SAN FRANCISCO -- Characterizing Napster's filtering efforts as "disgraceful," Judge Marilyn Hall Patel issued a stern warning to the file-trading company: Get compliant with the court-ordered injunction or face the music.
"If you can't, maybe the system needs to be shut down," she said.
In a contentious court hearing on Tuesday, lawyers from the recording industry and Napster engaged in a heated 90-minute debate over the filtering technology the file-trading company has been building for the last five weeks.
Russell Frackman, lead counsel for the recording industry, argued that Napster officials have been more focused on legal maneuvering than developing their filtering technology. Frackman said that the company has been sabotaging its system instead of adding the names of copyrighted works to its blocking system.
Patel made it clear she believed Frackman was telling the truth.
"I think this is disgraceful," Patel said when shown a list of 6,000 songs that should have been blocked by the music publishers. Over 5,000 of the songs still appeared on Napster Tuesday morning. "If there is that many songs on the system, then Napster needs to find a way to remove them."
On March 6, Patel issued an injunction that required Napster to begin filtering songs from its file-trading system three days after it was notified of the violations by the recording industry. Since that time, neither side has been able to agree on who should ultimately be in charge of monitoring the system.
While acknowledging that the Ninth Circuit Court of Appeals had already ruled that Napster could continue to operate, she continually expressed her disbelief that the filtering technology employed by the company worked so poorly.
At one point, she echoed the infamous statement she made during the initial injunction ruling last year.
"You created this monster, now you go figure out how to stop it," she said.
Instead of continuing the back-and-forth between Napster and the recording industry over how the filtering technology should work, Patel turned to the recently named "technology expert" agreed upon by both sides.
This Friday, Patel and one representative from each side will join Dr. A.J. Nichols on a conference call to begin discussing how filtering technology can be used to bring Napster into compliance with the court-ordered injunction.
Napster counsel Jonathan Schiller said the addition of the outside technology expert would aid the company's case by helping Patel understand the intricacies of the file-trading architecture.
"She's concerned that she needs technical assistance in evaluating the filtering technology," Schiller said. "We are confident that she will see that we are in compliance right now and that we are continuing to work on the system."
Schiller said the company had spend millions of dollars in legal fees and technology development -- including a recent deal with Gracenote that will help Napster refine its blocking system -- to upgrade the filter.
But the recording industry continued to fire away at Napster's defense, claiming that if the company was serious about eliminating copyrighted files from the system, there is technology available.
"There are so many things that they aren't doing right now that they could be doing tomorrow," Cary Sherman, the Recording Industry Association of America's senior executive vice president and general counsel, said. "If they made the effort, they could really effect an immediate change."
Sherman said merely filtering songs by artist name alone, Napster could vastly reduce the number of illegally traded songs through its network.
Patel eventually grew weary of the back-and-forth between each side, and continued to implore both sides to work on settling this dispute outside of court.
In a move that could prove just as devastating to Napster as a court-developed filter, Patel said that music publishers would likely be allowed to consolidate their cases into a class-action suit. That would potentially allow for hundreds, or thousands, of individuals whose works have appeared on the file-trading network to jump on the legal bandwagon.
She issued no ruling from the bench on the matter, but said that she expected to create a "limited class" by determining a specific time frame during which publishers from the Harry Fox Agency would be allowed to join a lawsuit against Napster.
Patel did indicate that she was likely to rule out a class-action lawsuit on behalf of independent artists since there are no central organizations in the United States that controls them.
Patel also opened the door for a rather curious legal fight that could ultimately hold venture capitalists and other executives responsible for fostering technology that is used to break the law.
Matthew Katz, an attorney who has brought numerous lawsuits against various companies on his own behalf, has brought charges against Napster CEO Hank Barry, founder Shawn Fanning, Fanning's uncle John who helped launch the service and Limp Bizkit front man Fred Durst.
In what is being termed "tertiary contributory infringement," Katz argued that because these people either developed, funded or supported Napster, they should be held financially responsible for the effects of the system.
Patel acknowledged that Katz was unlikely to win his suit, but entertained the notion that individuals could be held accountable for their work. When the recording industry's Frackman jumped up to support Katz's claim, Patel issued a challenge to the lawyer.
"You aren't involved in this case," she said. "But if you have the guts to put this down in your filing, then let's amend the filing."
Barry said that there was no basis in the law for that suit to move forward.
