Online music company Napster received a stay of execution yesterday as a US appeal court allowed it to continue business until a final verdict on its future had been reached.
Napster, which allows its 32m users to download music without charge is being sued for copyright infringement by the entertainment industry.
After the hearing, Hank Barry, Napster's chief executive, claimed the industry had "stonewalled" his proposals to reach a settlement.
Mr Barry said he had suggested that his company charged its millions of users a fee to download music, which would go towards compensating the recording artists.
"We're willing to pay very substantial amounts to the artists," Mr Barry said.
"With a very conservative estimate, the first-year payments to the artists would be in the neighborhood of a half a billion dollars." The federal appeals court is considering arguments in the copyright case the US music industry has brought against Napster.
The case is viewed as a landmark in the issue of copyright on the net. After hearing both sides' arguments the San Francisco court on Monday adjourned to consider a verdict. Lawyers for Napster argued that the company was no more than a service provider which could not be held responsible for the activities of its users. Crucial to Napster's case is a 1984 supreme court decision that allowed Sony to continue making video recorders capable of duplicating copyright-protected material.
But the Recording Industry Association of America argued that Napster's service was tailor-made for piracy. Yesterday there was still no sign the industry was ready to strike a deal. Some observers suggested a deal might still be made if the music companies sensed the case might turn against them. Gene Hoffman of ISP EMusic.com, was sceptical about a late deal. "The record companies do not have much of a incentive to settle when it is not proven Napster can make a dime off their customer base."
Useful links:
www.napster.com/pressroom/ legal.html Napster legal case documents
www.riaa.com/napster_legal.cfm Recording Industry Association of America case documents
