Napster Caves in Latest Legal Round

Music file–sharing service Napster Inc. appears to be losing its fight against the Record Industry Association of America. On May 8, judge Marilyn Hall Patel of the US District Court in Northern California rejected two of Napster's key defenses: that it is a "mere conduit" of information, like a telephone network; and that it had made serious efforts to prevent "repeat offenders" from using the site. Telephone companies, Internet service providers, and other types of information services are exempt by law from being responsible for the information transmitted over their systems, provided they make reasonable attempts to control abuses. Napster doesn't qualify on either count, Judge Patel found.

The RIAA celebrated the ruling. The Association has pursued Napster through the legal system for its ability to enable the widespread sharing of copyrighted recordings. Napster is also under fire from rapper Dr. Dre and rock group Metallica, both of whom are represented by attorney Howard King. The week before Judge Patel's ruling, Metallica had presented the service with the screen names of 335,000 Napster users said to be pirating Metallica's music.

In response, Napster announced May 10 that it had removed 317,377 users accused of violating copyrights. The move may be purely cosmetic, however, as Judge Patel noted that the service does not require users to submit their real names, nor does Napster keep track of IP addresses belonging to dismissed members. IP addresses are the identification numbers of every computer on the Internet. It is extremely easy for repeat offenders to sign up as new accounts with Napster, Patel noted.

Napster's next move will be to pursue the argument that it is "an Internet search engine"—another information service protected by federal law. Napster is also claiming that it has many completely legal purposes other than the sharing of pirated music.

In a separate but related case, the music industry has proposed that San Diego–based pay damages of roughly $100 million for past copyright infringements, which is approximately a third of the Internet music site's net assets. was found in violation of copyright law last month in a suit brought by the "Big Five" of the music industry: Seagram Co.'s Universal Music Group, Time Warner Inc.'s Warner Music Group, Bertelsmann AG's BMG Entertainment, EMI Group PLC's EMI Recorded Music, and Sony Corp.'s Sony Music Entertainment. Inside sources say that once the punishment has been meted out, the record companies are interested in negotiating licensing terms for the future use of audio file–sharing protocol MyMP3.