Appeals court: Napster must stop; lower court to clarify
By Brad Gibson
A three-judge appeals court agreed Monday with a previous injunction stopping
from allowing the distribution of copyrighted music files, but sent the decision back to the lower court for clarification and more specific guidelines on copyright infringement. The complex ruling ordered the company to remove links to users trading copyrighted songs stored as MP3 files.
In its ruling, the 9th Circuit Court of Appeals in San Francisco called the earlier decision “overbroad,” and told a lower court judge to rewrite her injunction to focus more narrowly on the copyrighted material.
Napster “knowingly encourages and assists its users to infringe the record companies’ copyrights,” the court wrote in its 58-page opinion. “Napster has knowledge, both actual and constructive, of direct infringement…Napster may be held liable for contributory copyright infringement only to the extent that Napster knows of specific infringing files.”
Although the court said injunction is “not only warranted but required,” it also said the lower court ruling had gone “overbroad” in its decision and instructed the court to create a new injunction. “We direct that the preliminary injunction fashioned by the district court prior to this appeal shall remain stayed until it is modified by the district court to conform to the requirements of this opinion.”
The panel said Napster may be held liable for copyright infringement by its users to the extent that it knew of specific material on its system and failed to act to prevent its distribution. As a result and for Napster to avoid liability, it must now purge its system of infringing material and block access to those songs in its search index. Other material not protected by a copyright may stay online for users to share.
Regardless of the court’s decision on blocking the swapping of copyrighted files, such a move will probably not happen anytime soon, as Napster lawyers are preparing an appeal which would halt the today’s court decision until the a judge hears the appeal.
“Napster is not shut down, but under this decision it could be. We are very disappointed in this ruling by the three judge panel and will seek appellate review,” the company said in a statement. “The court today ruled on the basis of what it recognized was an incomplete record before it. We look forward to getting more facts into the record. We will pursue every avenue in the courts and the Congress to keep Napster operating,” it added.
Hilary Rosen, chief executive officer and president of the Recording Industry Association of America, called the decision a clear victory. “The court of appeals found that the injunction is not only warranted but required, and it ruled in our favor on every legal issue presented,” she said.
For more than three months, the three-judge panel had been deciding whether or not to uphold a lower court’s July preliminary injunction against Napster. Big music companies, like Universal Music, Sony Music, Warner Music and EMI Recording Group, claimed in their suit that Napster is illegally assisting consumers to copy and distribute copyrighted music files and they want an injunction to stop it from operating pending a final decision in this landmark copyright lawsuit. Napster contends that downloading songs for free online is protected by copyright law and that the company itself isn’t responsible for the acts of its subscribers, regardless of whether they are breaking the law or not.
Despite today’s decision in re-issuing the injunction, the case is far from over. The company’s legal team is expected to appeal and take steps to stop the site from being shut down until further hearings are held. With appeals and possibility that an appeal will be turned down, it could take days or weeks to take effect. Industry watchers believe Napster will now quickly move forward to settle with the music companies and offer them a stake in a plan to sell music online. Bertelsmann, the parent of major label BMG Entertainment, invested in Napster last October to start a legal, fee-based subscription service.
Despite today’s decision, many contend they will just go elsewhere to trade music in a sort of “online underground”. In anticipation of just such a move, thousands of users accessed Napster over the weekend, downloading millions of copyrighted music files. One expert projected some 10,000 users were logging on to each of Napster’s 100 servers on Sunday at any one time, swapping nearly 2 million songs.