By CHRIS BARTON and REUTERS
SAN FRANCISCO - A federal judge has effectively shut down Napster, handing the recording industry a big win in the battle over copyright and the internet.
US District Judge Marilyn Hall Patel ruled that the wildly popular song-swapping service looked like a simple cover for music piracy.
Issuing a preliminary injunction requested by the Recording Industry Association of America (RIAA), the judge said millions of Napster users were engaged in "wholesale" copyright infringement by trading their favourite songs over the internet.
"The question is, you have designed a system enabling infringing and piracy. Can you stand back and say, 'We didn't know that'?" Patel said yesterday.
She then told Napster to cease trade in music covered by RIAA-member copyrights by 8 pm tomorrow (NZT).
Patel's order prompted an immediate rush by music-hungry Napster users to the company's website seeking to download songs before the deadline.
"I've never seen so many people on it like this," said Cary Miller, a TV executive and Napster user who signed on to the service after news of Patel's ruling.
"About three-quarters of a million songs are being listed on this one server alone and they have multiple servers. And it's only going to get worse before the injunction," he said.
As the feverish downloading gained pace at the website, recording industry lawyers revelled in the victory for their giant corporate clients, who had targeted Napster as a high-tech haven for piracy and copyright infringement.
But it is far from the last word in a case that has pitted new technology against old laws and sparked fears among everyone from heavy-metal band Metallica to the most powerful US corporate directors.
"This once again establishes that the rules of the road are the same online as they are offline, and sends a strong message to others that they cannot build a business based on others' copyrighted work without permission," said Cary Sherman, a lawyer representing the RIAA.
Napster chief executive Hank Barry said his legal team - which includes top-gun lawyer David Boies, best known as the lead attorney for the Justice Department in the Microsoft case - would work around the clock ahead of the deadline. He planned to file an immediate appeal of Patel's ruling.
"The judge issued an order which basically would have the effect of shutting down Napster," Barry said in a webcast to the service's users.
"The judge's ruling essentially is that one-to-one, non-commercial file-sharing violates the law," he said. "We'll fight this in a variety of ways to keep the Napster community going and strong."
Napster allows fans to swap songs free of charge by trading MP3 files, a compression format that turns music on compact discs into small computer files that can be easily sent back and forth over the internet.
The software was created by Shawn Fanning, a 19-year-old former Northeastern University student. He dubbed it Napster because it was his own college nickname.
He owns less than 10 per cent of Napster's stock and has no senior-management position in the firm. Larger chunks of stock are held by investors including Shawn's uncle John Fanning.
Napster has become one of the most prominent of a number of new, internet-based services that are challenging old concepts of copyrighted material and consumer sales.
Its users say they are not violating copyrights because they are sharing music for non-commercial or "fair" use, citing the Audio Home Recording Act of 1992.
However, the RIAA, which represents companies such Seagram, Universal Music, Bertelsmann, BMG and Sony, contends that no court has ever held that wholesale copying and distribution of copyrighted works could be considered "fair use."
Patel, in her ruling, appeared to agree, saying it was hard to envisage applying the "fair use" principle to a worldwide service of about 20 million users such as Napster.
"Computers are not within the meaning of the statute," Patel said, adding that since Napster came up with the file-sharing software, it was up to the company to work out a way to make it compliant with copyright law.
"They created the monster," Patel said.
Both sides must gird for the next step in the battle, a full trial over the future of music and copyright law.
Many industry analysts expect the legal pressure to boost efforts on both sides to reach a compromise that will extend copyright protection to music distributed over the internet.
"This is an important win for artists, too, because whether they distribute their music through big labels, small independent labels or on their own, the court has made clear that they have the right to protect their works," Sherman said.
"Whether they choose to do so is up to them. But the choice is theirs to make."