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Napster faces double trouble in court

The company encounters a double whammy as it heads back to court and faces the prospects of new anti-copying requirements and a raft of re-energized lawsuits.

Napster encounters a double whammy Tuesday afternoon, heading back to court and facing the prospects of new anti-copying requirements, as well as a raft of re-energized lawsuits.

A month after Napster began blocking some songs being traded over the service, the time has come to judge its efforts. Millions of people are still using the service to download copyrighted music; the Recording Industry Association of America says the filtering has been a flop and says the company needs to be forced to do more. Napster says it has done the best it can with limited tools.

Instrumental in weighing Court gives Napster breathing roomthis issue will be a newly appointed court mediator, A.J. "Nick" Nichols, who also served as a neutral court expert in Sun Microsystems' suit against Microsoft. Nichols was brought into the case about two weeks ago, according to a Napster representative, but his identity has not yet been released by the court.

Also on tap Tuesday is a potentially sweeping escalation of the case against Napster. Independent musicians and music publishers are asking that several individual lawsuits against the company be turned into class-action suits, allowing thousands of other individuals the option to come aboard.

The spotlight, however, will be on the most immediate questions affecting Napster's survival: Does Judge Marilynn Hall Patel think Napster has followed her instructions far enough in blocking songs? Given Patel's previous skepticism toward Napster, some observers expect fireworks.

"I think the judge is going to be very frustrated," said Los Angeles copyright attorney Kenneth Freundlich, who has followed the case closely. "It's bad, because this has become all about (the details of the filtering) instead of the potential good in Napster as a business model."

What's a filter for?
Patel ordered Napster to begin blocking songs early last month, after the 9th Circuit Court of Appeals ruled that she had acted mostly correctly in issuing an injunction last summer. But at the appeals court's behest, she did loosen the noose around Napster's neck somewhat, giving it room to continue the swapping service as long as it took all "reasonable" steps toward blocking songs identified by the record companies.

But Patel's decision raised as many new controversies as it settled. Napster has blocked songs only when given both an artist name and song title, citing the court's insistence that the industry must point to a specific file on Napster before a song can be blocked. That's the only way to prevent massive overblocking of songs that shouldn't be caught in the filters, the company says.

Napster executives say they are doing their best to work within the constraints of the court order. As of last week, the company had blocked more than 311,000 individual songs, as well as 142,000 various misspellings of those song names or artist names. The company has its own staff looking for variations of spellings ("Metalica" instead of "Metallica," for example), has bought access to Gracenote's vast database of common song misspellings, and has its own automated filter looking for likely misspellings or other filter-avoiding tricks.

The company points to a sharp drop in some measures of use of its service as proof of its success. "The success and timeliness of Napster's exclusion of file names that include accurate artist and title information is now incontrovertible," the company told the court in a filing last week. "In less than three weeks, the number of files per user now listed on the Napster index has dropped by more than half."

The record industry has consistently noted that despite these efforts, many or most of the songs purportedly blocked are still available. Record companies are asking the court to force Napster to improve its technology, or else move to a system where only songs that have been preapproved by copyright holders can be traded.

"Virtually all the music that we (identified for) Napster that they claimed they filtered is still available on the system," RIAA Chief Executive Hilary Rosen said in a recent press conference. "We are saying there is no effective filtering out of copyrighted works on Napster."

Both sides declined to speculate on precisely what would happen at Tuesday's hearing.

Patel has given no indication of whether she will give an official opinion on Napster's filters Tuesday, or simply hear testimony. Much of her ultimate opinion will likely rely on Nichols, who has been appointed in part to apply a kind of technological reality check to both sides' arguments.

Nichols, who has served as mediator in several other tech-focused cases, has a Ph.D. in electrical engineering from Stanford University and is president of Probitas, a consulting firm.

Tuesday also will see attorneys for music publishers and independent musicians argue for class-action status, a development that could make settlement of the case considerably harder for Napster. With the company already facing millions or even billions of dollars in damages, a class-action suit could add many more plaintiffs and the threat of even more damages.

But last week's series of major music deals with other Internet companies already bodes ill for the prospect of a settlement, some say. As the labels build businesses relying on relationships with Yahoo and RealNetworks, they have less incentive to keep Napster in business should they emerge victorious in the lawsuit.

"There's a land grab here. The majors are coming on and Napster's in the way," Freundlich said. "They could stamp Napster out with the damages alone."