March 1, 2001 11:50 AM PST

Court could issue Napster shutdown order Friday

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Digital music post-Napster
John Borland, senior reporter, News.com
Time is running out for music-swapping company Napster, which faces the possibility of a court order effectively shutting its service down as soon as Friday.

Attorneys for Napster and the record industry meet again in a San Francisco courtroom Friday at 10 a.m. PST, as federal Judge Marilyn Hall Patel gets ready to issue a preliminary injunction that will sharply limit the company's actions.

Patel will be working from an appeals court decision late last month that was critical of Napster's activities but said she had gone too far in her last decision. This time around, the appellate judges said, she must tell Napster to block trades only of those specific songs that have been identified by the record labels as copyrighted.

The problem is, even that narrow instruction has opened a new can of worms for Patel, Napster and the record industry. The question of just how individual songs can or should be blocked is a tricky one, with little agreement between the two sides. The answer will mean the difference between a crippled Napster and one that disappears altogether.

"That's really the problem with how this has played out," said copyright attorney Kenneth Freundlich, a partner in Los Angeles firm Schleimer & Freundlich. "That's a lot of what the argument is going to be about tomorrow. This is a technological question."

On Friday, the two sides return to Patel's courtroom, the site of a ruling last July ordering Napster to block most major-label content from being traded through its service.

Showing no sympathy for the company's protests that the order would force it to close down, in the previous decision the judge gave Napster just a few days to comply.

"Napster wrote the software; it's up to them to write software that will remove from users the ability to copy copyrighted material," Patel said at the time. "They created the monster...That's the consequence they face."

But the 9th U.S. Circuit Court of Appeals in San Francisco said Patel had gone too far. Napster was likely helping to infringe copyrights, but it is up to the record companies to identify specific violations before songs can be blocked, the three-judge panel said.

Not an exact science
Inside that mandate, however, was a caveat. "Napster...bears the burden of policing the system within the limits of the system," the court wrote. "Here we recognize that this is not an exact science."

The record companies believe that they simply must give Napster the names of songs and artists that are being traded, and it's up to Napster to figure out how to block those. But other industry observers have said that the appeals court could be saying the companies must identify specific file names, since the names of music files can change with each Napster member or even refer to different songs.

"There's a little latitude in what that means," said Whitney Broussard, an attorney with Selverne Mandelbaum & Mintz. Patel will need to scrutinize this practical question carefully, he noted. "One possibility is if Patel were to order the wrong injunction, this would go back to the appeals court," he added.

With one appeal already behind her, Patel is unlikely to rule immediately Friday, many attorneys say. Instead, she is likely to take some time mulling the technological possibilities and practical effects portrayed by both sides for at least a few days.

Best guesses have been wrong before, however. Few people expected Patel to rule immediately in July, when she waited only a few minutes after hearing both sides' arguments.

Whether it is a few hours or a few days until Patel's ruling comes, however, it's clear that Napster's days of unrestricted file-trading are numbered.

Napster last week offered to guarantee the industry $1 billion over five years in return for licenses to the copyrighted music. But that last-minute bid to reach a legal "cease fire" with the record companies has been publicly rejected by most of the big labels.

Several technologies and filtering models have been proposed as ways that Napster could block copyrighted songs but still allow other music swaps to go on. But the company still maintains that accurately filtering out millions of songs with no time lag is virtually impossible.

"I don't think there is a system around that can do file ID on a real-time basis," Napster Chief Executive Hank Barry said at a press conference last week.

Napster has already requested an appeal before a larger group of appellate judges. The court has not yet accepted or rejected that petition.

 

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