Napster Ruling Announced, Good News And Worse News For MP3 Trading Service

The Napster case was finally ruled upon in Appeals Court today. An original June decision had ordered the music sharing service immediately shut down, but an appeal to that ruling granted Napster a stay until this morning. The long awaited Appellate ruling is not a good one for Napster. The original case resulted from a lawsuit from the five major recording labels which are BMG Entertainment, EMI Recorded Music, Sony Music Group, Universal Music Group and Warner Music Group. The judge ruled in that case that Napster must immediately prohibit the trading of any music whose copyrights were owned by those companies. The ruling was to have gone into affect in late July of 2000, but an appeals court stayed the injunction pending their own ruling.

That ruling was handed down today, and though it gives a minor amount of leeway to Napster, it leaves little doubt as to the long-term prospects of the company. The Appeals court ruled that the injunction was too broad, in that Napster could only be held liable for not stopping trading they knew to be in violation of copyrights. Napster will be held liable for not doing everything in their power to stop those trades, according to the ruling. The original injunction against Napster that demanded the service halt its operations will be upheld as soon as the judge from the original case corrects that "overbroad" aspect of her ruling. The injunction will be continue to be stayed, however, until she has changed her ruling to take the Appeals courtis changes into account, and that means that Napster is sill alive, for now.

An appeal to the Supreme Court is possible, though getting another stay until then is virtually impossible.

Napster has not yet made a statement as of press time..