July 3, 2000 5:00 AM PDT

Napster lawyers prep defense in music battle

Amid a heated battle over intellectual property rights online, lawyers for music-swapping software maker Napster today will present key arguments that could ultimately decide the fate of the company.

Napster is a software program that allows people to search for and share MP3 music files online. MP3 is a compression format that first made it practical to download digital recordings.

Since its launch last fall, Napster has signed millions of members who are eager to build digital record collections for free--a practice musicians, record labels and industry trade groups have vowed to shut down.

In a court filing due late this afternoon, Napster's legal team will respond to a motion for a preliminary injunction filed two weeks ago by the Recording Industry Association of America (RIAA) and the National Music Publishers Association.

The groups are seeking to force Napster to immediately remove all songs owned by the trade group's members from its song directories--a move that could effectively put Napster out of business by ending trade in its most valuable asset.

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Rick Dube
Senior Editor at Webnoize

Napster could choose one of two strategies in its preliminary injunction.

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A hearing in the case is scheduled for July 26.

The suit is moving forward even as Napster is seeking ways to become a friend rather than a foe of the recording industry.

The company recently received $15 million in funding from venture capital firm Hummer Winblad, which installed veteran music industry executive Hank Barry as chief executive.

Napster has also cooperated with artists including Metallica and Dr. Dre to remove members accused of illegally trading their songs.

At the same time, the company has hired a crack team of lawyers, headed by David Boies, the lead attorney in the government's antitrust case against Microsoft.

Today's motion from Napster will be the first time the company has Napster wildfire responded in detail to the RIAA's latest legal salvo. The last filing highlighted internal memos from Napster executives and founders that showed they were aware that people were engaging in music piracy while using their service.

"Users will understand that they are improving their experience by providing information about their tastes without linking that information to a name or address or other sensitive data that might endanger them (especially since they are exchanging pirated music)," co-founder Sean Parker wrote in a memo quoted in the record industry's brief. The parenthetical statements were part of the original memo.

The industry association also said in the brief that it had evidence that

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Rick Dube
Senior Editor at Webnoize

Napster seems to have earmarked its budget exclusively for legal defense.

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Napster executives themselves had illegally downloaded songs and held copies on their own hard drives.

Napster CEO Hank Barry has responded only indirectly to the industry's claims.

"This case is about whether it is legal to share MP3 versions of sound recordings over the Internet," he said in a statement responding to the RIAA's case. "We say yes--the major labels say no."

The legal fight will also be a battle of statistics. The RIAA has cited a survey of college students it says shows that Napster has hurt CD sales. Napster executives have said they will have statistics supporting their own case today.

 

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