Tech groups bash anti-Napster ruling

The briefs were to be filed late Friday to the 9th U.S. Circuit Court of Appeals, which is reviewing a lower court ruling that could, in effect, shut down the popular music-sharing site.

In July, the appeals court granted Napster a temporary reprieve, hours before an injunction by U.S. District Judge Marilyn Hall Patel was to have taken effect. The order ruled Napster must prohibit swapping of major label music.

The appeals court is now in the process of receiving a flurry of legal filings from both sides as well as other groups that could be affected by the case. Once that is done, it will make its final decision on whether to overturn Patel's ruling.

The trade groups filing Friday said they're not siding with Napster. Instead, they're rushing to ensure that Patel's decision doesn't adversely affect their members, either by requiring them to constantly police their systems for potential copyright violators or by preventing them from developing new products.

"We are not saying Napster should win or should lose; we're simply saying that on this issue, the wrong standard was used," said Jonathan Band, an attorney with Morrison, Foerster who's representing NetCoalition, one of the groups filing a brief.

Because the Napster case could be a precedent-setting one with wide-ranging legal implications for consumers and companies as diverse as Internet service providers and consumer electronics makers, at least three groups planned to file separate briefs.

In one of the briefs, a group of telecom and Internet trade associations, including Netcoalition.com, the Computer & Communication Industry Association, and the Ad Hoc Copyright Coalition, disputed Patel's application of a portion of the controversial Digital Millennium Copyright Act -- an entertainment industry-backed bill designed to extend copyright protections in the digital age.

Specifically, Patel ruled that "information location tools" such as Napster are violating copyright if they know or should have known infringement is taking place.

Band said Patel's reasoning could be extrapolated to mean that search engines and even companies that use hyperlinks are violating copyright if sites they link to have any infringing material in their directories.

"The district Court's erroneous construction could threaten core Internet technologies, such as hyperlinking and online directories, as well as beneficial emerging technologies such as peer-to-peer file sharing," the brief stated.

"It's too open-ended. The potential for liability is enormous," Band said. "A lot of companies use search engines."

Another brief -- this one to be filed by the Digital Media Association, or DiMA -- focuses specifically on the now-famous 1984 Betamax decision.

In that case, a judge ruled that home video recorders were not illegal because although they could be used to infringe copyrights by illegally recording movies, there also were "substantial non-infringing uses."

Napster attorneys used that argument before Judge Patel, but she looked instead at the intent of Napster founders, who said in a series of e-mails that they wanted to put traditional music companies out of business. She also said that most of Napster subscribers used the service to swap copyrighted material.

DiMA Executive Director Jonathan Potter said Patel's ruling, if it becomes precedent, could prevent the creation of any product that could be used by someone to infringe copyrights, even if its primary use is a legal one -- a product such as the home video recorder.

DiMA includes companies such as Real Networks Inc. (rnwk), America Online Inc. (aol) and Yahoo! Inc. (yhoo).

"If you apply these legal standards beyond just Napster, they inhibit our members' ability to develop products," Potter said.

And that, according to Potter, means fewer new technology products in users' hands.

The Digital Future Coalition and the Computer Electronics Association were also expected to file Friday.

Meanwhile, despite record industry predictions of doom due to Napster, CD shipments to music stores were at an all-time high for the first six months of the year, according to the RIAA.

About 420 million units were shipped, a 6 percent increase from the same period in 1999, the RIAA said. Nearly 86 percent of all music shipped to record stores was on compact discs. DVD shipments also rose by about 71 percent.

The RIAA has said that Napster and other file-swapping programs have hurt record sales. But a Jupiter Communications study concluded that Napster users are actually boosting record sales.

Rosen made no mention of the Napster controversy in a statement accompanying the numbers.

But she did write that "loyalty to the physical product remains, as is evident by these midyear shipment numbers."

ZDNet News' Ben Charny contributed to this report.