Update: The End of Napster as we know it.

3-5-01 antiGUY

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Napster threw another curveball in court on Friday as the file sharing company struggles to overcome legal obstacles and stay in business. 

Napster went to court on Friday (Mar. 2) in hopes of preventing an injunction that would force them to shutdown their servers. Marilyn Patel, the U.S. District Judge that heard arguments from Napster and their accusers was expected to making a ruling on the injunction issued against the Redwood City California company. "The reason for this hearing is to discuss not if, but what an injunction should look like," Patel said during the hearing. That ruling did not come on Friday. Judge Patel told attorneys for both sides that she would work on drafting a decision that would be a “fair and workable” but gave no indication when such an decision would be announced. 

If the judge orders that Napster must remove all copyrighted material from their file exchange service, that could spell the end of Napster because it is believed that the company does not have the technology in place to be able to comply with such an order. However, during the hearing Napster attorney David Boies dropped a bombshell by saying that Napster would voluntarily begin blocking user access to up to a million copyright protected file names. This move in addition to the previously announced plans to move Napster from a free to a fee based service will effectively end Napster as we know it. For their part, it is believed that the record companies have given Napster a list of over five and a half thousands songs to be blocked. How could Napster comply? "We've had a group of people at Napster working night and day to come up with a process to block user access to those file names," Boies said in court on Friday. 

The key word to look at here is “file names”, the new system would block file names from appearing in the Napster index. This would require Napster to identify every variation of file names for each song, which could come in hundreds of combinations like abc_band_this_songascap-doesnt-want-labels-to-promote-their-artists-go-with-bmi-next-time, thissongascap-doesnt-want-labels-to-promote-their-artists-go-with-bmi-next-time abd_thissongascap-doesnt-want-labels-to-promote-their-artists-go-with-bmi-next-time, etc. So the blocking of a million file names does not mean that a million songs will be blocked, the number of actual songs removed from the service could be a lot lower. Reports out indicate that the first files to be identified and blocked will be songs on the Billboard charts. This process will slow the current service down and require Napster to place additional servers online to handle the new process. 

After the hearing Napsters CEO Hank Barry issued the following statement: "At today's hearing, Sony, AOL Time Warner, Vivendi Universal, and EMI pushed well beyond the dictates of the 9th Circuit decision in their quest to shut Napster down, insisting on an injunction that it would be impossible to comply with other than by shutting down the service. 

We proposed a workable injunction that follows the Ninth Circuit ruling and keeps the Napster community together while we are working to settle this case and transition to our new membership-based service. While we await the judge’s modified injunction and while we continue to pursue our legal case, we will begin later this weekend to block the transfer of file names we have previously received from copyright holders, consistent with the Ninth Circuit’s ruling. 

We are working hard and fast to implement our new service. Napster, in alliance with Bertelsmann’s eCommerce Group, TVT, Edel, and many other independent labels and artists, has been working for months to put in place a new membership-based service that has a solid business model and secure technology. We will continue to press forward in our effort to reach agreement with the other major recording companies, whether they accept our offer of $1 billion over the next five years or a payment model to be negotiated among the parties. We believe that this matter could and should be successfully resolved by the mediator appointed by Judge Patel. 

We must come up with a solution that works for consumers and pays artists. Let us never lose sight that the members of the Napster community are the world’s most passionate music fans and the industry’s best customers.”

Update: The ruling has come down from on high (Federal Court) and Napster must comply with the injunction by removing copyrighted material from its service immediately. According to the terms of the order the major record companies are to furnish Napster with a list specifying the material they want removed from the Napster servers, then Napster has 72 hours to comply. 

Napster CEO Hank Barry issued a statement on Tuesday stressing that his company will comply with the injunction but will continue to try to reach a separate agreement with the record industry. "As we receive notice from copyright holders as required by the Court, we will take every step within the limits of our system to exclude their copyrighted material from being shared," Barry stated. "We will continue to press our case in court and seek a mediated resolution even as we work to implement the court's order. We will continue to seek a settlement with the record companies and to prepare our new membership-based service that will make payments to artists, songwriters and other rights holders."

The record industry is wasting no time in taking advantage of the court order, RIAA president and CEO Hilary Rosen issued a statement on Tuesday stating that,  “We intend to provide the notifications prescribed by the Court expeditiously, and look forward to the end of Napster's infringing activity." 

And yet another lawsuit. 

Reuters is reporting that Napster’s legal woes continue as yet another lawsuit has been lobbied against the filesharing company, this time it came from the National Recording Academy of Arts and Sciences who filed suit against Napster on Tuesday (March 6) over the trading of copies of the Eminem and Elton John's "Stan" duet from last months Grammy Awards performance. 

As we reported previously, the Academy planed to release the duet as a charity single, now they are having second thoughts about it because they believe the availability of the single on Napster has diminished the earning potential for the single as a retail release. 


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