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Napster Case Returns to Court

Whatever the Appellate Court ruling, Napster has made its mark on music on the Web, observers say.

By Ashlee Vance, IDG News   

Come Monday, Napster and the Recording Industry Association of America (RIAA) will square off once again in the ongoing copyright battle that has made online music swapping an international cause celebre.

Confrontation has been fierce. Both sides are relentlessly issuing legal briefs and claiming support from bands, professors, and lawyers. Their tension is set to rise when San Francisco's Ninth Circuit Court of Appeals Monday debates the legitimacy of an earlier injunction against Napster's site.

In late July, Judge Marilyn Hall Patel issued an injunction against Napster, giving it a few days to stop distributing material copyrighted by the music labels the RIAA represents. The Appeals Court stayed the injunction and will reconsider the order next week. (See "Napster Wins Reprieve.")

The major questions for Monday's hearing: Will the court uphold the injunction, effectively closing Napster until the case goes to trial? Can the RIAA expect to track and halt the spread of copyrighted MP3s on the Web?

Not likely.

No Change of Tune

Both legal analysts and industry observers say Monday's trial should not profoundly change either party's operations. Attorneys suggest the court will return the case to Judge Patel for review. Technology analysts say Napster has already made its mark on Internet music, and its technology is here to stay.

Next week's skirmish probably won't end with a definitive ruling, says Leonard Rubin, head of intellectual property at law firm Gordon & Glickson. He expects the appellate panel will ask Judge Patel to reconsider her injunction.

Or, the appellate panel could overrule Patel's injunction entirely, Rubin says. It also could let the injunction stand.

Rubin is surprised the RIAA attorneys haven't raised some fundamental Constitutional issues in the case.

"The Constitution allows for the encouragement of the creation of artistic material by giving creators a reward. The RIAA isn't emphasizing this argument," he says.

Rubin expects the case to drag on for some time.

"If Napster wins, then the record companies will run, not walk, to Congress to change the copyrights laws," Rubin says. "If Napster loses, the record companies will pepper courts across the country with lawsuits against all of the Napster imitators." (See "Who's the Next Napster?")

Strong Songs Continue

No matter what happens, the reverberations from the case are already widely felt, says Eric Scheirer, an analyst with Forrester Research.

"I have heard that this particular appeals court is tech-friendly," Scheirer says. "But in the long run, it does not really matter what happens."

The issue is no longer one company batting the RIAA, but technology battling the old guard, Scheirer says. The Consumer Electronics Association filed a brief on Napster's behalf, signaling that some organizations want to see where peer-to-peer file-sharing can go.

The RIAA probably refused to negotiate out of court with Napster because the organization does not want to purchase Napster and pursue its business model, he adds.

Napster's model differs drastically from that of the music labels, which have spent millions of dollars building their own online music delivery systems. For example, most artists' contracts state that singles cannot be unbundled from the albums for individual sale, Scheirer notes. But most Web music distribution occurs one song at a time.

The labels "will have to renegotiate thousands of artists' contracts," Scheirer says. They won't want to concede their projects to an ambitious startup with a catchy name. So it's back to the courtroom. But win, lose, or draw, Napster's legacy is likely to reverberate on the Web for years.