Appeals Court Grants Reprieve To Napster

MP3 file-sharing system won't have to shut down at midnight Friday.

The 9th U.S. Circuit Court of Appeals has granted a temporary stay to Napster Inc., delaying an injunction that would have forced the company's MP3 file-sharing service to shut down by midnight Friday.

"I am happy and grateful that we do not have to turn away our 20 million users and that we can continue to help artists," Napster founder Shawn Fanning, 19, said in a statement. "We'll keep working and hoping for the best."

Earlier in the day, Napster announced a "buy-cott weekend" campaign, urging users to demonstrate their passion for music by purchasing CDs on Saturday (July 29) and Sunday.

Friday's court decision puts off the preliminary injunction issued Wednesday by U.S. District Judge Marilyn Hall Patel at the request of the Recording Industry Association of America, which sued Napster for copyright infringement in December. The injunction gave Napster until midnight Friday to remove all copyrighted material owned by RIAA members, which include the five major labels and their subsidiaries.

Napster attorney David Boies said it would be impossible to identify and remove all the copyrighted material in such a short amount of time, thus forcing the service to go offline.

The stay allows Napster attorneys time to put together their formal appeal, for which they must submit an opening brief Aug. 18. The RIAA must reply by Sept. 8.

Napster Rallies Fans

In calling for the stay, Napster attorneys argued that Patel wrongly distinguished between personal and noncommercial uses, ignored the counsel of the Supreme Court by extending copyright law to cover new technologies and ignored evidence that Napster is helping, not hurting, the record industry.

"I believe the Napster technology can help everyone involved in music — including artists, consumers, and the industry," Napster CEO Hank Barry said in a statement. "New technologies can be a win-win situation if we work together on building new models — and we at Napster are eager to do so."

Napster is using this weekend's "buy-cott" to help bolster its claim that file sharing increases CD sales.

"We believe that file sharing among music fans helps to create a larger community of passionate music lovers, which allows the industry to sell even more music to fans," Fanning said in a statement. "To prove just how much our users love music — and to show the buying power of such a large group of music fans — we are asking all of our users to ... walk in — or log in — to their favorite record store and buy a CD by an artist they love."

Napster is suggesting that users participating in the drive give extra attention to artists who have supported the Napster cause, such as Chuck D, Limp Bizkit, Mix Master Mike, DJ Spooky, the Grateful Dead, Eve 6 and Social Distortion. A letter-writing campaign targeting the heads of major labels also is part of the program.

RIAA spokesperson Amy Weiss said the group would watch to see how the "buy-cott" program affects sales during the weekend but said she didn't see how it would affect the court case.

RIAA Remains Confident

The RIAA filed a 32-page response Friday morning to Napster's request for a stay. "Napster's claim that the injunction would put it out of business is both untrue and legally irrelevant," the RIAA said in its brief. "The law does not permit a company deliberately built on copyright infringement to complain that its business will be devastated if it is forced to stop trafficking in pirated music."

After the stay was granted, RIAA President Hilary Rosen issued a statement saying that though the group was disappointed in the decision, it was confident the court would side with the RIAA in the end.

"The Court of Appeals apparently regards this case as the first of its kind, and wants to consider it before any injunction takes effect," the statement said. "It is frustrating, of course, that the tens of millions of daily infringements occurring on Napster will be able to continue, at least temporarily. In fact, since the district court issued its order, the illegal downloading of copyrighted music openly encouraged by Napster has probably exceeded all previous records."

Traffic Hits High

Napster spokesperson Roy Dank said use of the service has been at "an all-time high" since Wednesday's court decision, reflecting a surge in publicity for Napster and a rush by users to download as many files as possible before the midnight deadline. The fear of Napster shutting down also has led many users to search for alternatives to the service.

The counter on a site where users can download the file-sharing application Gnutella (www.gnutella.wego.com) registered more than 1,300 hits in only five minutes Friday afternoon.

Scour Inc. President Dan Rodrigues said traffic on Scour.com, which offers its own file-sharing application, has increased by 80 percent in the past week and he attributed the increase to press coverage of the digital wars. The RIAA and Motion Picture Association of America sued Scour last week for copyright infringement.

Ian Clarke, creator of the file-sharing system Freenet, estimated that downloads have quadrupled since Wednesday's initial Napster decision.

GlobalSCAPE Inc., proprietors of yet another file-sharing service, announced Thursday that it restricted public access to its CuteMX application while the company ponders what the Napster decision means for centralized peer-to-peer networks.

Howard King, an attorney representing hard-rockers Metallica and rapper Dr. Dre in their copyright-infringement suits against Napster said Friday's decision doesn't necessarily signal an eventual victory for file-sharing systems.

"With the few hours they had to look at this, I think it would be foolish to look at the tea leaves and say they saw merit in Napster's legal position," King said. "I suspect that they were persuaded by Napster's argument that this is putting them out of business, in which case a favorable appellate court decision later really wouldn't do them any good. If they're put out of business tonight, and they win on appeal a year from now, they're still out of business."