Baxerman & Drangel, P.C.

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

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A&M RECORDS, INC., a Delaware corporation; ARISTA RECORDS, INC., a Delaware corporation; CAPITOL RECORDS, INC., a Delaware corporation; GEFFEN RECORDS, INC., a California corporation; ISLAND RECORDS, INC., a New York corporation; MAVERICK RECORDING COMPANY, a California general partnership; MCA RECORDS, INC., a California corporation; SONY MUSIC ENTERTAINMENT INC., a Delaware corporation; and WARNER BROS. RECORDS INC., a Delaware corporation, Plaintiffs,

INTERNET SITE KNOWN AS FRESH KUTZ; and DOES I through X, Defendants.

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Case No.: 97-CV-1099H (JFS)

COMPLAINT

Plaintiffs, A & M Records, Inc., Arista Records, Inc., Capitol Records, Inc., Geffen Records, Inc., Island Records, Inc., Maverick Recording Company, MCA Records, Inc. Sony Music Entertainment Inc., and Warner Bros. Records, Inc. (collectively "Plaintiffs"), for their Complaint against Defendants Internet Site Known as Fresh Kutz, and Does I-X, inclusive (collectively "Defendants") allege as follows:

NATURE OF THE ACTION

1. This case involves the infringement of Plaintiffs' copyrighted sound recordings by Defendants via the Internet. Defendants have created and maintain an Internet since know as Fresh Kutz ("Defendants" Site"), the sole purpose of which is the reproduction, distribution, and exchange of unauthorized copies of copyrighted sound recordings. Without permission of the copyright holders, Defendants have copied hundreds of full-length sound recordings to a computer file server connected to the Internet. The vast majority of these sound recordings are owned by Plaintiffs or their affiliates. Defendants then make these infringing recordings available at Defendants' Site for reproduction and distribution to millions of Internet users worldwide. Indeed, Defendants boast that theirs is the "biggest and best" such site on the Internet, with new songs added every day. Moreover, as part of their infringement scheme, Defendants actively encourage Internet users to download the infringing materials -- and thus create additional copies in the users' computers. Defendants even provide software which users can download to their computers to enable them to play the infringing recordings in high-fidelity stereo. In addition, upon information and belief, Defendants encourage Internet users violating their site to contribute additional copies of unauthorized sound recordings to Defendants' Site for copying by and distribution to countless other Internet users.

2. A fledging industry in pirated copies of sound recordings thus is emerging on the Internet. In this way, commercially released recordings which otherwise are available for purchase through legitimate channels (e.g., records stores) are being pirated online. Because the Internet offers near instantaneous access worldwide, this conduct is causing and threatens to continue to cause severe and irreparable harm to the Plaintiffs, and to the recording industry generally. This action seeks an injunction against the Defendants' unauthorized copying and distribution, and seeks damages for the infringements which have occurred to date.

PARTIES

3. Defendant Internet Site Known as Fresh Kutz is a business of unknown structure which maintains a site on the Internet located at "www.avalon.simplenet.com/coolmp3/music.htm." Defendants' Site is maintained on a computer server owned by Simple Network Communications, Inc. ("SIMPLENET"), which resides within this District.

4. Upon information and belief, Defendant Internet Site Known as Fresh Kutz is owned, operated and maintained by Defendants Does I-X. The true names and capacities of Defendants Does I-X, inclusive, are unknown to Plaintiffs at this time. Plaintiffs therefore sue said Defendants by such fictitious names. As soon as the true names of Does I-X have been ascertained, Plaintiffs will amend this Complaint accordingly.

5. Plaintiff A & M Records, Inc. ("A & M") is a corporation organized and existing under the laws of Delaware with its principal place of business in California. A & M is in the business of producing, manufacturing and distributing copyrighted sound recordings. A & M is the owner of the United States Copyright in, or is the exclusive licensee in the United States for, certain of the sound recordings identified in the Schedule annexed hereto as Exhibit A (collectively "Plaintiffs' Recordings").

