Hot on the heels of a copyright victory against MP3.com, the Recording Industry Association of America has won the first round in its bid to stop the Napster MP3-trading program.
"The courts are obviously leaning in the direction of protecting copyright and working to protect intellectual property, and that's a big deal," said Stacey Herron, an online music analyst with Jupiter Communications.
U.S. District Judge Marilyn Hall Patel on Friday ruled against Napster's request to dismiss the case. The RIAA charged the San Mateo, Calif., company with contributing to copyright infringement in a suit filed in December in the Northern District of California.
Napster lawyers argued that the company is protected under the safe harbor provisions of the Digital Millennium Copyright Act, which maintains generally that Internet service providers are not liable for infringement that takes place on their networks.
Napster is a free program that links users, allowing them to search for and download MP3s directly from each other.
In a 16-page decision that hinged on minute details describing Napster operations, Patel found that MP3 files do not move passively through the Napster network, a distinction that would have solidified the company's protection claim.
"[T]ransmission goes from one part of the system to another, or between parts of the system but not 'through' the system," she wrote.
Having refuted Napster's claim that it is protected under one particular stipulation of the DMCA, Patel will now set dates for a trial in which she will determine how the act applies to the company.
"Napster just lost its last delaying tactic," RIAA President and Chief Executive Officer Hilary Rosen said in a statement.
A spokesperson for Napster lawyer Laurence Pulgram said he could not comment. "The upshot of the court's decision is to move the case ahead," Pulgram said in a statement.
Last week, a federal judge in New York also sided with the RIAA, issuing an opinion that MP3.com needed a license to create its My.MP3.com online CD storage and playback service.
The cases could cost each defendant millions of dollars in fines.
Meanwhile, Napster also faces individual copyright infringement cases from "Blackened" (RealAudio excerpt) hard-rockers Metallica and rapper Dr. Dre.
The Metallica case could wind up helping Napster in its upcoming battle with the RIAA. Patel found in part that Napster had not implemented a policy for dealing with known copyright infringers, and therefore was not eligible for the DMCA protection.
Last week, Metallica delivered to Napster some 335,000 names of user allegedly trading Metallica MP3s without the band's permission. Napster has promised to terminate the accounts of those users.
"That's helpful to them on the legal side," said Bart Lazar, an intellectual property attorney who has followed the case. "[But] it may hurt them on the business side ultimately, if instead of litigating against them every music publisher continually sends them lists of people who have to be terminated."
(This story was updated at 6:45 p.m. EDT Monday, May 8, 2000.)