Court says injunction 'overbroad'
SAN FRANCISCO (CNN) -- A federal appeals court sent an injunction against the Internet music service Napster back to a district court Monday saying it was "overbroad."
The appeals court said a good case was presented for copyright infringement and that Napster knowingly encourages users to download material and may derive financial interest in doing that. However, the appeals court said the scope of the preliminary injunction was overbroad and is sent back to the district court.
Napster allows users to exchange high-quality music recordings, known as MP3s, between computers.
The Recording Artists Industry Association of America, which represents a host of record companies, filed a federal lawsuit against Napster just months after the popular song-swapping service launched in 1999. The lawsuit claims that Napster could rob them of billions of dollars in lost profits.
U.S. District Judge Marilyn Hall Patel granted the injunction last July, blocking Napster from allowing users to swap copyrighted material, but that decision was stayed, pending today's decision.
Napster argued the injunction could force it to shut down and cut off service to its estimated 50 million registered users.
In a hearing on the injunction last October, Russell Frackmen, an attorney for A&M; Records, one of the plaintiffs in the case, rejected that argument.
"Whether or not Napster chooses to suspend what they are doing, I think as this court has said over and over again, is not relevant even at the preliminary injunction stage. If they have created a situation where they either choose not to or cannot continue operations because of the massive infringement that is involved, then we as the copyright owners are still entitled to injunctive relief under the copyright act," Frackmen said.
He called Napster a "pirate service" that enabled users to commit copyright violations.
Napster attorney David Boies, who represented former Vice President Al Gore in the Florida election dispute and the government in its antitrust battle with Microsoft, compared the service to a VCR.
He said the 1984 U.S. Supreme Court ruling that permitted Sony to sell a device that allows people to record copyrighted television programs (Sony Corp. v. Universal City Studios, Inc., full text) also should protect Napster because there is a substantial non-infringing use.
Napster argues that it is protected under the Audio Home Recording Act, which allows people to tape musical programs in their homes for personal use.
The Justice Department disagreed in a brief filed with the court, saying the act does not protect Napster because a home computer is not a "recording device" as defined by the statute.
Since the October hearing, Napster has reached agreements with a number of record labels, including Bertelsmann AG, the parent company of BMG. It promised to drop its lawsuit against Napster and to invest in the company once it creates a service that pays artists' royalties.
Napster and Bertelsmann announced last month, plans to launch a subscription-based service.
Napster pioneered 'peer-to-peer'
Napster founder Shawn Fanning, a former Northeastern University student, invented so-called peer-to-peer software, which allows users to find and copy MP3 files stored on other users' computer hard drives.
The technology has spawned a number of similar services, including Gnutella and Freenet. Peer-to-peer services have sprung up to trade software, videos, books and even needlepoint patterns.
The Associated Press contributed to this report.
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