that 'sharing' child pornography files using peer-to-peer file-sharing software constitutes 'distribution of child pornography...."); United State v. Shaffer, 472 F.3d 1219, 1220, 1223 (10th Cir. 2007) ("[Defendant] ... freely allowed [other KaZaA users] access to his computerized stash of images and videos and openly invited them to take, or download, those items."); United States v. Darway, No. 06-4077, 2007 Fed. App. 0789N (6th Cir. 2007) (finding no "legal distinction between merely making material available to others and affirmatively distributing such material"); United States v. Postel, 524 F. Supp.2d 1120, 1125 (N.D. Iowa 2006) ("Defendant also intended to ... distribute child pornography to others by offering his collection ... to the public....").
2. For example, in Thomas, some amici argued that the "plain meaning" of the term "distribute" could not be implicated by the mere "sharing" of a file. See Brief of Amici Curiae EFF, et al., at 5-8, Capitol Records, Inc. v. Thomas, Civil File No. 06-1497 (MJD/RLE) (June 20, 2008). In the Eighth Circuit, that argument fails. See, e.g., United State v. Clawson, 408 F.3d 556, 558 (8th Cir. 2005) (finding that "the ordinary meaning of the term 'distribute'" means that one distributes child pornography to a minor by making its existence and location known to the minor).