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Digital Society


Napster Condemned to Die


(So why do I hear a death rattle in the music industry?)

SAN FRANCISCO -- Napster, the controversial file-sharing service that has
been the scourge of the music industry since it was launched late last year,
has been reduced to a chat room.
In a scathing decision Wednesday afternoon, U.S. District Court Judge Marilyn
Patel granted the recording industry a temporary injunction to pull the
file-trading portion of its service, effective Friday at 12 a.m. PDT.

In a lengthy statement, the judge said the recording industry had shown it
would likely win a trial, while the defendants had failed to prove the
software had substantial, non-infringing uses.
She even cited Napster executives for downloading copyrighted music onto
their hard drives.
"The significant use of this service is obviously trading copyrighted
material without obtaining copyright holders' permission," Patel said.

The RIAA originally filed the lawsuit against Napster in December, on the
grounds that the Napster application had created a safe haven for Internet
music piracy.

Napster attorney David Boies said he would appeal Patel's ruling.

Making Napster unavailable to its 20 million users brings the recording
industry one step closer to closing down the controversial company, which
created the application.

During his testimony, RIAA attorney Russ Frackman asked the court to enjoin
the Napster service, claiming that "before the trial was finished, the
service would have 75 million users," a user base that would irreparably harm
the industry and drive down CD sales.

Frackman said that while Napster has introduced evidence that CD sales may
currently be up, that doesn't address the rights that copyright holders have.

"I think that their evidence is completely irrelevant to the case," he said.
"You can't take copyrighted materials and argue that some of the people, some
of the time, can take those materials and use them for the betterment of
copyright holders."

Napster asked the court in May to throw out the lawsuit, claiming that it
qualified for the 'safe harbor' provision afforded to Internet service
providers in the Digital Millennium Copyright Act. Patel rejected Napster's
request for a summary judgment, setting up Wednesday's showdown in court.

Despite recent maneuvers to create a more "label-friendly" business model,
Patel hammered away at Boies over the piracy issue. She repeatedly asked why
the company would face financial ruin in the event of a shutdown if the
application has non-infringing uses.

Boies said there is "no practical way to separate the substantial from the
infringing uses."

Patel dismissed that and other arguments. "The fact that users get for free
what they would normally pay for indicates that these users are reaping the
economic benefit of this service," Patel said. "It appears to be that much of
these non-infringing uses have come later in the game and after the company
was already infringing."

In a statement, RIAA Senior Executive Vice President Cary Sherman said the
decision "will pave the way for the future of online music."

"This once again establishes that the rules of the road are the same online
as they are offline, and sends a strong message to others that they cannot
build a business based on others' copyrighted works without permission,"
Sherman said.

"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," Sherman said.

On Monday, the company announced a research and development deal with
software company Liquid Audio to provide technology to sell music securely
online.

Both companies are funded by the same venture capital fund, Hummer Winblad.
Patel's ruling could also have implications for Scour.com, the multimedia
version of Napster, which was sued last week by the Motion Picture
Association of America and the RIAA.
Wired News, July 27, 2000
-----
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