Napster wins last-minute reprieve

Fans can continue to trade MP3s; the appeals court will hear arguments in September.

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A federal appeals court granted Napster a new lease on life Friday afternoon, only hours before a court-ordered deadline would have required the service to shut down.

In staying the injunction issued Wednesday by a federal district court, the Ninth Circuit Court of Appeals said that Napster users could continue to swap MP3s while lawyers argue the case.

The appeals court also granted Napster’s request for an expedited appeal of the injunction. Both Napster and the recording industry plaintiffs will file briefs over the next month, after which the appeals court will hear arguments and rule. So Napster has at least another two months or so of uptime.

“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,” said Shawn Fanning, the 19-year-old creator of Napster. “We’ll keep working and hoping for the best.”

Naspter CEO Hank Barry, who earlier had suggested employees would likely be laid off if the injunction took effect, said on Friday he was “gratified and appreciative” of the appeals court reprieve. “I believe the Napster technology can help everyone involved in music — including artists, consumers and the industry. 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,” said Barry.

But Hilary Rosen, CEO of the Recording Industry Association of America, called the temporary stay “a disappointment.” She downplayed the significance of the appeals court action, saying that the court “apparently regards this case as the first of its kind, and wants to consider it before any injunction takes effect.” And she expressed confidence that the music industry would be the ultimate victors in the digital download battle.

“It is frustrating, of course, that the tens of millions of daily infringements occurring on Napster will be able to continue, at least temporarily,” said Rosen. “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. We look forward to the day when the infringements finally cease.”



Earlier Friday, with the midnight deadline looming for Napster to comply with the injunction that would shut it down, the company called for a “buy-cott” to prove that Napster can sell CDs, not just swap songs for free. Fanning said: “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. 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 join us this weekend for a ‘Napster Buy-cott Weekend.’”

Naturally, the company recommends the work of those artists and bands who have been vocally supportive of Napster, like Chuck D, Marianne Faithful and Limp Bizkit. And it sure wouldn’t make a bad impression on Warner Bros., Sony, Virgin and the dozen-plus other recording companies suing the music start-up for copyright infringement, if Napster’s 20 million users scooped up cartloads of CDs by artists on their labels — even though a mammoth sales blowout would hardly cause the music industry to back out of the suit.

And who knows what fans will do — especially given the confusion about strategy in the pro-Napster camp. Even as Napster is calling for a “buy-cott,” numerous Napster fan Web sites are declaring a boycott.

Meanwhile, Ian Clarke, the creator of Freenet, lashed out against the Recording Industry Association of America’s (RIAA) fight against Napster, declaring it all but futile:

“I think it is ridiculous, and merely delays the inevitable. The RIAA is indeed fighting a losing battle, because they are fighting their own customers. Perhaps next they will attempt to sue the creators of the Internet because it too can be used to ‘pirate’ their music?” he said via e-mail.

“Any legal action against me would be completely pointless since I have no power to ‘shut down’ Freenet. Further, in a fair court, any legal action against me would fail just as legal action against the manufacturer of women’s stockings used in a bank robbery would be thrown-out. I think this sets the stage for a battle between technology and the small-minded people in industry like the RIAA, and technology — as always — will win.”

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