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Napster Inc.’s long legal battle with the recording industry is set to drag on for months. At a status conference before Chief Judge Marilyn Hall Patel of the U.S. District Court for the Northern District of California on Tuesday, it was clear that the major record labels and Napster have not made headway in settlement discussions. The two sides had scrambled to the negotiating table in January after Patel said she was going to let Napster look into whether the major record labels had violated antitrust rules in licensing rights to their music. At the request of both sides, Patel suspended the case for 30 days while they tried to work out a settlement. The labels and Napster failed to do so, and Patel issued an order last month saying Napster could continue discovery into whether the labels had misused their copyrights by imposing restrictive licensing terms. The Department of Justice launched its own investigation into the record labels’ licensing practices in 2001. At Tuesday’s hearing, the parties disagreed over what material should be made available to Napster and the timing of discovery. The record labels are submitting 600,000 to 800,000 pages of documents to the DOJ relating to their licensing agreements. Napster is to receive copies of this material as well, but Napster attorney Celia Barenholtz, a partner at New York’s Kronish Lieb Weiner & Hellman, said the company would also like any additional information that the DOJ requests. Patel said such material should be submitted to Napster as long as discovery is under way. Napster also requested documents involving settlement negotiations between any of the plaintiffs and Napster, as well as documents submitted to the DOJ regarding the labels’ negotiations with third parties. Russell Frackman, a partner with Los Angeles’ Mitchell Silberberg & Knupp who represents the record labels, said there were confidentiality concerns regarding the labels’ licenses with other parties. Patel responded that the names of the licensees could be redacted and a confidentiality order imposed on the material. Barenholtz said the licensees might be potential witnesses. But Patel said their names should be excluded, at least initially. “If Napster can show the need for identification [the court] may take it up,” Patel said. “But the license agreements may all look the same.” As to documents involving settlement negotiations between the plaintiffs and Napster, Patel said references to dollar amounts could be redacted. But Frackman objected to Napster’s request for the material. This is a situation, he said, where Napster attempted to negotiate with separate record companies “and is now asking to see the documents saying the negotiations constitute a copyright misuse.” Barenholtz countered that there may be internal documents that say something like “we only will license if Napster agrees to five non-competitive terms.” The litigation began in December 1999 when 18 record labels sued Napster for copyright infringement. In October Patel addressed the label’s motion for summary judgment on Napster’s liability for infringing 213 recordings. Current discovery revolves around that motion as well as antitrust and ownership issues raised by Napster. The labels sought to push the case forward, proposing that depositions begin in May. Patel ruled that they should begin by mid-August and be completed by the end of October. Napster’s expert is to submit a report by Nov. 15 and after additional expert depositions another hearing will be held at the end of January.

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