Napster Shut Down
S A N F R A N C I S C O, July 26, 2000 -- A federal judge shut down Napster Inc.’sInternet clearinghouse today, saying the company thatrevolutionized music distribution was encouraging “wholesaleinfringing” against recording industry copyrights and would likelylose at trial.
U.S. District Judge Marilyn Hall Patel noted that 70 millionpeople are expected to be using Napster by year’s end unless theservice is halted.
“It is pretty much acknowledged by Napster that this isinfringement,” Patel said, adding that “any of the potential,non-infringing uses of Napster are minimal.”
The injunction will go into effect at midnight Friday, after thenation’s largest record producers post a $5 million bond againstany financial losses Napster suffers from being shut down pendingtrial.
Napster’s attorney, David Boies, said the San Mateo,Calif.-based company will appeal.
“I think that a settlement, frankly, is unlikely,” Boies said.
The Copyright Debate
The Recording Industry Association of America sued Napster inDecember, accusing it of encouraging an unrestrained, illegal,online bazaar.
RIAA attorney Russell Frackman told the court that as thehearing was going on 1,400 songs were being downloaded each minutevia Napster’s software.
“Napster is attempting to build a user base to control digitaldistribution,” Frackman said. “It is the most egregious case ofmassive copyright infringement that has ever existed.”
Napster argued that personal copying of music is protected byfederal law, and that by encouraging the sampling of new music andpromotion of new artists.
It said its service should be considered a non-infringing use asdefined by the precedent-setting Sony Betamax case. In that case,the movie industry tried to quell the development of VCRs, claimingthey would be used primarily to make illegal copies of copyrightedmovies. The movie industry lost the battle, but Patel saidNapster’s program did not meet the same criteria as VCRs.
A Groundbreaking RulingNapster provided a clear target for the lawsuit because userstrade song files through more than 100 central computer servers atNapster. The injunction will likely have no effect on Gnutella andother decentralized “freeware” technologies spawned by Napster.With Gnutella, there is no center, the song files are tradeddirectly between a constantly changing collection of computerusers.
The music industry has made Napster the focus of a long-runningdispute between copyright owners and Internet enthusiasts whobelieve information of all sorts should be traded freely.
“All of this litigation is really setting the groundwork forwhat is going to the future of the Internet,” said Larry Iser, anintellectual property attorney.
Metallica Legal Battle AheadThe heavy metal band Metallica has been particularly outspokenagainst Napster. Metallica sued the company for copyrightinfringement after the band found more than 300,000 users tradingtheir songs online.
In response, Napster blocked access for more than 30,000 ofthose users identified by Metallica, but new people log on dailyand continue trading the band’s music.
The RIAA estimates that song-swapping via Napster by anestimated 20 million people worldwide has cost the music industrymore than $300 million in lost sales.
But some research suggests that Internet song-swapping may notbe so bad for the music industry after all.
A recent study of more than 2,200 online music fans by JupiterCommunications suggests that users of Napster and othermusic-sharing programs are 45 percent more likely to increase theirmusic purchasing than fans who aren’t trading digital bootlegsonline.
“Clearly, people who are using Napster love music. They’reprobably our best customers,” said Hilary Rosen, president of theRIAA.