August 11, 2000 5:20 PM PDT

Judge expands on Napster shutdown order

The loaded gun pointed at Napster's head loomed a little larger today, as federal Judge Marilyn Hall Patel released the details of her decision ordering the company to close its digital doors.

Three weeks ago, see story: Full text of Judge Patel's Ruling Patel granted a preliminary injunction against the music-swapping start-up that would have barred it from allowing any major-label songs to be traded through its service.

That order was quickly put on hold by an appeals court, but that stay is only temporary. Next week, Napster will submit its first legal papers laying out why it thinks Patel was wrong--and today's documents show that the company will have a high legal hill to climb.

Napster is one of several companies developing so-called peer-to-peer technology that lets people search and retrieve music files directly from one another's personal computers. The technology has been hailed as a revolutionary development for the Internet, much as Web browsers were five years ago. It also has been vilified by the entertainment industry, which fears peer-to-peer networks could make piracy of almost any digital work unstoppable.

Napster's defense against a wide-ranging lawsuit brought by the Recording Industry Association of America (RIAA) rests largely on the idea that downloading copyrighted songs for free isn't actually illegal. They claim a "fair use" for their members that rests on the contention that people using Napster are doing so for personal use, not for commercial benefit.

Patel clearly didn't buy this argument last month, and today she expanded on her original comments. (Read Judge Patel's ruling.)

"Given the vast scale of Napster use among anonymous individuals, the court finds that downloading and uploading MP3 music files with the assistance of Napster are not private uses," the judge wrote. "Moreover, the fact that Napster users get for free something they would ordinarily have to buy suggests that they reap economic advantages from Napster use."

Patel outlined most of these issues last month, but today's documents show the details of what both sides' attorneys are facing. The injunction, which Napster has said would force it to close its service altogether, has only been stayed pending an appeals court review of Patel's decision.

If that court finds Patel's conclusion--which says the record industry will suffer "irreparable harm" as a result of millions of downloads of their copyrighted songs on Napster--convincing, then it will likely reinstate the injunction.

Most of today's Napster special reportdocuments continue the skeptical tone that Patel struck in her decision against Napster last month.

Both sides have asked that much of their opponents' supporting evidence be dismissed as irrelevant or flawed. The recording industry was allowed to keep each of the studies it has submitted that purport to show declines in record sales as a result of Napster's existence, although the judge did make some criticism of their usefulness.

By contrast, the testimony of several Napster supporting experts was dismissed. Patel allowed the company to retain the study on which it had based much of its defense, which argues that Napster actually helped record sales, but she called it "gravely flawed."

The judge summed up her initial review of the effects of Napster with what may be her most damning statement, and one that the company must persuade the appeals court to disagree with.

"Indeed...(Napster) has See Newsmaker: Napster CEO fights for life of music firmcontributed to a new attitude that digitally downloaded songs ought to be free--an attitude that creates formidable hurdles for the establishment of a commercial downloading market," Patel wrote.

The company has said that Patel's decision would cripple the nascent file-sharing industry.

"We strongly and firmly disagree with the judge's decision," Napster chief executive Hank Barry said after the original decision. "We intend to see this through in every venue, in every court."

Napster's first court briefs addressing Patel's decision are due at the end of next week. The recording industry must respond by Sept. 18, after which a court date will be scheduled.

 

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