No progress was made in 9th Circuit Court of Appeals in San Francisco Monday
in Napster Inc.’s legal battle with the U.S. recording industry.
The three-judge panel of the made no immediate decision on a request by the
Recording Industry Association of America (RIAA) for a ban on Napster, all
of which means the popular peer-to-peer music sharing service can stay in
business for at least the next few weeks.
However, insiders say judges will ponder the issue and rule on whether or
not to halt Napster at a later date: There is no deadline on a decision. A
boon to more than 30 million music lovers of all ages and demographics,
Napster was found guilty of music copyright infringement by U.S. District
Court Judge Marilyn Hall Patel in July. However, the 9th Circuit stayed that
decision almost immediately Patel ruled, saying it needed more time to
consider.
Still, many industry insiders view Napster’s situation as precarious — the
firm itself said an injunction, albeit, a temporary one, could spell doom
for the company’s business. Others feel the battle will set a necessary
copyright precedent for peer-to-peer Internet businesses in the future.
In the suit, Napster faces such giants as Seagram Co. Ltd.’s Universal
Music, Bertelsmann AG’s BMG, Sony Corp.’s Sony Music, Time Warner Inc.’s
Warner Music Group and EMI Group Plc.
Hilary Rosen, president and CEO of the Recording Industry Association of
America (RIAA), issued a statement upon the conclusion of Monday’s
proceedings.
“Nobody expected a ruling from the bench today but we were pleased with the
court’s understanding of the issues,” Rosen said. “This case has never been
about technology. Rather, it is about Napster’s abuse of peer-to-peer
technology for its own commercial benefit. It is our hope that the Court
sends the message that this activity will not be tolerated, so that
legitimate businesses who pay creators can enter the Internet market and
compete fairly.”
Napster CEO Hank Barry reiterated his disappointment that the recording
industry wants to settle in court after Monday’s proceedings.
“Over a period of many months, Napster has made serious proposals to each of
the major record companies and their publishing affiliates that involve
payments of substantial percentages of expected company revenues to
compensate artists and rightsholders — proposals whose most conservative
estimates would result in payments of over $500 million to the industry in
just the first year alone,” Barry said. “Every one of these proposals has
been rejected, and the record companies have made no counterproposals.
Barry said his company had tried to extend a gesture of good faith to the
record companies, suggesting a compromise under which it would charge users
a monthly $4.95 membership fee, something other file-sharing firms have
tried, and a business model Napster perhaps could have perhaps employed
before getting into hot water with the industry it claims has put a
“chokehold” on music distribution.
Napster’s style has been to portray its case as a kind of
David-versus-Goliath scheme whereby the smaller company is persecuted by a
giant, greedy one. The recording industry has made no bones about calling
Napster a thief engaging in mass music piracy.
Ironically, the more the industry portrays Napster as the bad guy, the more
music fans are rushing online to download as many MP3 files as they can get
their mitts on.
