Bertelsmann says to press on with new Napster model
REUTERS
February 12, 2001
FRANKFURT – German media giant Bertelsmann vowed on Monday to push ahead with the development of a viable model for its partner Napster after a U.S. appeals court ordered a modified injunction against the online song-swap company.
The 9th Circuit Court of Appeals in San Francisco said an injunction against Napster was "not only warranted but required." The court stopped short, however, of shutting down the service immediately.
Bertelsmann (BTGGga.F) said it would press ahead with its "win-win" strategy, which is aimed at keeping Napster's popular service alive while making sure that artists, copyright holders and the music industry are paid.
"File sharing is here to stay, and we will continue working to build a membership-based Napster service that will be supported by the music industry," Bertelsmann e-commerce Group Chief Executive Andreas Schmidt said in a statement.
Napster's service, developed by a 19-year-old college dropout, lets users swap recorded music for free over the Internet by trading MP3 files, a compression format that turns music on compact disc into small computer files.
The world's five biggest record labels – Universal Music (EAUG.PA), Sony Music (6758.T), Warner Music (AOL.N), EMI Group Plc (EMI.L) and Bertelsmann – are suing Napster, calling its service a haven for piracy that would cost them billions of dollars in lost music sales.
But Bertelsmann has agreed to drop its lawsuit against Napster once its business model for the service is implemented and is urging the other record giants to drop their lawsuits and agree to the model as well.
The appeals court directed U.S. District Court Judge Marilyn Patel to modify her original sweeping order issued in July, which would have effectively put the service out of business.
The three judge panel said Napster may be liable for contributory copyright infringement to the extent that it knew of specific material on its system and failed to act to prevent its distribution. |
