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"Don't think that the fact that you're shrouded in some mysterious joint venture gets you out of the pickle. This could have the effect of stopping everything and having massive discovery."
——Federal Judge Marilyn Hall Patel

JUDGE PATEL RAISES ANTITRUST QUESTIONS IN NAPSTER CASE

No Summary Judgment, But Patel Thinks Major Labels Joint Venture Behavior "Smells Bad"

A summary judgment in the Napster case would, of course, mean that the seemingly endless litigation would be nearing its end. A summary judgment would also leave only the discussion of the amount of damages and the nature of an injunction left to decide—a potential knockout blow to Napster.

A summary judgment is also apparently far too anticlimactic an ending for this story.

On Wednesday (10/10), Federal Judge Marilyn Hall Patel deferred a decision on a request by lawyers for the Recording Industry Association of America for a summary judgment in its long-running copyright infringement suit against Napster.

But the most interesting wrinkle in this otherwise threadbare story was Judge Patel’s piqued interest at the major labels’ potential antitrust activities, especially relating to the forthcoming MusicNet and Pressplay joint ventures.

"I'm really confused as to why the plaintiffs came upon this way of getting together in a joint venture," Patel said. "Even if it passes antitrust analysis, it looks bad, sounds bad, smells bad."

Napster lawyers planted the seed in Patel’s head. According to CNET News.com, Napster’s argument centered on a deal the company made earlier this year to carry MusicNet songs in its forthcoming sub service. That agreement carried an exclusivity provision that barred Napster from immediately signing a similar deal with Pressplay, a practice which Napster attorney Celia Goldwag Barenholtz equated with misuse of copyright.

"What you have here is an attempt [to use copyrights] to control Napster's ability to enter into an agreement with anyone else," Barenholtz said.

RIAA lawyers countered that Napster’s deal was with MusicNet and not the labels themselves.

"Judge Patel took seriously Napster's argument that summary judgment is premature when the record labels haven't provided any conclusive evidence that they actually own the works that they claim were infringed," said Napster attorney Jonathan Schwartz. "And, moreover, when there is uncontradicted and unrebutted evidence in the record that the labels have engaged in classic anti-competitive behavior."

But, according to CNET, Patel made it clear she may open the case to look at whether the record companies are using Pressplay and MusicNet to control the competition.

"Don't think that the fact that you're shrouded in some mysterious joint venture gets you out of the pickle," she told record industry lawyers. "This could have the effect of stopping everything and having massive discovery." Discovery is a legal term for the process of requesting documents and investigating each side's claims.

Despite these apparent victories for Napster in the case, Patel still didn’t sway in her skepticism of Napster’s legal arguments. Patel also considered appointing a "special master" in the case that could investigate the record industry's claims to owning copyrighted songs under a "work-for-hire" rule.

If that were to happen, don’t expect the trial to come to a clean and tidy close any time soon.

RIAA Senior VP/Legal Affairs Matt Oppenheim was still upbeat about the proceedings. "She took it [summary judgment] under consideration," said Oppenheim. "Napster threw a lot of issues on the wall. Patel was interested in a few of them, but at the end of the day, there is no question that liability is going to be found and damages will be assessed."

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