6. Plaintiff Arista Records, Inc. ("Arista") is a corporation organized and existing under the laws of Delaware with its principal place of business in New York. Arista is in the business of producing, manufacturing and distributing copyrighted sound recordings. Arista is the owner of the United States Copyright in, or is the exclusive licensee in the United States for certain of Plaintiffs' Recordings identified in Exhibit A.

7. Plaintiff Capitol Records, Inc. ("Capitol") is a corporation organized and existing under the laws of Delaware with a place of business in California. Capitol is in the business of producing, manufacturing and distributing copyrighted sound recordings. Capitol is the owner of the United States Copyright in, or is the exclusive licensee in the United States for, certain of Plaintiffs' Recordings identified in Exhibit A.

8. Plaintiff Geffen Records, Inc. ("Geffen") is a corporation organized and existing under the laws of California with its principal place of business in California. Geffen is in the business of producing, manufacturing and distributing copyrighted sound recordings. Geffen is the owner of the United States Copyright in, or is the exclusive licensee in the United States for, certain of Plaintiffs' Recording identified in Exhibit A.

9. Plaintiff Island Records, Inc. ("Island") is a corporation organized and existing under the laws of New York with its principal place of business in New York. Island is in the business of producing, manufacturing and distributing copyrighted sound recordings. Island is the owner of the United States Copyright in, or is the exclusive licensee in the United States for, certain of Plaintiffs' Recordings identified in Exhibit A.

10. Plaintiff Maverick Recording Company ("Maverick") is a general partnership organized and existing under the laws of California with its principal place of business in California. Maverick is in the business of producing, manufacturing and distributing copyrighted sound recordings. Maverick is the owner of the United States Copyright in, or is the exclusive licensee in the United States for certain of Plaintiffs' Recordings identified in Exhibit A.

11. Plaintiff MCA Records, Inc. ("MCA") is a corporation organized and existing under the laws of California with its principal place of business in California. MCA is in the business of producing, manufacturing and distributing copyrighted sound recordings. MCA is the owner of the United States Copyright in, or is the exclusive licensee in the United States for, certain of Plaintiffs' Recordings identified in Exhibit A.

12. Plaintiff Sony Music Entertainment Inc. ("Sony") is a corporation organized and existing under the laws of Delaware with its principal place of business in New York. Sony is in the business of producing, manufacturing and distributing copyrighted sound recordings. Sony is the owner of the United States Copyright in, or is the exclusive licensee in the United State for, certain of Plaintiffs' Recordings identified in Exhibit A.

13. Plaintiff Warner Bros. Records Inc. ("Warner Bros.") is a corporation organized and existing under the laws of Delaware with its principal place of business in California. Warner Bros. is in the business of producing, manufacturing and distributing copyrighted sound recordings. Warner Bros. is the owner of the United States Copyright in, or is the exclusive licensee in the United States for certain of Plaintiffs' Recordings identified in Exhibit A.

JURISDICTION AND VENUE

14. The true names and capacities of Defendants Does I-X, inclusive, are unknown to Plaintiffs a this time. Plaintiffs therefore sue said Defendants by such fictitious names. As soon as the true names of Does I-X have been ascertained, Plaintiffs will amend this Complaint accordingly. On information and belief, Does I-X own, operate and maintain Defendant Internet Site Known as Fresh Kutz.

15. This is an action for copyright infringement under 17 U.S.C. §101 et seq. Pursuant to 28 U.S.C. §§1331 and 1338, this Court has original and exclusive jurisdiction over all claims herein.

16. Venue is proper in this Court under 28 U.S.C. §§1391(b) and 1400(a). Defendants' Internet Site Known as Fresh Kutz and Does I-X maintain Defendants' Site on a computer server located in this District. Defendants therefore may be found in this District within the meaning of 28 U.S.C. §1400(a), and their infringement of Plaintiffs' copyright occurs in this District within the meaning of 28 U.S.C. §1391(b).

