Federal Appeals Court Shuts Down Napster

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Date: Monday, February 1st, 1999, 00:00
Category: Archive

Lauren Hirsch
Legal correspondent

In a broad ruling that may shut down Napster for good, the United States Court of Appeals for the Ninth Circuit ruled today that Napster must put an end to its peer-to-peer music swapping service. Mac users who use Rapster or Macster to access the service will be affected as well.

The injunction was originally granted in August, 2000, by the United States District Court for the Northern District of California but was stayed pending appellate review by the Ninth Circuit Court of Appeals.

The appellate court cited copyright violations as the reason for upholding the District Court’s injunction against Napster, despite recent strategic alliances with companies such as Bertelsmann AG, the parent company of the BMG music unit, who has said it will drop its lawsuit against Napster once it secures an acceptable subscription service. Though BMG still remains a party to the lawsuit, Napster fully settled with one of the other remaining parties to the lawsuit, TVT Records, in January, 2001.

The injunction will not be enforced until United States District Court Judge Marilyn Hall Patel adapts her August, 2000, injunction to today’s federal appellate court ruling.

Fearing the ruling, millions of users flooded Napster?s servers over the weekend. Napster will be shut down until the outcome of the underlying lawsuit against it has been resolved. Any resolution to the lawsuit in favor of the music companies will likely involve some sort of subscription fee such that music companies who own rights to some of the music traded on Napster can recoup some of what they feel is a severe profit drain.

For its part, Napster is disappointed with the ruling, and is arguing that shutting it down until resolution of the lawsuit will put it out of business for good. Napster’s primary argument is that while it does provide the means for users to swap potentially copyrighted music, it has no direct involvement in the transaction and is thus not legally responsible for any loss the music companies may experience as a result of its service.

The entire opinion is available for download at the United States Court of Appeals for the Ninth Circuit’s web site.

Lauren Hirsch is an attorney specializing in technology and computer law. She is a member of the litigation and computer law departments of Schnader Harrison Segal & Lewis.

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