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To: Randy Ellingson who wrote (102090)	4/28/2000 2:13:00 PM
From: H James Morris	Respond to of 164687

Randy, The judge ruled against MP3. The big guys always win.:-( > New York, April 28 (Bloomberg) -- MP3.com shares fell nearly 41 percent today after a federal judge declared that the company, which distributes music free over the Internet, is infringing record company copyrights. The stock declined by 4 3/4 to 6 7/8 in early afternoon trading. The nation's top record labels, including Warner Bros. Records, Sony Music Entertainment Inc., and Arista Records Inc. have sued MP3.com for making copyrighted recordings available at no charge via the Internet. In a three-sentence ruling, U.S. District Judge Jed Rakoff said, ``Plaintiffs' motion for partial summary judgment, holding defendant liable for copyright infringement, is hereby granted.'' Rakoff will hold hearings to determine whether San Diego- based MP3.com must pay damages and discontinue its practice of putting copyrighted music out over the Internet. The record labels claim that MP3.com is infringing their copyrights on as many as 450,000 songs by distributing, or ``streaming,'' music over the Internet. Damages The suit seeks billions of dollars in damages and an order stopping MP3.com from transmitting copyrighted music over the Internet. Michael Carlinsky, a lawyer for MP3.com, said the impact of the decision was unclear. He said MP3.com would appeal the ruling and would fight vigorously to oppose an injunction or damages. ``You have to view this in context. It's just round one,'' he said. ``Any time you're a pioneer in the industry, you expect there to be certain bumps in the way.'' But Katherine Forrest, a lawyer for the record labels, called the ruling a victory. ``The judge has determined liability. It's a straightforward copyright infringement.'' Rakoff did not explain the basis for his ruling and said he expected to issue a written opinion within two weeks. Lawyers are scheduled to telephone him this afternoon to set a schedule for further proceedings. MP3.com has stored in its computers digitalized versions of more than 80,000 compact discs. The company allows subscribers to download onto any computer, music that MP3.com has stored -- provided they can show they already own a particular CD, in effect rendering their personal music libraries portable. Subscribers verify they own a CD by putting it into a computer and allowing MP3.com to scan it. Massive Jukebox MP3.com likens itself to a massive ``jukebox in the sky.'' The company says it transmits music in such a way that listeners cannot copy the songs. But record company lawyers say MP3.com is engaged in blatant and illegal copying. ``They are taking a CD, putting it as fast as they can into computers, copying every note of a CD, and putting it into an MP3 file,'' Peter Bleakley, a lawyer for the Recording Industry Association of America, argued in court two weeks ago. ``From there, they're distributing.'' Complicating matters, the record companies were sued earlier this month by musicians who claim the labels do not own the rights to distribute songs over the Internet. The artists say they retain Internet distribution rights and want royalty payments. The MP3.com suit is unrelated to a separate case by the record industry against Napster Inc., which is pending in San Francisco. Napster essentially gives computer users broad access to digitalized music files on other computers. Critics say Napster has created on the Internet a vast flea market in which CD owners are freely swapping music with one another. Apr/28/2000 13:31