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The next courtroom battle in the Napster copyright case will likely focus on an aggressive attempt by the recording industry to shape a U.S. District Court judge’s injunction against the music-swapping service. U.S. District Chief Judge Marilyn Hall Patel has scheduled March 2 to hear oral arguments on a modified preliminary injunction against Napster Inc. Recording industry lawyers last week filed a proposal asking Patel to set rigorous standards to prevent copyrighted music from being downloaded from the site. The recording industry proposal was filed on Feb. 15, just three days after the 9th U.S. Circuit Court of Appeals ordered Patel to revise an injunction against Napster that she issued in July. The filing was immediately followed by a request from Napster for the hearing with Patel. The hearing request should probably come as little surprise. Patel has issued a resounding endorsement of most of the previous arguments made by the record labels and music composers. And a proposed injunction crafted by them could hold great sway with her. But Napster is likely to try to persuade Patel that the recording industry’s proposal is still too broad. “It’s inconsistent with the 9th Circuit’s decision and ignores language that plaintiffs must identify copyrighted work and files on the Napster service and that Napster should be required to police within the limit of its system,” said Napster attorney Laurence Pulgram, a partner at Fenwick & West. “Napster cannot prevent the transfer of particular content merely because the nature of the content is identified.” The hearing comes as talk of settlement has heated up, especially from Napster. But given the recording industry’s recent courtroom successes, a settlement appears unlikely. The industry’s latest victory came when a three-judge panel concurred with Patel that Napster is likely to be found liable for contributory and vicarious copyright infringement. The panel, however, said her injunction was overly broad. In drafting its proposed modified injunction, the record labels and music composers “tried to follow the language and direction of the Court of Appeals,” said recording industry attorney Russell Frackman, a partner with Los Angeles-based Mitchell, Silberberg & Knupp. In A&M Records Inc. v. Napster Inc., 00-16401, the 9th Circuit said plaintiffs have the burden to inform Napster that copyrighted works are available through its system and that Napster also has a responsibility to police its system. The recording industry’s proposed injunction addresses both points. It would prohibit Napster from allowing access to any musical composition or sound recording that plaintiffs previously identified as well as any works owned by plaintiffs that are protected by federal or state law. Under the proposed injunction Napster would also be required to review Billboard magazine’s list of top 100 singles and top 200 albums to ensure that protected works are not available through its music-swapping system. The recording industry also proposes that Napster “employ such measures and technology as are reasonably available to affirmatively patrol its system”; use its search function to identify protected works and bar users from exchanging them; and maintain a complete list of all musical compositions and sound recordings made available over its system. Patel had hoped to get the parties to settle the case out of court. In January, she appointed retired federal Judge Eugene Lynch to mediate the case. The recording industry, however, maintains that mediation should solely address the issue of damages and that any licensing agreement must be worked out between the labels, an individual involved with the proceedings said. Napster is eager to settle the matter. “We requested a mediator from Patel for months and months,” said Pulgram. “[Our] objective was to mediate the entire controversy.” Thus far, Napster has worked out a deal with only one of five major labels. And its proposal, announced Tuesday, to pay $1 billion in licensing fees over five years to the five major record labels, songwriters and independent labels and artists, received a chilly reception from the music industry. “This is really media grandstanding,” said Jeffrey Knowles, a partner at Coblentz, Patch, Duffy & Bass, who represents music publishers in the suit. “I think [the $1 billion offer] is a desperation move myself.” Napster offered to pay major labels $150 million per year; independent labels and artists would split $50 million annually. To help pay licensing fees, Napster said it would begin charging consumers in the neighborhood of $2.95 to $4.95 per month for limited downloads and $5.95 to $9.95 per month for unlimited file transfers. If the case is ultimately resolved out of court, questions will remain as to the scope of copyright law on the Internet. Perhaps the key question is whether safe harbor provisions of the federal Digital Millennium Copyright Act can be used as a defense against copyright infringement online. “The DMCA issue hasn’t been decided by anyone,” Fenwick’s Pulgram said. “Patel said it didn’t apply and the 9th Circuit said her reasoning was not complete.” Michael Rhodes, a partner in Cooley Godward’s San Diego office who represented MP3.com in a similar dispute with the recording industry, said cases will continue to come along. “There is no way it’s over,” he said. “How can we predict the next business model?” But he said cases like Napster and MP3.com are beginning to weave the fabric of Internet law. Frackman said the 9th Circuit’s opinion has wide application to the protection of all intellectual property over the Internet. “The basic issues of contributory infringement and vicarious liability over the Internet are decided by this opinion,” he said.
Copyright Law in the New Millennium. March 20-April 2.

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