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Wednesday, 10 October, 2001, 09:06 GMT 10:06 UK
Crunch day for Napster
Napster AP
Napster has weathered two years of legal action
Online music service Napster faces a crucial court decision on Wednesday.

In a San Francisco hearing, Judge Marilyn Hall Patel will decide whether the company can be held liable for copyright violations by enabling users to exchange music files on the internet.

Record industry representatives will argue that it is liable, while Napster has said that a summary judgement is inappropriate and that the case should be heard in a full trial.

Napster user BBC
At its peak Napster had 60 million users
Some music industry analysts say that Napster is no longer as significant as it was before it closed down to rebuild itself as a legal, subscription-based service.

Many users have deserted Napster for other free music services since Napster shut down in July.

And Tuesday's agreement between music publishers and record companies is likely to boost the music majors' own online music services, due to launch shortly.

Damages amount

The Recording Industry Association of America (RIAA) lawyer Russell Frackman said that the industry would be pressing for a judgement against Napster.

"We will argue in front of Judge Patel on Wednesday, seeking a summary judgment against Napster on the issue of liability, which would in essence leave for trial only the amount of damages and the nature of the injunction," he said.

The damages payable could run into millions or even billions of dollars - to which would be added fines and other costs.

A $1bn (679m) settlement offer from Napster to the record companies was dismissed as "not nearly appropriate" in February.

Napster's system has led to prolonged and complex legal arguments about the extent of its liability.

'Lost revenue'

The service did not store music files itself, but provided a directory of songs stored on music fans' hard drives around the world as well as the connection so that other fans could download them.

But the record industry said this allowed more than 60 million fans to swap songs for free, robbing them of revenue as a result.

Napster argues its users did not violate copyrights by trading songs for free because they shared files for non-commercial use.

In July, Judge Patel issued a temporary injunction ordering the service to shut down because it could not block access to all copyright material - but that decision was overturned by an appeals court.

Despite that, Napster has still not re-started its song-sharing service.

Deals struck

Napster is planning to relaunch before the end of the year as a legal service.

Earlier this year, it became affiliated with the company behind one major record label, Bertelsmann, who installed one of its employees as chief executive of Napster.

It has also struck a deal that means it will distribute music for MusicNet - an online download service planned by AOL Time Warner, Bertelsmann, EMI and RealNetworks.

The RIAA's lawsuit was first filed in December 1999 and is backed by AOL Time Warner, Bertelsmann, EMI, Vivendi Universal and Sony.

See also:

09 Oct 01 | New Media
Landmark online music deal reached
01 Oct 01 | New Media
Record labels 'fight' download plan
25 Sep 01 | Business
Napster set for comeback
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