San Francisco – A federal judge granted a temporary injunction barring
digital music upstart Napster Inc. from trading music online, pending a
trial. The decision marked a major victory for the U.S. recording industry,
which had targeted Napster as a dangerous Internet rival that could
short-circuit traditional music sales.
U/S. District Judge Marilyn Hall Patel said it seemed clear that Napster’s
millions of users were not all simply engaged in swapping their personal
favorite songs.
Patel said the online company was encouraging “wholesale infringing” against
the music industry. Patel noted that 70 million people are expected to be
using Napster by year’s end and said “what lures them is the infringing
use.” “When the infringing is of such a wholesale magnitude, the
plaintiffs are entitled to enforce their copyrights,” Patel said. Patel’s
order, which came after a two-hour hearing, instructed Napster to cease its
music downloading operations by midnight Friday PT.
The judge also ordered the Recording Industry Association of America to post
a $5 million bond requested against any financial losses Napster could
suffer from being shut down temporarily.
Napster Chief Executive Hank Barry said his legal team -which includes top
gun lawyer David Boies, best known as the lead attorney for the Justice
Department in the Microsoft case – would work around the clock to appeal the
ruling before Patel’s Friday deadline.
“We understand the ruling and basis for it,” Barry said. “We disagree with
it, and we will continue to work hard between now and Friday to allow
Napster users to continue to use our service.”
The recording industry, which had targeted Napster as a high-tech haven for
piracy and copyright infringement, was quick to declare victory.
“The decision will pave the way for the future of online music,” said Cary
Sherman, a lawyer representing the RIAA. “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 work without permission.”
Metallica drummer Lars Ulrich, whose band also sued Napster, was a bit more
blunt in his euphoria. “We’re elated,” Ulrich said. “Sharing is such a warm,
cuddly, friendly word … this is not sharing, it’s duplicating.”
But the injunction is far from the last word in a case that has pitted new
technology against old laws and sparked concern among everyone from heavy
metal rockers Metallica to America’s most powerful corporate directors.
Napster works by letting fans swap songs free of charge by trading MP3
files, a compression format that turns music on compact discs into small
computer files that can be easily sent back and forth over the Internet. It
has become one of the most prominent of a number of new, Internet-based
services that are challenging old concepts of copyrighted material and
consumer sales.
The RIAA sued Napster in December, accusing it of encouraging an
unrestrained, illegal, online bazaar. On Wednesday, RIAA attorney Russell
Frackman told the court that, as the hearing was going on, 1,400 songs were
being downloaded each minute via Napster’s software.
Napster argued that personal copying of music is protected by federal “fair
use” laws, and that it encourages the sampling of new music and promotion of
new artists.
It said its service should be considered a non-infringing use as defined by
the precedent-setting Sony Betamax case. In that case, the movie industry
tried to quell the development of VCRs, claiming they would be used
primarily to make illegal copies of copyrighted movies. The movie industry
lost the battle, but Patel said Napster’s program did not meet the same
criteria as VCRs. She also said it was hard to envision applying the “fair
use” principle to a worldwide service of some 20 million users.
Napster provided a clear target for the lawsuit because users trade song
files through more than 100 central computer servers at Napster. The
injunction will likely have no effect on Gnutella and other decentralized
“freeware” technologies spawned by Napster. With Gnutella, there is no
center, and the song files are traded directly between a constantly changing
collection of computer users.
The music industry has made Napster the focus of a long-running dispute
between copyright owners and Internet enthusiasts who believe information of
all sorts should be traded freely.
“All of this litigation is really setting the groundwork for what is going
to the future of the Internet,” said Larry Iser, an intellectual property
attorney.
The RIAA estimates that song-swapping via Napster by an estimated 20 million
people worldwide has cost the music industry more than $300 million in lost
sales.
But some research suggests that Internet song-swapping may not be so bad for
the music industry after all. A recent study of more than 2,200 online music
fans by Jupiter Communications suggests that users of Napster and other
music-sharing programs are 45 percent more likely to increase their music
purchasing than fans who aren’t trading digital bootlegs online.
Both sides now must gird for the next step in the battle, a full trial over
the future of music and copyright law. Many industry analysts expect the
legal pressure to boost efforts on both sides to come to some sort of
compromise which will extend copyright protection to music which is
distributed over the Internet. But many disagree with that saying that a
settlement is unlikely.
