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The judge presiding over Napster’s copyright infringement lawsuit has appointed a retired federal judge to help the beleaguered startup reach a settlement with the recording industry out of court, two people close to the case have confirmed. U.S. District Judge Marilyn Hall Patel tapped Eugene Lynch, who sat on the federal bench in San Francisco for 15 years, to mediate the high-profile dispute. In 1997 Lynch retired to take a job as a mediator with Irvine, Calif.-based JAMS. Last week a San Francisco appeals court ruled that Napster knowingly infringes the rights of record labels by providing a service that enables millions of subscribers to trade copyrighted songs. The three-judge panel from the 9th Circuit U.S. Court of Appeals said an injunction requiring Napster to curb piracy on its service was required, but left it up to Patel to draft the order. The decision was a major victory for the record labels, which have declared all-out war against Napster. Lynch’s appointment as a mediator was made in December and was unconnected to last week’s decision, one person close to the case said. Redwood City, Calif.-based Napster has been desperately trying to persuade major record labels to drop their lawsuit and help the music service develop a fee-based business model that gives copyright holders a cut of the revenue. So far, only one major plaintiff, BMG, a unit of Germany’s Bertelsmann media group, has agreed. In October, the German media conglomerate pledged an undisclosed sum of money to help Napster build technology that blocks unauthorized songs on the service and promised BMG would drop its lawsuit if the project was completed. On Friday the partners said Bertelsmann subsidiary Digital World Services was helping to develop the technology to make the new model possible. So far, Napster and the remaining four major labels have been unable to settle their differences. Executives at the Recording Industry Association of America, a lead plaintiff in the case, say that Napster has yet to provide enough specific information for them to sign on. Lynch’s reputation for no-nonsense negotiations may be able to help. Since retiring, he has overseen settlements in numerous complex lawsuits, including a high-profile battle between University of California and Genentech (DNA) over lucrative patent rights to the human growth hormone. In 1999, Genentech agreed to pay the university $200 million to settle the case, a record amount in a patent case. “I have the image of him rolling up his sleeves and getting into a case to understand the parties’ concerns,” said Gerald Dodson, an attorney at Morrison & Foerster who represented the university in the case. It is not unusual for judges to appoint mediators in hopes that parties can settle their differences out of court. U.S. District Judge Thomas Penfield Jackson, for instance, appointed a federal appeals court to try to hammer out a settlement between Microsoft and the Department of Justice, but that effort ultimately failed. Lynch’s appointment in the Napster case suggests that Patel believes the parties may be nudged toward making peace despite their public war of words. Neither the RIAA nor Napster would comment on the appointment, which was first reported by Newsweek. The magazine said the parties have held at least one session already with the retired judge and planned to meet again this week. Lynch was not immediately available for comment. Copyright (c)2001 The Industry Standard

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