RIAA vs. NAPSTER: THRUST & PARRY

The RIAA and the National Music Publishers Association filed a motion for a preliminary injunction against Napster.

The trade association, on behalf of the majors, a string of indie record labels and some individual artists, are suing Napster, alleging it is contributing to massive copyright infringement.

The RIAA already won one partial victory in the suit when Federal Judge Marilyn Hall Patel rejected Napster's first attempt to have the case dismissed. Now the industry is asking the judge for a preliminary injunction against the company, aiming to stop a huge amount of recorded material from being swapped through Napster while the suit goes to trial.

Included in its request, the RIAA has provided statistics on how much material on Napster it believes is breaking copyright law. It's also bolstering its case with declarations of support from a long list of industry figures, including the labels' new best buddy, MP3.com CEO michael robertson',390,400);">michael robertson',390,400);">Michael Robertson, along with Motion Picture Association of America President Jack Valenti and Emusic.com Chairman Robert Kohn.

"This is not just about online vs. offline," said hilary rosen',390,400);">hilary rosen',390,400);">Hilary Rosen, President and CEO of the RIAA. "Most in the online business community recognize that what Napster is doing threatens legitimate e-commerce models and is legally and morally wrong."

The RIAA said it had hired the California-based Field Institute polling firm to talk to students and determine what effect Napster had on music sales.

In their motion, plaintiffs presented evidence demonstrating ongoing harm to CD sales, harm to the emerging legitimate market for downloading music and a devaluing of music.

According to that study, "essentially every single Napster user sampled was engaged in some copyright infringement," the industry said in a statement. The study also claimed that 87% or more of songs actually copied and downloaded on Napster were copyrighted.

"[Nearly half] of Napster users…described the nature of its impact on their music purchases in a way which either explicitly indicated or suggested that Napster displaces CD sales," said the study. "The more songs Napster users have downloaded, the more apt they are to say explicitly or suggest that Napster has reduced their music purchases."

Napster will fight the preliminary injunction motion in court, even though it is attempting to reach a more amicable settlement, its executives said.

Less than 24 hours after the RIAA filed its brief, Napster has fired back against the recording industry via a tersely worded statement to the press.

Newly named Napster CEO Hank Barry, of venture-capital firm Hummer Winblad, tried to counter some of the arguments the RIAA made in its lawsuit. While the recording industry trade group contends that the software service has become a tool for widespread music piracy that needs to be closed immediately, Barry contends: "This case is about whether it is legal to share MP3 versions of sound recordings over the Internet. We say yes—the major labels say no."

Barry attempted to dismantle the RIAA's argument, point by point. He said that increased record sales—including an 8% rise in the most recent first quarter—proved that Napster has not affected record sales. He said that 95% of all Napster files that are downloaded are quickly erased.

Whereas the RIAA said that the Field Research survey showed a correlation between the increased use of Napster and declining CD sales at stores near colleges, Barry insisted the study really proved that Napster was a promotional tool. "Napster is a sampling and listening experience, not a permanent copying experience that would displace conventional CD sales," he said. "Napster has been and will be very, very good for music—and for music sales."

Barry also objected to the RIAA's characterization of Napster as an inherently evil tool; it simply represents the future, he said. "File-sharing technology is here to stay. It does not threaten copyright any more than any of the other technologies that have been developed in the past," he said.

"The record companies are trying to shut down Napster—an entirely legal system of file sharing that reflects the heart and soul of the Internet," Barry said. "We'd like to work with them on a solution, but we'll win this case in court."

The injunction, if granted, would last only until the case comes to trial.

MP3.com's Robertson submitted a declaration in support of the motion stating that file-sharing services like Napster do nothing to promote emerging artists and that MP3.com has not authorized Napster to distribute the music of MP3.com artists. "In my view, Napster is not designed to promote or share the music of unknown or lesser-known artists," he said. "The only way to find a song on Napster is to enter the name of the song and/or artist that the user wants to find."

According to EMusic's Kohn, "The entire purpose of the Napster service is clearly to facilitate the copying and mass distribution of MP3 music files without any regard for those who hold the copyrights to the recordings."

On July 3, Napster will formally respond to the RIAA's call for an injunction in a legal brief. On July 13, the RIAA files a final response. On July 26, Judge Patel will rule on the preliminary injunction that would temporarily disable the Web site even before she rules on the underlying issues in the case later this year.