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In musical terms, if the founders of Napster Inc. are punk rock, 40-year-old Jonathan Schwartz is classical music. He’s got a legal pedigree that’s Establishment with a capital “E”: a degree from Stanford Law School, a clerkship with Thurgood Marshall and stints as a federal prosecutor and chief adviser to Attorney General Janet Reno. With that kind of r�sum�, Schwartz would seem a strange fit at Napster. The brainchild of a college kid, Redwood City, Calif.-based Napster has spent two years in mortal combat with the recording industry over its online music-swapping service. But Schwartz’s air of respectability was just what Napster was looking for when it hired him six months ago as the company’s first general counsel. The reason? Simple survival. Napster needs to make amends with its nemesis, the recording industry, if it wants to settle its legal problems and get access to music from major labels. Without that access, the company won’t have much music for fans to download. “We’ve had conversations with Napster and continue to in large part because Schwartz is there,” said Paul Cappuccio, general counsel of AOL Time Warner Inc., which owns one of the major record labels suing Napster. “If Napster’s former executives had called up and said ‘we want to get a license’ I would have said ‘that’s nice, but I know where you stand.’” But dialogue alone won’t save Napster. Schwartz has to engineer a settlement that will appease the recording industry without bankrupting the company. A settlement must also allow a business model that doesn’t alter that which made the Web site so popular with fans: easy access to almost every kind of music imaginable. So far, Schwartz has turned down the volume of the legal battle. Media magnet David Boies has faded from the scene as the company’s lead outside counsel. In his stead Schwartz brought in two former attorneys from the U.S. Attorney’s Office in Manhattan to take the lead in federal court arguments and a veteran Department of Justice attorney to head up appeals to the 9th U.S. Circuit Court of Appeals. Schwartz also played a major role in shutting down the company’s music-swapping service in July in order to work out kinks in the system for filtering copyrighted songs. While the 9th Circuit stayed a district court order that would have kept Napster off-line indefinitely, Schwartz — along with Napster CEO Konrad Hilbers and others — decided to keep the service down. “We hoped, in part, to begin to bridge the credibility gap that had developed between Napster and the major record labels and music publishers, and to create the right atmosphere for constructive settlement negotiations,” Schwartz said. That strategy has paid off. In September the company reached a tentative agreement with songwriters and music publishers to settle their copyright infringement suit against Napster. And a month later the record labels for the first time began discussing settlement terms with Napster. Cappuccio, who has been friends with Schwartz since the two clerked together at the U.S. Supreme Court, said that in order to settle with the labels Napster has to do three things: pay for past infringement, obtain a license from the labels and implement a system that protects copyrights. “I have doubts about whether Napster can come up with a lawful business model that will work,” Cappuccio said. But, he added, “if Napster gets out of this it will be in large part because of Jon Schwartz.” FINDING A BALANCE This isn’t the first time Schwartz has been in the middle of a hot legal fracas. As a senior adviser to Reno, he helped mediate a $1 billion settlement of a suit brought by Holocaust survivors against the three largest Swiss banks. He served on the Capital Case Review Committee, which reviews federal death penalty cases and makes recommendations to the attorney general. And he was lead author on a study of racial and geographic disparities in the federal death penalty. He also was the department’s principal liaison with the Office of the Independent Counsel during its investigation of President Clinton’s affair with Monica Lewinsky. Schwartz has kept a toe in the political waters, recently writing a commentary in the Los Angeles Times in response to congressional hearings on Attorney General John Ashcroft’s response to the terrorist attacks. Schwartz advises Congress to press Ashcroft to form a separate national security division within the department, an idea he worked on while at the DOJ. Schwartz’s manner in handling such contentious issues has won him high praise from his adversaries. “Even when you are disagreeing with him — as I did and as I imagine Ken Starr did during the Whitewater investigation — you can always trust Jon to deal straight and fair with you,” Cappuccio said. He said that in addition to being incredibly smart and dependable, Schwartz is “more loyal than a black Labrador.” Cappuccio said that during their clerking days the two were “ideological sparring partners.” Cappuccio clerked for Supreme Court Justice Anthony Kennedy while Schwartz clerked for Justice Thurgood Marshall. Cappuccio recalled that after he injured his thumb in a skiing mishap, “Schwartz used to come to my office and while bitching at me about my cases he’d dress my wound.” Schwartz said working for Marshall had a profound impact on his understanding and appreciation of the law. “I never quite got over the thrill of working for the person most responsible for the landmark decision in Brown v. Board of Education” Schwartz said, referring to the Supreme Court ruling that outlawed public school segregation. Marshall, then the legal director of the NAACP, argued the case. “Justice Marshall taught his law clerks to examine closely the legal issues in a case, but also to ask ‘Why is this case here? What’s driving it? How will it affect people?” Schwartz said. “He was a daily inspiration.” Schwartz, who graduated first in his class from Stanford Law School, clerked for U.S. Court of Appeals for the D.C. Circuit Judge Harry Edwards prior to working for Marshall. He spent nearly two years as a litigation associate at New York’s Jones, Day, Reavis & Pogue before joining the U.S. Attorney’s Office in Manhattan. In that post he gained prominence prosecuting white-collar, tax, narcotics, organized crime and gang cases. When former Deputy Attorney General Jamie Gorelick asked her senior staff to find her one of the smartest, most able attorneys for a DOJ spot, Schwartz made the list. “Jonathan has a fantastic r�sum�, significant trial experience in the U.S. Attorney’s Office in Manhattan and a winning personality,” Gorelick said. “I hired him in a minute.” His skills, as well as his style, proved to be valuable. “He was the go-to person on the hard cases,” Gorelick said. “I routinely gave him the thorniest problems, the ones that involved the toughest legal issues and personalities.” So he was well prepared to tackle the briar patch of Napster litigation. Gorelick said she encouraged him to take the job. “He was ready to run something himself,” she said. He is “able to reach an accommodation [with the recording industry] if one is to be reached.” Despite Schwartz’s efforts, it’s uncertain whether Napster will survive. Even if the company reaches a settlement with the record labels, it will have to compete with other music subscription services that have already launched, as well as free file-swapping systems like Grokster. But Schwartz is optimistic that the company’s fans will return. “Napster’s brand name remains strong and its fans remain devoted,” he said. “I was wearing a Napster shirt on a recent business trip and people in the airport repeatedly asked me if I worked at Napster and if the service was coming back.” “I said that it was and asked if they had their credit cards ready to pay for a new subscription service. To a person, they said ‘yes.’” Even if the company doesn’t make it, Schwartz seems to enjoy adding a little rock ‘n’ roll to his resume. “Napster is an exciting, cutting-edge place,” Schwartz said.

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