Appeals Court Upholds Order Shutting Down Aimster Service

Aimster Inc., an Internet music swapping service that has changed its name to Madster.com, on Monday lost a bid to overturn a ruling that shut down the service.

Aimster was ordered by a federal judge in Chicago to halt illegal song swaps while defending itself against suits by the Recording Industry Assn. of America.

The U.S. 7th Circuit Court of Appeals upheld that ruling, saying Aimster had not been able to show instances in which its service was used for lawful means rather than the illegal trade of copyrighted works.

“Far from doing anything to discourage repeat infringers of the plaintiffs’ copyrights, Aimster invited them to do so, showed them how they could do so with ease using its system and by teaching its users how to encrypt their unlawful distribution of copyrighted materials, disabled itself from doing anything to prevent infringement,” the three-judge panel wrote.

The ruling is the latest to favor the recording industry in its fight against online music piracy, blamed for drops in sales at music companies such as EMI Group. Companies such as Vivendi Universal, Bertelsmann and Sony Corp. have shut down Napster Inc. and are in legal battles with other file-sharing services including Morpheus, Grokster and Kazaa.

The Chicago-based 7th Circuit said the recording industry demonstrated that it was likely to win the lawsuit and that any financial damage to Aimster was outweighed by the irreparable harm the music industry would incur if the service continued.

RIAA President Cary Sherman said he was delighted. Aimster founder Johnny Deep didn’t respond to an e-mail seeking comment.