Federal appeals court rules against Napster

A federal appeals court dealt Napster a serious blow yesterday, ruling that the music trading service could be held liable if it fails to police its system and prevent the exchange of copyrighted material. The decision could lead to the company's eventual shutdown. Napster, Inc. will remain in business at least temporarily, however, while Federal District Judge Marilyn Hall Patel rewrites her injunction, which the appeals court described as too broad. The appellate court had earlier issued a stay of the original injunction -- which stated that Napster was engaged in wide-range music piracy -- while it considered the case. "The district court correctly recognized that a preliminary injunction against Napster's participation in copyright infringement is not only warranted but required," the three-panel judges' opinion said. Furthermore, they dismissed Napster's argument that its case was comparable to the Sony Betamax decision of 1984. In that case, the U.S. Supreme Court found that VCR manufacturers and videotape retailers were not liable for consumers duplicating movies. But Napster still has several options left open. The company could seek a review by the entire panel of the Ninth Circuit Court of Appeals, or file a petition to have the case brought to the U.S. Supreme Court. Accompanying either of these motions, Napster could request a continuation of the stay of the injunction and keep the service running. David Boies, a lawyer for Napster, told The New York Times that the company would appeal. Napster also plans to unveil a fee-based service later this year, after coming to an earlier agreement with several record companies. Penn students were unhappy to learn of Napster's looming fate, but few seemed surprised with the ruling. "We've gotten away with it for a while," College sophomore Janet Kang said. "If we have to start paying for it, it'll probably be cheaper than CDs, and there's always the network." Wharton freshman Nick Esayan agreed. "I'm not surprised with the ruling," he said. "I thought it was going to happen sooner or later. I'm just happy the University didn't ban it earlier in the year." Others expressed their support of the court ruling. "I feel that it's good that this is going through the courts," College junior Tara James said. "Napster has more of a responsibility to the artists than to the people downloading... I'm voting for the artists." Fearing an end to their file-sharing abilities, an average of 1.5 million users were logged on to Napster at any point over the weekend. An estimated 250 million songs were downloaded, according to Webnoize, which monitors the digital entertainment economy.