Court Nixes Napster

A federal judge on Wednesday issued an order temporarily shutting down Napster Inc., siding with recording industry arguments that the song-swapping service was a haven for piracy and copyright infringement.

U.S. District Judge Marilyn Hall Patel said the evidence indicated that Napster’s estimated 20 million users turned to the company to download copyrighted music.

“When the infringing is of such a wholesale magnitude, the plaintiffs are entitled to enforce their copyrights,” Patel deciding to grant the preliminary injunction requested by the Recording Industry Association of America (RIAA).

Patel’s order, which came after a two-hour hearing, instructed Napster to cease its music downloading operations by midnight Pacific time Friday.

“We are pleased with the Court’s decision. This decision will pave the way for the future of on-line music”, said Cary Sherman, RIAA senior executive vice president and general counsel. “This once again establishes that the rules of the road are the same on-line as they are off-line and sends a strong message to others that they cannot build a business based on others’ copyrighted works without permission.

“This is an important win for artists, too, because whether they distribute their music through big labels, small independent labels, or on their own, the Court has made clear that they have the right to protect their works. Whether they choose to do so is up to them. But the choice is theirs to make.

“Now that Napster’s management understands that they need the authorization of copyright owners to engage in their business, we hope that they will work with the record companies to devise innovative ways to use their technology for legitimate purposes with permission.”

RIAA, which represents companies such Seagram Co. Ltd.’s Universal Music, Bertelsmann AG’s BMG, Sony Corp.’s Sony Music and Time Warner’s Warner Music Group and EMI, contends that no court has ever held that wholesale copying and distribution of copyrighted works could be considered “fair use.”

Napster’s Chief Executive Officer, Hank Barry, demurred, in a videotaped announcement on the Napster site:

“Today in Federal court the judge issued an order tha basically would have the effect of shutting down the Napster services that currently exist. We will be appealing the judge’s ruling to the court of appeals, and will ask the court of appeals tomorrow morning to stay the judge’s order during the appeal process. If we do not get a stay, then we will have until midnight Friday to comply with the judge’s order.

“Although we strongly and firmly disagree with the judge’s decision, we respect and understand the basis for it and we intend to comply. The judge’s ruling, essentially, is this, that one-to-one non-commercial file-sharing violates the law. We’ll fight this, in a variety of ways, to keep the Napster community growing and strong.”

Weighing in with cautious commentary on the ruling was Dan Rodrigues, president of Scour, which offers services similar to Napster and is also being sued

“We’ve followed the Napster case very closely,” said Rodrigues. “We’re interested in its outcome, and will continue to absorb every detail of this hearing as it might relate to the MPAA/RIAA suit against Scour. Like everyone, we’ve just heard this decision and need to reflect on Judge Patel’s ruling before commenting further. As we all agree, this is a very serious issue that requires further analysis. Any comments about the impact of this ruling on Scour right now would be premature and hasty. Scour will continue to maintain an open dialogue with the public on this issue.”

Simultaneously, a number of companies that offer licensing services immediately jumped on the dump-Napster bandwagon, such as EverAd.

“EverAd is in support of licensed music on the Internet,” said company spokesman Doug M

illes. “Our music division, PlayJ supports one of the key models by encrypting banner advertising into music files. This model, along with subscription and direct sales protect the copyrights and compensates the labels and artists. PlayJ provides free downloadable music, which is a part of Internet culture.”

Artists Against Piracy, an artist-driven coalition formed to give recording artists a voice in determining how their music is distributed on the Internet, agreed.

“We believe that a company should not be able to co-opt other peoples’
copyrights,” said Artists Against Piracy director Noah Stone upon
learning of the court’s decision. “As an industry, we must find a way
to give music fans what they want, which is fast and easy music on the
Internet. While Napster, the technology, is very compelling, Napster the
business, has shown no respect for the artists who create the music
everyone wants to hear, download, trade and profit from.

Filling in the middle was upstart Apple Soup, a brewing Napster spinoff backed by the movie industry.

“Today’s ruling is not the death of peer-to-peer networks, but a call to resolve how this runaway success will work with existing copyright and intellectual property.” said AppleSoup CEO, Bill Bales. “AppleSoup is the next generation peer-to-peer network that lets content owners safely distribute anything digital via the Internet, while retaining control of their creative works. This approach gives consumers the opportunity to access great content currently not available on the Internet. As a strong believer in the power of peer-to-peer and as an early pioneer in the Napster effort, I wish them the best as they work toward a resolution on today’s ruling.”

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