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Napster Case Gets Closer to Trial

June 03, 2005|Joseph Menn | Times Staff Writer

SAN FRANCISCO — A fratricidal record industry lawsuit over who bears responsibility for the mass piracy fostered by the original Napster Inc. has moved a step closer to trial.

San Francisco U.S. District Judge Marilyn Hall Patel, in a mixed ruling late Wednesday, denied a motion by Napster investors -- including media conglomerate Bertelsmann -- to either throw out the case or rule that it could be held liable only for specific songs that the other record labels could prove were downloaded.

The other labels are suing Germany's Bertelsmann, which was once the sole owner of the BMG record company, and Napster's venture capital backer, Hummer Winblad, arguing that they in effect controlled Napster and contributed to what was then the greatest theft of copyrighted material in history.

With Napster dissolved in bankruptcy and its brand sold off to the former Roxio Inc., the labels are seeking hundreds of millions of dollars from the companies that invested a combined $98 million and kept Napster operating until July 2001.

With Patel's ruling, Bertelsmann won what it said was the key argument at this stage of the case: that Napster didn't infringe on music copyrights by offering an index of song titles that were available on the computers of about 60 million Napster users.

If the labels had won on that point, it would have been easier for them to prevail. They would have had to show that Bertelsmann and Hummer Winblad were in effect running Napster through their investments and management oversight.

"We are extremely pleased with yesterday's ruling, which confirms that the simple indexing of file titles does not constitute an act of copyright infringement without evidence that actual files have been transferred," Bertelsmann attorney R. Bruce Rich said. "It's now up to the plaintiffs to establish specific instances of uploads and downloads of copyrighted musical works, a requirement we believe should significantly narrow the scope of any infringements involved."

Attorneys for the labels said the most important part of Patel's ruling was her treatment of downloading and uploading as separate improper acts.

Proving the specifics of wrongful downloading will be hard, they said. But the labels submitted to Napster hundreds of thousands of "takedown" notices citing specific works that had been uploaded and were being offered up on the service.

"Patel confirmed that evidence of uploading or downloading is sufficient to establish infringement. This will ultimately result in significant liability for Bertelsmann," said Peter LoFrumento of Universal Music.

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