Napster Is Ordered to Halt Swap of Music
Delivering a deadly blow to a company that enabled music piracy on an unprecedented scale, a federal judge on Wednesday ordered Napster Inc. to shut down or stop allowing its 20 million users to swap copyrighted songs.
Issuing a preliminary injunction sought by the world’s largest record companies, U.S. District Judge Marilyn Hall Patel shot down every line of defense the fledgling company raised and rebuked Napster in language that was sometimes as colorful as it was harsh.
Napster “created this monster,” she said. “Now these are the consequences they face.”
She gave the company until midnight Friday to block the transmission of thousands of copyrighted songs owned by Sony, Warner Music and the other major record labels that were plaintiffs in the case.
Napster has become one of the hottest technology companies in the country in the last six months, partly because of how quickly its user base mushroomed to 20 million, but also because of the dire threat it posed to the traditional record industry, which still derives the bulk of its revenues from the sales of compact discs.
David Boies, lead attorney for Napster, told reporters after Patel’s ruling that the online music company hopes for a stay of the injunction and intends to appeal the decision to the U.S. 9th Circuit Court of Appeals immediately.
Though Napster was the sole target of the ruling, Patel’s decision is likely to have a broad impact on intellectual property ranging from books to movies.
It signals that courts are prepared to enforce traditional copyright laws at a time when some believe technology is poised to make them obsolete.
Whole sectors of the economy--including the record industry, the venture-capital community and technology giants such as Yahoo Inc. and America Online Inc.--have been awaiting the outcome of the Napster case as a sign of how to proceed in an age when entertainment is disseminated digitally and intellectual property is under technological assault.
In the wake of Wednesday’s ruling, experts said funding for Napster and other companies with similar services is likely to dry up. And the record companies will be emboldened to unleash new lawsuits against other online foes.
In a news conference streamed over the Web, Napster founder Shawn Fanning said the company will continue to “fight for your right to share music.” The recording industry is trying to “shut you down,” he said.
Attorney Russell Frackman of the Recording Industry Assn. of America grinned broadly throughout Patel’s reading of her ruling, a stark contrast to the grim look of Napster’s legal team.
Afterward, the plaintiffs’ attorneys seemed giddy, chuckling and cracking jokes as they rode an elevator to a lobby packed with reporters and TV camera crews.
“This has been a very, very good day,” said Cary Sherman, general counsel for the RIAA.
For Napster, the ruling was a devastating setback, and the company may not be able to comply without shutting down altogether, at least temporarily. Boies said during the hearing that there was no practical way for Napster to separate legitimate use of its service from infringing uses.
But while the ruling represented a lopsided victory for the record industry, it brings only a modest amount of reassurance because other song-swapping technologies are already emerging that will be far harder to shut down than Napster.
Lars Ulrich, drummer with the heavy metal band Metallica, has been one of Napster’s fiercest critics in recent months, and his band risked alienating fans by becoming one of the few major rock acts to join the legal attack on Napster. But he said Wednesday that any satisfaction he takes from the ruling is muted by the challenges the industry still faces.
“All this time Napster has been talking about sharing, which has such a warm and cuddly ring to it. But that is just so misleading,” Ulrich said in an interview. “Napster isn’t sharing; it’s just taking.
“We’re glad the judge has agreed with us that they are infringing our copyrights. This is just the beginning of a long battle, though. It’s not going to end with Napster.”
Ulrich was alluding to other services, such as Open Nap, Gnutella and FreeNet, which also enable computer users to swap songs or almost any other content that can be expressed digitally. These services are not operated by a company but by informal networks of thousands of users, leaving no central target for the entertainment industry to sue.
“Napster or no Napster, these services will exist,” said Mark Mooradian, a senior analyst at Jupiter Communications. “The one thing this does is [it] buys the [record] industry a little bit of time.”
Patel’s ruling is expected to have an impact on other file-swapping litigation, and is expected to send a “clear message to other companies that are doing this,” said Sherman, the RIAA general counsel.
Last week the Motion Picture Assn. of America and the RIAA filed a similar suit against Scour Inc., a Beverly Hills-based multimedia firm backed by former super-agent Michael Ovitz.
Though Wednesday’s ruling is temporary, Patel said the recording industry had shown it would probably prove at trial that Napster had committed copyright infringement.
Napster, the judge noted, had failed to prove its program had substantial, non-infringing uses.
Napster has capitalized on the spread of such technologies as MP3, a format that converts songs on CDs to compressed computer files that can be shared over computer networks.
But Napster, created by Fanning, a 19-year-old college dropout, brought this burgeoning song-sharing habit to the masses by building a piece of software that made searching for songs and then trading them--one computer user to another--remarkably simple.
Napster’s defense had centered on arguments that there are legitimate, non-infringing uses for its technology. In particular, it pointed to its new-artist program, which allows little-known bands to distribute their tunes to Napster’s 20 million users.
Yet the bands must give their consent to Napster to distribute their material, a courtesy that “the company has not given the recording industry,” RIAA attorney Frackman said.
As of midnight Friday, Napster is enjoined from contributing to, or helping in the distribution of, “all copyrighted songs, music or material in which the defendants hold the rights to,” Patel told the crowded courtroom.
Patel is expected to issue an opinion detailing her ruling sometime in the next few weeks, court officials said Wednesday.
Patel repeatedly questioned Napster’s legal team over the piracy issue, and dismissed recent moves to develop a business model based on something other than bootleg music files as a convenient hedge.
“[Napster] did what it purported to do, to facilitate the downloading and uploading of music,” Patel said. “ ‘Piracy be damned’ was the sense one gets from reading [the evidence].”
Among that evidence was an internal Napster document, dating to the company’s inception last year, in which a company official said the business model would hinge on protecting users’ anonymity, “especially since they are distributing pirated music.”
Even if Napster is able to comply, its enormous user base is likely to be decimated once users are no longer able to download--for free--almost every popular song ever recorded.
According to the plaintiffs’ attorneys, copyrighted works account for about 87% of the songs available on Napster.
RIAA officials said they expect Napster users to swarm the service between now and the Friday deadline, in order to grab whatever bootlegged material they can.
Patel ordered the plaintiffs to post a $5-million bond to compensate Napster for lost business, in case Napster prevails in the case. Napster had sought a bond of $800 million.
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Music on the Web
More Online: a special Times report with articles about the growth of music sharing on the Internet is at https://www.latimes.com/musicweb.
