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No Rehearing For Napster

UPDATE: Lawyers for the Internet song-swapping site say they saw this one coming but will continue to review any legal options.

June 25, 2001
By Michael Singer: More stories by this author:

Napster will not get another chance to lift an injunction that prohibits the Redwood City-based company from allowing its users to share copyrighted music files.

An attorney for the Recording Industry Association of America (RIAA) confirmed the news saying that the judge denied Napster's request Monday for a rehearing of the music industry's landmark copyright lawsuit.

On March 5, U.S. District Court Judge Marilyn Hall Patel told the Internet song-swapping site that it must stop allowing copyrighted material from passing between its subscribers. Napster lawyers quickly filed an appeal of the ruling.

Officials at Napster, who are understandably less than excited about the ruling, are still reviewing their legal options.

"While we are disappointed, we recognized going in that rehearing petitions are infrequently granted," says Napster General Counsel Jonathan Schwartz. "We will continue to comply with the outstanding injunction. With the launch of the new membership service later this summer, we believe we will put to rest many of the outstanding legal issues."

Some analysts see the failure for Napster to maintain a legal battle against the record companies as quite a shift from a year ago.

"It's a huge shift and I think at this point there is just the principal of the thing that they have left to fight for," says Redwood City-based Zona Research analyst Susan Billheimer.

Meantime Napster is still trying its best to filter out the copyrighted MP3 files, but has managed to sign an affiliation deal with the recording industry's new music download platform - Seattle-based MusicNet.

However, if the deal falls flat - the suit may be rekindled.

"If the possibility exists to continue to fight the RIAA is there, they'll have to go to the Supreme Court. If that were to happen, they can turn down the pay model if they want to. That would certainly be a blow to the Digital Millennium Copyright Act," says Billheimer.






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