Napster Ordered to Remain Offline

From Reuters

In what could be the final nail in the coffin for Napster Inc., a federal judge Wednesday ordered the song-swapping service not to resume operations until it can prove that it is not violating music industry copyrights.

Napster, which has been inoperative for almost two weeks as engineers fix technical glitches with its new song-filtering system, was given the order during a closed-door meeting Wednesday by Judge Marilyn Hall Patel, sources close to the situation said.

Patel told the service not to resume operations until the new filters were 100% effective--a demand that could be very hard to fulfill, the sources said.

Napster's foes in the music industry were quick to proclaim the end of the line for the legally embattled service.

"Judge Patel's decision today that Napster should not resume operations until it can show that it can comply . . . was inevitable given its failure to comply with the court's order for so long," Hilary Rosen, president of the Recording Industry Assn. of America, said in a statement.

Napster representatives said they had no immediate comment and were seeking clarification of Patel's latest order.

Patel in March handed down a preliminary injunction against Napster, requiring it to block song files that are covered by music industry copyright.

Napster suspended file-sharing July 2 for a self-imposed shutdown as it battled technical glitches related to its latest upgrade, which was intended to help it comply with Patel's order.

Napster's service--once wildly popular--already had seen usage drop sharply as it imposes more controls over the trading of copyrighted music.

Research firm Webnoize reported in late June that users shared an average of 1.5 songs each on Napster's service, down from an average of 220 songs shared per user in February. Since the self-imposed shutdown July 2, they have not been traded at all.

Napster has sought to win over the major recording labels ahead of a planned launch of a paid subscription service this summer, but many recording companies have been developing their own online services.

Last October, Napster received a cash injection from Bertelsmann, one of its legal foes, to help it develop a secure version of the service.

More recently, Napster clinched a licensing deal with EMI Group, AOL Time Warner Inc. and Bertelsmann's BMG, all of which are part of MusicNet, a subscription joint venture with RealNetworks Inc. Under the deal, Napster would get these labels' content once it provides a legitimate service that pays royalties.

Rosen, who has led the industry's efforts to shut down Napster, said Wednesday the song-swapping service's efforts to get on the right side of the law looked hopeless.

"While we appreciate that Napster is attempting to migrate to a legitimate business model, its inability to prevent copyright infringement from occurring on its system has only hampered the development of the marketplace in which it now hopes to compete," Rosen said in a statement.

"Today's ruling sends a clear signal to all infringers: Any attempt to hide illegal activity behind the shield of technological innovation will not be tolerated."

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