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Thursday, 11 October, 2001, 07:24 GMT 08:24 UK
Napster wins reprieve
Napster's website AP
The reprieve for Napster may be only temporary
Online music-swapping service Napster has won a breathing space in its long-running battle with US record companies.

A San Francisco court ruled that a summary judgment, bringing the two-year-old copyright case to a rapid end, would be premature.

This spares Napster at least temporarily from what is likely to be a multi-million-dollar bill for unpaid royalties.

The music industry argued that Napster's online technology facilitated wholesale copyright infringement.

But Judge Marilyn Hall Patel decided that there was not yet enough evidence to justify the summary judgement.

'Looks bad'

Judge Patel also heavily criticised some of the record companies behind the lawsuit, saying they could abuse their positions of dominance with their own planned music download services.

One of the services, MusicNet, had hallmarks of an anti-competitive business enterprise that "looks bad, sounds bad and smells bad," she said.

Napster complains that record companies have
Napster complains that record companies have "dirty hands"
Because the major labels were working together in forming MusicNet and Pressplay, they could set price controls to limit the marketplace.

This would give Napster little option but to sign deals with them when it relaunched as a legitimate service, Napster's lawyer Celia Barenholtz said.

Napster is hoping that the argument could provide a defence and let them escape prosecution. The recording giants say such arguments amount to little more than playing for time.

"The tactic Napster has taken is to throw everything up against the wall in order to stall a summary judgement," said Russell Frackman, a lawyer for the record labels.

But copyright ownership and the way recording contracts work are factors that will be looked at more closely as the case moves ahead.

'Market manipulation'

The judge ordered the two sides to appoint a "special master" to work through documents detailing artists' and record labels' rights over songs.

Ms Barenholtz said record companies had a "long history" of copyright abuse, price-fixing and market manipulation.

"If it comes down to a way of measuring dirty hands, we have a right to discovery to see how dirty their hands are," she said.

Napster's service has been idle since July. The firm is planning to launch a new, legal version before the end of the year that will charge users for access to music files.

Deals

Before it shut down it had become one of the most popular sites on the internet, by offering copied songs for free - meaning users did not pay record companies or artists royalties for the music.

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, the service planned by AOL Time Warner, Bertelsmann, EMI and RealNetworks.

The Recording Industry Association of America's (RIAA) lawsuit was first filed in December 1999 and is backed by AOL Time Warner, Bertelsmann, EMI, Vivendi Universal and Sony.

See also:

10 Oct 01 | Business
Napster 'successors' emerge
10 Oct 01 | New Media
Crunch day for Napster
30 Apr 01 | Business
Online music bonanza
12 Jun 01 | Business
EU opens online music probe
06 Jun 01 | Business
Victory for music giants?
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