Napster Dealt Fatal Blow?

In what is a major — even fatal, perhaps — legal blow, Napster Inc. must stop allowing the millions of music fans who use its Internet-based service to share copyrighted material, according to a ruling handed down Monday by a San Francisco federal appeals court. “This is a clear victory,” Hilary Rosen, president and CEO of the Recording Industry Association of America, told reporters. “The court of appeals found that the injunction is not only warranted, but required. And it ruled in our favor on every legal issue presented.” Napster officials are due to comment on the ruling, which they had earlier said could jeopardize the company’s very existence, later on Monday. In its 58-page ruling, the appeals court said it was apparent that “Napster has knowledge, both actual and constructive, of direct infringement.” In its own defense, Napster had argued that it could not be held responsible if its reputed 50 million subscribers used copyrighted material. The decision on Monday comes more than four months after an Oct. 2 hearing in which recording industry giants (including BMG, Warner, Universal, EMI and Sony) had demanded that Napster, which was created in 1999 by former Northeastern University student Shawn Fanning, now 20, be ordered to stop enabling users to swap songs for free.

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