NEW YORK (CNNfn) - The swapping of music files over the Internet suffered a setback Wednesday when a judge issued a preliminary injunction against upstart service Napster.|
In a ruling in U.S. District Court in San Francisco, Judge Marilyn Hall Patel ordered Napster to stop distributing copyrighted songs, saying Napster "is enjoined from causing, assisting, facilitating, copying, or otherwise distributing all copyrighted songs or musical compositions."
The injunction takes effect at midnight Friday. Napster attorney David Boise said the company will appeal the ruling and ask that the injunction be delayed.
Patel handed down the injunction in a hearing pitting the Recording Industry Association of America (RIAA), representing all the big record labels, against Napster, an upstart company with no revenue accused of being a haven for piracy and copyright infringement.
The case will go to trial later this year. To protect Napster against financial losses while awaiting trial, the big record labels must post a $5 million bond Friday before the injunction takes effect.
Napster will be still be allowed to facilitate the sharing of music files whose digital distribution has been approved.
The injunction puts a stop to what Patel called "wholesale infringing." The judge said that 70 million people are expected to be using Napster by the end of the year and "what lures them is the infringing use."
In a two and a half hour hearing, the judge asked Napster's Boise, isn't copying and distributing "the guts of what Napster is all about?" adding that "piracy was up in their minds."
As to Napster's contention that it did not know piracy was taking place, a visibly upset Patel replied, "If you design a site designed to enable infringement, you can't stand by and claim you don't know what's going on."
Napster planned to Webcast a reaction to the ruling late Wednesday.
The RIAA, which represents the major recording companies, sued Napster in December, charging that the 10-month-old service fosters an environment for copyright infringement, and asking that the courts shut Napster down.
San Mateo, Calif.-based Napster allows its more than 20 million users to see music files that other users have stored in their computers. Using the software, users can search and download songs from other people's computers. Artists, labels or publishers have not licensed the vast majority of those songs.
Napster says its users are not violating copyrights because they are sharing music for noncommercial use, citing the Audio Home Recording Act (AHRA) of 1992.
It is the first major legal clash over copyrights and the Internet and is likely to have extensive repercussions both for the music and film industries that distribute and sell motion pictures and recordings and for high-tech start-ups seeking new ways to deliver entertainment to consumers.
-- from staff and wire reports