With its fate hanging in the balance, Napster Inc. has floated a possible solution that could end its legal battle with the Recording Industry Association of America: Turn the free service into a pay service.
A federal appeals court heard arguments Monday on whether to uphold an injunction ordered by a federal judge that would shut down the online music-swap service at least during a forthcoming trial. A ninth-hour reprieve from the appeals court stayed the injunction temporarily. Now the three-panel appeals court must determine whether the injunction was overly broad. They will either affirm it, reverse it or alter it based on Monday's hearing. Their decision is expected within a month.After Monday's proceedings, Napster CEO Hank Barry offered up a business plan that would make Napster a fee-based service that would pay royalties to artists.
"From Napster's perspective, it could be salvation if they could make a deal with the record companies," said intellectual property attorney Bill Coats. But, he adds, in order for such a plan to work, deals would have to be made with all the record labels, not just some of them, as well as music publishers, who are the other plaintiffs suing Napster for copyright infringement.
