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Court hears arguments for and against Napster staying online
(CNN) -- A federal appeals court in San Francisco heard arguments Monday in a copyright-infringement lawsuit filed by the music industry against popular Internet music-swapping site Napster Inc. The recording industry has sued Napster contending the music-sharing site violates intellectual property rights. A federal district judge had ordered the music sharing service to stop sharing music on its site. However, the appeals court allowed Napster to continue operations pending Monday's hearing. The appeals court continued the stay until the trial. Napster, the Internet upstart that caused a revolution by allowing people to download music free to their home computers, went to federal appeals court seeking to fend off a challenge by the recording industry, which wants it shut down.
The RIAA is asking the appeals court justices to reimpose a lower court ban prohibiting Napster from allowing copyrighted songs to appear on its Web site, a move that would essentially shut the service down and unplug its 30 million users. Napster, for its part, says it is simply a song-swapping service that has run afoul of recording industry attempts to maintain a "chokehold" on music distribution. The Redwood City, California-based service lets fans swap songs for free by trading MP3 files, a compression format that turns music on compact discs into small computer files. It is one of a growing number of new services, including Gnutella, Aimster and Freenet, that harness the power of the Internet to distribute entertainment directly to consumers via their home computers through the use of peer-to-peer software. As the case headed back to court Monday, millions of Internet music lovers flooded the Napster music site for last-minute copies of their favorite tunes, apparently fearing the service could be shut down. "Napster users are acting like kids in a candy store grabbing as many MP3 (music files) as they get their hands on," said Stacey Herron, an Internet music analyst with market research firm Jupiter Communications in New York. Media Metrix, a leading Internet traffic measurement firm, said traffic to Napster.com for the week ended September 24 had grown 23 percent to 945,000 average daily visitors from 773,000 in the prior week. Monday's hearing follows a decision by the 9th Circuit to lift a ban on Napster ordered by U.S. District Judge Marilyn Patel in July, pending a trial in which the service was to be charged with copyright infringement. “We look forward to an opportunity to present our case in court on Monday. We’re hopeful that the appeals court will uphold Judge Patel’s ruling," said Hilary Rosen Friday in a press release published on the RIAA Web site. “What we ultimately wish to come out of this process is an increased cooperation between innovation and industry so legitimate business models can make more music available online," Rosen said No date has yet been set for the trial, which could help define how books, movies and music are distributed in the Internet age. In the suit, Napster faces the most powerful recording companies, including Seagram Co. Ltd.'s Universal Music, Bertelsmann AG's (BTGGga.D) BMG, Sony Corp.'s Sony Music and Time Warner Inc.'s Warner Music Group and EMI Group Plc. Time Warner is the parent company of CNN and CNN.com. In a recent speech at the University of Michigan, Napster Chief Executive Officer Hank Barry said the company had tried to appease the record companies, suggesting a compromise under which it would charge users a $4.95 monthly membership fee to generate some $500 million in revenues for music companies and musicians. But he said the offer had been rebuffed by an industry determined to resolve the issue in court. The battle has not only turned the recording industry on its head, but has become an issue on university campuses, where the service is popular, and in Congress.
In a sign of a rift between Congress and the Clinton Administration, powerful Utah Republican Sen. Orrin Hatch recently sent a letter to the appeals court saying a brief filed by the Justice Department and its copyright office siding with the recording industry did not represent the opinion of lawmakers. While many copyright experts and lawyers initially said the law favored the recording industry in the lawsuit, some experts are beginning to think Napster's defense has some weight. In its latest salvo, Napster argued in a brief submitted to the court on September 13 that the case boiled down to the music industry's efforts to keep a "chokehold" on music distribution. Monday's hearings will allow lawyers for both sides to put fresh force behind their arguments, but is not expected to result in any immediate decision on the service's future, legal experts say. Instead, the appeals court panel is likely to issue a written decision at a later date. The Associated Press and Reuters contributed to this report. RELATED STORIES: Appeals court to hear Napster case Monday RELATED ANALYSIS: Findlaw: The Constitution and your CDs RELATED SITES: Napster | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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