FACTS COMMON TO ALL COUNTS

I. The Internet Allows the Instantaneous Worldwide Reproduction and Transmission of Perfect Copies of Sound Recordings

17. The Internet is a worldwide network of millions of computers which has become a widely-used means of global communication. Through the Internet, text, graphics, audio, and video information and recordings are quickly and routinely transmitted to nearly anyone with access to a computer and a modem. Internet usage has become commonplace in businesses, schools and in millions of homes worldwide.

18. Information transferred over the Internet is sent in "digitized" form. This means that near perfect copies of virtually any type of information -- including sound recordings -- can be reproduced and transmitted across the Internet. Once "uploaded" to the Internet (i.e., reproduced on a file server connected to the Internet), sound recordings approximating the same quality as compact discs purchased in music stores can be "downloaded" by Internet users (i.e., reproduced onto and distributed to the user's computer) for playback in high-fidelity stereophonic sound. Internet-delivered sound recordings can be played through speakers commonly connected to computers.

19. Recent technological developments have increased the speed with which data can be transmitted across the Internet and have allowed greater amounts of data to be transferred. These advances have made the Internet a viable distribution channel for sound recordings.

II. Piracy of Copyrighted Sound Recordings On The Internet

20. While Internet is a revolutionary tool for the legitimate gathering and dissemination of information, it also can be misused for unlawful purposes. Piracy of intellectual property such as sound recordings is becoming a pervasive problem on the Internet. The basic nature of the copyright infringement (i.e., copying and distributing) is familiar. However, given the speed and ease of reproducing and widely distributing information on the Internet, the potential harm to copyright owners threatens to be exponentially greater than traditional acts of piracy.

21. The extensive misuse of the Internet for unlawful purposes is in part due to the nature of the medium. The aspects of the Internet that make it a revolutionary tool for legitimate communication -- the case, for example, with which information can be copied to and from Internet sites, the simplicity of downloading even large files, and the relatively minor cost to a user of establishing a site that can communicate with an audience of millions -- also create unparalleled opportunities for theft. The relative anonymity with which Internet communications may be conducted further facilities illegal conduct.

22. Unscrupulous Internet users covertly can digitize and copy to the Internet copyrighted sound recordings (in which they have no rights and which they have no authorization to use) as easily as they can upload legitimate material. From there, perfect or near-perfect reproductions of copyrighted works can be and are copied, distributed, used and played remotely by other users online.

23. Financial losses from traditional piracy cost the worldwide recording industry approximately $2 billion a year. In the United States alone, annual losses are estimated to be $300 million. With the explosive growth of the Internet, these figures may be dwarfed by online piracy unless such piracy is deterred by the courts, applying well-established principles of copyright law to infringing online conduct.

III. Defendants' Unlawful Online Copying and Distribution of Plaintiffs' Recordings

24. The sole and exclusive purpose of Defendants' Site is the unlawful copying, distributing and exchange of unauthorized copyrighted sound recordings, including Plaintiffs' Recordings.

25. Defendants' Site may be accessed by Internet users worldwide and can be located using standard and widely available browser software.

26. Defendants' Site presents a visiting Internet user with an "archive" listings hundreds of song titles and the artists who recorded them. Through express, on-screen invitations, Defendants openly urge visitors to download songs from Defendants' existing inventory. Screen prints of Defendants' Site are attached hereto as Exhibit B. In fact, Defendants provide access to "player" software at their site which, like the song files, users can download to their own computer systems. This software allows users to play the infringing recordings they have downloaded from the site in stereo through speakers attached to their computers. Thus, Defendants are actively promoting copyright infringement by providing users with the tools to further reproduce and distribute infringing copies of Plaintiffs' Recordings.

