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Napster adds legal muscle
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June 16, 2000: 5:22 p.m. ET
Embattled music swap software maker hires firm of David Boies
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NEW YORK (CNNfn) - Strengthening its legal muscle ahead of a battle with the recording industry, music swapping software maker Napster on Friday added the heavyweight New York law firm of Boies Schiller & Flexner.
The firm will fly to the aid of San Mateo, Calif.-based Napster as it prepares for a July 26 hearing in federal court in San Francisco, part of its fight with the Recording Industry Association of America, which says Napster has infringed upon copyrights. The firm is headed by David Boies, who is fresh from the Microsoft trial, where he served as the special counsel to the Justice Department.
 Napster's software lets Web users share music recordings, many of which are illegally copied. The RIAA, which represents all the big record conglomerates, sued Napster in December seeking an injunction against the service and damages, claiming thousands of songs have been pirated through Napster's system.
In turn, Napster argues that its service, which helps a user access music files in the MP3 format from the hard drive of any user registered in the Napster system, is legal since it does not directly provide the copyrighted music.
The case could determine the future of the nine-month-old company - which is still chewing over its official business strategy - and set a benchmark for the legalities of distributing music and other copyrighted content over the Internet.
"This case raises important questions of how the copyright laws are to be applied to this new medium," said Boies, whose New York-based firm also counts as clients CBS and the New York Yankees, and is working on designer Calvin Klein's trademark violation suit against clothing maker Warnaco.
"It also raises important questions as to the extent to which Internet directories will remain free to permit individual users to use a directory to communicate and, in some cases, to share files without monitoring and regulating what those users do," he said.
'Serious and irreparable harm,' RIAA says
On Monday, RIAA and the National Music Publishers Association (NMPA) filed a motion for a preliminary injunction in the U.S. District Court in San Francisco.
In its filing, RIAA charges Napster "causes serious and irreparable harm by unlawfully making possible, facilitating and encouraging the massive, continuing infringements of the sound recording ... copyrights" that belong to RIAA's members. Time Warner, the parent of CNNfn.com, is an RIAA member.
Hilary Rosen, president and CEO of the RIAA, told CNNfn earlier this week that there's been little communication between the two combatants.
"To date, they really haven't done anything," she said. "I've heard them say publicly that they're trying to work with the recording industry (but it appears) they intend to fight this in court and try and get away with not compensating the creative community."
RIAA's filing was accompanied by declaration of support from entertainment industry luminaries from Jack Valenti, chairman of the Motion Picture Association of America, to Michael Robertson, chairman of MP3.com (MPPP: Research, Estimates) -- until recently, another Web music outfit in the RIAA's crosshairs.
RIAA slowing adoption of new technology - Napster
Napster's new chief executive Hank Barry quickly rebuked the charges, suggesting that the industry is simply fighting the inevitable next wave of music distribution and consumer access to entertainment.
"Every time an innovation has made it easier for people to enjoy music more conveniently and less expensively, the music industry has complained and tried to slow the adoption of the technology," he wrote. "And every time, the music industry has nonetheless benefited."
"This case is about whether it is legal to share mp3 versions of sound recordings over the Internet," he added. "We say yes - the major labels say no."
Each of the players produced statistics that they say bear out their claim of the harm - or benefits - that online music brings to the music business.
In its brief earlier this week, RIAA cited a study by Field Research Corp. of Web-surfing college students, which showed a direct correlation between Napster use and decreased CD sales.
However, a study by the Digital Media Association released this week stated that 59 percent of people who download or stream music over the Internet said the activity has led them to later purchase music. 
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