Presiding Judge Marilyn Patel of the U.S. District Court in San Francisco granted the industry`s request for an injunction, ruling that the hugely popular Napster service, with about 20 million users, was primarily used for trading copyrighted material with Napster`s knowledge. In their first lengthy legal response to the record industry`s attempt to shut down the service, Napster`s lawyers said today that searching for and downloading copyrighted songs is protected by law as long as Napster members themselves don`t make money from the recordings. Napster claimed its system was fair use, not infringement. It supported this argument by stating that Napster users used the service to make temporary copies before purchasing music (“sampling”) and to access music that its users already had in CD format (“space moving”). The Land- und Appelungsgericht dismissed both applications. The sampling is a commercial use, the court ruled, even though some of the users eventually bought the music. While large-scale reproduction does not preclude a fair use claim, it militates against such a finding. In addition, the recorded music industry found that its marketing had been affected by Napster. The legal battle over Napster began in December when Time Warner Inc., Sony Corp, Bertelsmann and other record labels, represented by the Recording Industry Association of America, sued the service for copyright infringement. The original order, issued by Judge Patel in July, found that Napster was involved in widespread music piracy by providing the file-sharing service. The Court of Appeals painted in an apparent effort to refine jurisprudence on the two-year-old Digital Millennium Copyright Act and continued to stay the injunction, which was issued two days after it was issued, while the judge revised it.
Bertelsmann A.G., the German entertainment conglomerate, struck a deal with Napster in November, dropping its lawsuit and making its catalog available on the service in exchange for the right to buy a stake in the company. Financial details were not disclosed. Launched in May 1999, Napster allows its users to exchange music files in MP3 format, which for the first time allowed regular musicians and fans to record complete songs in compact storage space and with audible audio quality. New members are asked whether the service can scan their computer`s drives for music files. If they grant permission, any other user who logs on to the same server can access the files. Napster is facing a press release from the Recording Industry Association of America (RIAA) and its member record labels asking a judge for a restraining order removing all songs from major labels from the file-sharing service while a major case goes to court. Finally, the company reiterates its claim that it is simply an online music “repertoire” and is therefore not legally responsible for the actions of people who use its service. The company lost that argument in a previous legal cycle. However, Napster claims that the online trading of MP3 music files falls under the parameters of the Audio Home Recording Act of 1992, which allows music to be copied for personal use. Record companies claim that Napster facilitates large-scale copyright infringement by allowing its millions of members to search for songs on each other`s computers and download them for free. In its recent legal briefs, the industry cited investigations proving that online file sharing is already hurting CD sales. “If Napster users are not acting illegally, then there is no contributory (copyright) infringement,” David Boies, the high-level antitrust lawyer recently hired by Napster to lead its legal team, said on a conference call with reporters.
Two days later, Judge Patel ruled that Napster was not protected by the Safe Harbor provisions of copyright law, essentially telling the company that it could not simply hear evil. The company closed most of the accounts reported by Mr. Ulrich, but this was largely a token measure. Anyone can sign up for the service with any username. The file exchange company responded today with a series of its own surveys indicating that Napster is actually helping boost CD sales, noting that retail sales have increased since the service began. According to a survey by a Wharton School of Business professor, 70 percent of Napster members surveyed said they used the service to try out music before buying. “File sharing is here to stay, and we will continue to work to build a membership-based Napster service backed by the music industry,” Andreas Schmidt, CEO of Bertelsmann`s e-commerce group, said in a statement today. Unlike predecessors like mp3.com, the Napster service is fast, easy, and free.
Instead of asking users to create a website promoting their own music, Napster asked its users to scan a CD into a computer file and publish the music to cyberspace, creating an obvious boon for music fans. They quickly realized that the company would make no effort to interfere with their dealings, whether it was atmospheric sounds, Woody Guthrie`s protest songs, or the Backstreet Boys` latest money generator. Through the judicial investigation process, Napster obtained internal records from the record company showing that the RIAA was “abusing copyrights for anti-competitive purposes,” according to Boies. This undermines the association`s right to sue Napster on copyright grounds, Napster claims. Napster`s service uses MP3 — a file format that allows music files to be stored on a PC in small packets of data — by providing software that allows users to see what MP3 files other Napster users have stored on their computers. The software allows users to search and download songs from other people`s computers. In its reasoning before the court, Napster compared itself to internet service providers who are legally allowed to provide links to mp3 files unless they are notified by a copyright holder that the files infringe a copyright. The struggling online music-sharing company has a simple message for the courts and for the record industry: downloading songs online without paying for them is legal. “A majority of Napster users use the service to download and download copyrighted music,” she said. The case marks a milestone in the uncharted waters of Internet copyright law, closely followed by policymakers, lawyers, consumers and entrepreneurs. Legal experts also said the impact on the case could go beyond music, to share other media such as movies, and set the tone for how intellectual property rights are defined online.
Napster Inc. suffered a major legal setback today when a federal appeals court ruled that the millions of people who share music through its online service are infringing copyrights and that the company must stop that infringement. As a subscriber, you have 10 gift items to offer each month. Everyone can read what you share. If you`d like to know more, the @WashULaw offers an LL.M. online. in the U.S. law program, a course called “Intellectual Property,” which can help you broaden your understanding of specific topics that may be relevant to cases like these.
The Federal Court of Appeal ruled that the gist of Napster`s argument — that it simply allows computer users to transfer music files online — is valid. But while it refused to hold the company liable simply for allowing the service, the appeals court also struck down Napster`s ability to use willful ignorance of its users` actions as a defense. Peer-to-peer file-sharing issues were renegotiated a few years later when a successor company to Napster, Grokster, was sued by MGM Studios in MGM Studios, Inc. against Grokster, Ltd., 545 U.S. 913 (2005). Currently, services like BitTorrent and The Pirate Bay continue to fight copyrighted owners over the future of Internet file sharing. Heavy metal rock band Metallica and rap singer Dr.