27. The song titles presented on Defendants' Site are actually links to computer files maintained on the file server housing the Site. There files contain unauthorized full-length copies of copyrighted sound recordings which were uploaded by Defendants themselves or by third parties at Defendants' urging. When a user clicks on a particular song title with their mouse, a full-length reproduction of the corresponding copyrighted sound recording is copied and distributed to the user's own computer.

28. For example, by clicking on the link entitled "Alanis Morissette-Hand in My Pocket" at Defendants' Site, the copying process is started and a computer filed containing a digital reproduction of the popular song "Hand in my Pocket" by Alanis Morissette is copied from Defendants' Site onto the user's computer. This "download" to the user's computer creates and disseminates an additional copy of the recording to the user's computer memory, while leaving a copy on Defendants Site for countless other users to copy.

29. In addition to offering infringing copies of copyrighted sound recordings and the software needed to play them to visiting users, Defendants also, upon information and belief, encourage users to contribute additional full-length sound recordings to their archive of pirated works. Upon information and belief, users visiting Defendants' Site can and do "upload" digitized reproductions of further recordings to Defendants' Site. Defendants then, upon information and belief, take and organize the uploaded files by artist and title, thus making additional reproductions of uploaded sound recordings. Defendants are thus working to enlarge their site, magnify their infringement of Plaintiffs' copyrights, and compound the harm to Plaintiffs from their actions.

30. The vast majority of sound recordings offered on Defendants' Site are copyrighted works owned by Plaintiffs or their subsidiaries or affiliates. These infringing recordings were reproduced from legitimate recordings produced, manufactured, and/or distributed by Plaintiffs. Consequently, the sound recordings copied and distributed by and through Defendants' Site are direct copies of Plaintiffs' Recordings.

COUNT ONE

Copyright Infringement Under 17 U.S.C. §§101 et seq.

31. Paragraphs 1-30 above are realigned as if fully set forth herein.

32. Plaintiffs are the owners of, or the exclusive licensees in the United States for, Plaintiffs' Recordings and have the exclusive right to manufacture and distribute them in the United States. Plaintiffs' Recordings are original works, copyrightable under the Copyright Act.

33. At all times relevant herein, Plaintiffs have complied with the Copyright Act, 17 U.S.C. §§101, et seq. and have secured the exclusive rights and privileges in and to the copyrights in Plaintiffs' Recordings. Exhibit A annexed hereto sets forth a number of Plaintiffs' Recordings which have been unlawfully copied on Defendants' Site. Each recording has been duly registered with the United States Copyright Office, as evidenced by the Registration Certificates issued by the Register of Copyrights, copies of which are annexed hereto as Exhibit C.

34. Plaintiffs' Recordings have been reproduced and distributed by individual Plaintiffs or under their authority. In creating, manufacturing, and distributing legitimate copies of Plaintiffs' Recordings, Plaintiffs have acted in strict conformity with the Copyright Act and all other applicable laws governing copyrights.

35. Plaintiffs have not licensed any of the Defendants to reproduce or distribute any of Plaintiffs' Recordings in any manner whatsoever.

36. Defendants' acts detailed above constitute direct and/or contributory infringements of Plaintiffs' respective copyrights in Plaintiffs' Recordings in violation of 17 U.S.C. §§101, et seq.

37. By creating, administering operating, and maintaining Defendants' Site, Defendants have actively engaged in, aided, encouraged materially contributed to, and abetted the unauthorized copying and distribution of Plaintiffs' Recordings. Upon information and belief, Defendants' infringements have been committed willfully, and have been and are being engaged in with total disregard for Plaintiffs' intellectual property rights.

38. Defendants' direct and/or contributory copyright infringement has caused, and will continue to cause, Plaintiffs to suffer substantial injuries, loss and damage to their exclusive rights to, and copyrights in, Plaintiffs' Recordings. The precise amount of Plaintiffs' damages will be determined at trial.

