No ‘Safe Harbor’ for Napster

A federal judge has refused to dismiss the copyright lawsuit brought by the Recording Industry Association of America (RIAA)against Napster, rejecting the online file swapping company’s argument that its service is legal.

The RIAA sued Napster in December 1999, alleging that the company violates copyright law when its users share music online without authorization. The San Mateo, California-based company is also being sued by rapper Dr. Dre and hard rock band Metallica.

Not in Safe Harbor

Napster moved for dismissal of the suit, claiming that its service falls within the “safe harbor” provision of the Digital Millennium Copyright Act, which protects information service providers who are mere conduits of network transmissions.

U.S. District Judge Marilyn Hall Patel refused to grant Napster’s request to dismiss the lawsuit, saying that Napster’s service does not fall within the safe harbor exception.

Hillary Rosen, President and CEO of the RIAA, said, “This hearing was Napster’s attempt to escape responsibility for aiding and abetting wide-scale piracy and — not surprisingly — they lost.”

Copyright Victories Mount

Earlier this year, a German judge found that AOL Germany violated copyright law when its users swapped pirated digital music files.

In late April, a U.S. District Court in New York entered a summary judgment against MP3.com for copyright infringement. The next phase in that case — also brought by the RIAA — is court consideration of remedies that may include shutting down the service and monetary damages.

Users Favor Free Downloads

Although the courts have been siding with the music industry, the court of public opinion favors free downloads. According to a recent survey, “The e-Merging Music II,” by Greenfield Online, 66 percent of online music shoppers expect free digital downloads and an equal percentage have already downloaded free music.

The survey showed that nearly 80 percent of the 5,200 online music shoppers queried would favor the merchant — either offline or online — with the lowest price. In fact, more than half of the survey respondents (55 percent) shopped for music online and then made their purchases offline.

The shoppers surveyed were not willing to spend money for added features. One third of the respondents said that the ability to share music with friends and music portability are important, but they would not be willing to pay extra for those features.

However, more than 25 percent of online music shoppers would pay extra for the ability to create custom mixes.