NAPSTER RULING SPARKS CONTROVERSY

RANDY WEDDINGTON

SAN FRANCISCO -- Napster, the controversial free on-line file-sharing service, received another setback here in a Feb. 12 ruling by the U. S. Court of Appeals for the Ninth Circuit. This ruling affirms most of the decisions reached by Judge Marilyn Patel, who handed down the U. S. District Court injunction in A&M Inc. v. Napster here last July.

The three-judge panel agreed, in a 58-page ruling drafted by Judge Robert R. Beezer, that the Redwood City, Calif.-based Napster will be liable for copyright infringement if it fails to remove copyright-protected songs from its search index after being notified by record companies, music publishers or artists.

Reactions to the new decision followed swiftly, with predictable praise from the recording industry and protest from consumer advocates.

At a Washington press conference, Hilary Rosen, chief executive officer of the Recording Industry Association of America, was reported as saying that "Napster has an interesting technology but the business model is a violation of our intellectual property."

In contrast, Gary Shapiro, president and chief executive officer of the Arlington, Va.-based Consumer Electronics Association, said in a statement that "we are greatly disappointed with this ruling. We believe that the Court of Appeals has ignored basic principles of copyright infringement and fair use established in the U.S. Supreme Court's Betamax decision."

Shapiro elaborated upon his argument. "The Ninth Circuit is the same circuit that ruled in 1981 that the VCR was illegal before the ruling was overturned by the Supreme Court. If that decision had stood, we would have no VCR or movie rentals -- to the detriment of Hollywood and American consumers."

Napster Chief Executive Officer Hank Barry, meanwhile, also voiced disappointment in his statement. "While we respect the court's decision," he said, "we believe, contrary to the court's ruling today, that Napster users are not copyright infringers and we will pursue every legal avenue to keep Napster operating."