39. Defendants' direct and/or contributory copyright infringement, and the threat of continuing infringement, has caused, and will continue to cause, Plaintiffs severe and irreparable injury. Plaintiffs' remedy at law is inadequate to compensate them for the injuries already inflicted and further threatened by Defendants. Therefore, Defendants should be restrained and enjoined pursuant to 17 U.S.C. §§101, et seq.

PRAYER FOR RELIEF

WHEREFORE, Plaintiffs respectfully request the following relief:

1. That the Court issue a temporary restraining order:

(a) restraining Defendants and their respective agents, servants, employees, successors and assigns, and all other persons acting in concert with, in conspiracy with or affiliated with them from copying, reproducing, duplicating, disseminating, distributing, selling or in any way exploiting any unauthorized copies of Plaintiffs' Recordings or any copyrighted sound recording:

(b) restraining Defendants and their respective agents, servants, employees, successors and assigns, and all other persons acting in concert with, in conspiracy with or affiliated with them from otherwise infringing any sound recording copyright by permitting, supervising, enabling, encouraging, contributing to, aiding or abetting any of the acts in subparagraph (a) above; and

(c) restraining Defendants and their respective agents, servants, employees, successors and assigns, and all other persons acting in concert with, in conspiracy with or affiliated with them from destroying, discarding, transferring, or modifying any documents, software, hardware, equipment or data used in connection with Defendants' Site, including but not limited to. (i) business records that pertain to the copying, reproduction, duplication, dissemination or distribution of any sound recordings, or any revenues or remuneration (monetary or otherwise) derived therefrom, (ii) computer files contained on Defendants' Site, (iii) Defendants' site itself, or (iv) documents or other materials relating to Plaintiffs' Recordings; and

(d) directing Defendants' Internet Service Provider SIMPLENET, located at 8070 La Jolla Shores Drive, La Jolla, California, 92037, to block access to Defendants' Site by Defendants or third parties thus preventing further infringements and preserving evidence during the pendency of this litigation.

2. That the Court issue a preliminary injunction in accordance with the temporary restraining order requested above;

3. That the Court issue a permanent injunction making permanent the temporary restraining order and preliminary injunction requested above save that Defendants be ordered to erase, obliterate and otherwise destroy any and all unauthorized copies of any of Plaintiffs' Recordings and any unauthorized copyrighted sound recordings which are in their possession or under their control;

4. That Plaintiffs be awarded statutory or actual damages for Defendants' copyright infringement in an amount to be determined at trial;

5. That the Court issue an order requiring each Defendant to file with this Court and serve on Plaintiffs within ten (10) days after service of the injunction, a report, in writing, under oath, setting forth in detail the manner and form in which Defendants have complied with the injunction;

6. That the Court award Plaintiffs their attorneys' fees pursuant to 17 U.S.C. §505;

7. That the Court award Plaintiffs their costs of suit incurred herein; and

8. That the Court grant such other and further relief as it deems just and proper.

DATED: June 9, 1997

PROSKAUER ROSE LLP

SCOTT P. COOPER

CHRISTOPHER WOLF

ALEC W. FARR

By: /s/ Scott P. Cooper

Attorneys for Plaintiffs

Of Counsel:

Steven B. Fabrizio

Recording Industry Association of America

1330 Connecticut Avenue, N.W.

Suite 300

Washington, D.C. 20036

(202) 775-0101

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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

Case No.: 97-CV-1099H (JFS)

TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE RE: PRELIMINARY INJUNCTION

Upon consideration of Plaintiffs' Motion for a Temporary Restraining Order and Preliminary Injunction, and entire record herein, it is this 10th day of June 1997,

ORDERED, that for a period of ten (10) days from the issuance of this Order, good cause having been shown pursuant to Rule 65 of the Federal Rules of Civil Procedure that immediate and irreparable injury and damage will result to plaintiffs before the motion for a preliminary injunction can be heard and decided, Defendants, their agents, servants and employees, and all persons acting in concert with them or assisting them through the provision of services for or in the maintenance of the Internet site known as "http://www.avalon.simplenet.com/coolmp3/music.htm" and/or "http://www.avalon.simplenet.com//bossnetsux/music.htm" (hereinafter "Defendants' Site"):

