COPYRIGHT HOLDERS APPLAUD APPEALS COURT DECISION ON NAPSTER
Copyright holders claimed win Mon. when a federal appeals court refused to overturn lower court order barring Napster from facilitating transfer of copyrighted songs on Internet. “The District Court correctly recognized that a preliminary injunction against Napster’s participation in copyright infringement is not only warranted but required,” 9th U.S. Appeals Court, San Francisco, said in Feb. 12 opinion. However, 3-judge panel sent case back to U.S. Dist. Judge Marilyn Patel, San Francisco, to craft narrower injunction that would: (1) Require Napster to remove infringing material only after record labels notified it of copyrighted works available on Napster system. (2) Force Napster to actively police its service to keep out pirated music. Unanimous, 50-page decision went down line in favor of music labels and against Napster, said lawyer Russell Frackman. Decision “pretty much writes Napster’s epitaph,” said lawyer Chuck Cooper.
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“It’s time for Napster to stand down and build their business the old-fashioned way,” said RIAA CEO Hilary Rosen at news conference announcing decision. She called upon Napster to work productively with recording industry and not to delay matter with appeals. In meantime, preliminary injunction issued by Patel -- and stayed pending appeal -- will remain in abeyance, court said.
Napster officials downplayed decision, saying service wouldn’t need to shut down at least until after Judge Patel issues narrower injunction, and probably not then. Napster attorney David Boies said it probably would take at least several days, although probably not months, for new injunction to be issued and that Napster and others would have opportunity to make arguments about what injunction should involve.
Napster also will appeal Appeals Court decision, first by seeking en banc hearing by full court. Napster attorneys also said they might file motion to stay injunction if it’s issued before appeals are final. Boies indicated that appeals would be based on claims that Appeals Court made “new law” that didn’t comply with legal precedents or congressional intent.
Napster officials believe Appeals Court decision will require Patel to narrow injunction significantly. Boies said Appeals Court indicated that Napster could be required to limit access only to music files within context of its existing architecture, meaning it didn’t have to redesign it entirely. He also said decision appeared to put burden on copyright holders to identify individual music files that were subject to copyright. Napster lawyers said copyright holders to date had legally identified only 200 songs that were subject to copyright. Any injunction should not apply to songs by the 40,000 artists already covered by agreements negotiated by Napster, CEO Hank Berry said. He said Napster would continue to negotiate with music rights holders, and he expected amount of music to be legally available to expand rapidly.
Napster disagrees with bases of Appeals Court decision, including finding that its users were committing commercial violations even though no money was changing hands, Boies said. He said Napster would appeal decision that Congress didn’t intend that Audio Home Recording Act cover copying by computers and that Digital Millennium Copyright Act didn’t provide safe harbor for Napster.
Napster will be urging its users to contact their representatives in Congress, Barry said. Supporters noted that in earlier round Napster users flooded office of Sen. Hatch (R-Utah) with 50,000 messages within 2 days. “If they direct their users to contact Congress about this, there will be a wave,” one supporter said.
Neither CEA nor Home Recording Rights Coalition has decided exactly what action to take, CEA Pres. Gary Shapiro said, but “if there is discussion in Congress, we will be part of it.” He said they also would consider joining in any appeal. Meanwhile, Shapiro predicted there would be even larger wave of Napster use in period before final injunction was issued, that other file- sharing services not covered by injunction would become more popular and that there might be “a whole new look at copyright” as result of decision.
Rep. Conyers (D-Mich.) called ruling “a huge victory for the Internet, consumers, and e-commerce and means that the information age will not countenance high-tech piracy.” Conyers, Judiciary Committee’s ranking Democrat, was just expressing his view of decision, we're told: There are no plans at this point for congressional action based on ruling. MPAA Pres. Jack Valenti said decision’s biggest winner would be “the consumer because it will encourage content owners to put their creative works online knowing that the courts have confirmed what everybody knows: You cannot take for free what belongs to someone else.” Digital music subscription service FullAudio also applauded decision, saying it validated the need for music industry to craft new business models.