1. are temporarily enjoined from:

(a) copying, reproducing, duplicating, disseminating, distributing, selling or in any way exploiting any unauthorized copies of Plaintiffs' Recordings or any copyrighted sound recording;

(b) otherwise infringing any sound recording copyright by permitting, supervising, enabling, encouraging, contributing to, aiding or abetting any of the acts in subparagraph (a) above; and

(c) destroying, discarding, transferring, or modifying any documents, software, hardware, equipment, or data used in connection with defendants' Site, including but not limited to, (I) business records that pertain to the copying, reproduction, duplication, dissemination, or distribution of any sound recordings, or any revenues or remuneration (monetary or otherwise) derived therefrom, (ii) computer files contained on Defendants' Site, (iii) Defendants' site itself, or (iv) documents or other materials relating to Plaintiffs' Recordings; and

2. shall immediately block access to all unauthorized sound recordings which are copies of or otherwise substantially similar to any of the Subject Recordings at Defendants' Site and at every other computer site over which Defendants have control; and it is further

ORDERED, that on June 20, 1997 at 1:15 p.m. Defendants Internet Site Known As Fresh Kutz, Does I-X, inclusive (collectively "Defendants") show cause before this Court in Courtroom 8, of the United States Courthouse located at 940 Front Street, San Diego, California 92101, why a Preliminary Injunction should not be entered pursuant to Rule 65 of the Federal Rules of Civil Procedure;

1. continuing the terms of the temporary restraining order entered herein; and

2. requiring Defendants to file with this Court and serve on Plaintiffs, within ten (10) days after receiving service of this Order, a report in writing, under oath, setting forth in detail the manner and form in which Defendants have complied with the injunction; and it is further

ORDERED, that by the close of business on June 10, 1997, Plaintiffs shall be required to post a bond of $10,000 as security for the payment of such cost and damages incurred or suffered by any party who is found to be wrongfully enjoined or restrained hereby; and it is further

ORDERED, that Defendants submit any papers in response to this order to show cause on or before the fifth (5th) day after service upon them of this order to show cause, and that Defendants make simultaneous service of such responsive papers upon counsel for Plaintiffs by personal service or by Federal Express or similarly next day delivery; and it is further

ORDERED, that copies of this Order to Show Cause, together with copies of all of the papers on which it was granted, be served upon the named Defendants in accordance with the Federal Rules of Court.

IT IS SO ORDERED.

DATED: June 10, 1997

/s/ MARILYN L. HUFF

MARILYN L. HUFF, JUDGE

UNITED STATES DISTRICT COURT

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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

Case No.: 97-CV-1099H (JFS)

ORDER FOR EXPEDITED DISCOVERY

The Court, having considered ex parte Plaintiffs' Motion for Expedited Discovery and Preservation of Evidence, and the proposed discovery submitted therewith, is of the opinion and finds that plaintiffs' Motion is meritorious and should be granted. It is therefore,

ORDERED ADJUDGED and DECREED that Plaintiff may serve immediately discovery upon Internet Service Provider SIMPLENET and upon Defendants Fresh Kutz and Does I-X; and

ORDERED that SIMPLENET shall provide a response to the first of Plaintiffs' expedited discovery requests within 72 hours of service of said discovery, or seek a protective order from the court; and

ORDERED that SIMPLENET shall provide a response to Plaintiffs' remaining expedited discovery request within 5 days of service of said discovery, or seek a protective order from the court, and it is further

ORDERED that Defendants shall provide a response to Plaintiffs' expedited discovery requests within 5 day of service of said discovery or seek a protective order from the Court.

IT IS SO ORDERED

Dated June 10, 1997

/s/ MARILYN L. HUFF

MARILYN L. HUFF, JUDGE

UNITED STATES DISTRICT COURT

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