SAN FRANCISCO - A federal judge shut down the trading of music on Napster Inc. on Wednesday, saying the online company was encouraging ''wholesale infringing'' against music industry copyrights.
U.S. District Judge Marilyn Hall Patel noted that 70 million people are expected to be using Napster by year's end. ''What lures them is the infringing use,'' Patel said.
Patel said the injunction will go into effect at midnight Friday, after the nation's largest record producers post a $5 million bond against any financial losses Napster suffers from being shut down pending a trial.
Napster said it would appeal.
The Recording Industry Association of America sued Napster in December, accusing the San Mateo, Calif.-based company of encouraging an unrestrained, illegal, online bazaar.
Napster argued that personal copying of music is protected by federal law.
Napster provided a clear target for the lawsuit because directories of the song files are generated via the company's computer servers. The injunction will likely have no effect on Gnutella and other distributed-network technologies spawned by the popularity of Napster. With Gnutella or Freenet, there is no central server to shut down and the song files are traded directly between a constantly changing collection of computer users.
The music industry has made Napster the focus of a long-running dispute between copyright owners and Internet enthusiasts who believe information of all sorts should be traded freely.
''All of this litigation is really setting the groundwork for what is going to the future of the Internet,'' said Larry Iser, an intellectual property attorney.
The heavy metal band Metallica has been particularly outspoken against Napster.
Metallica sued the company for copyright infringement after the band found more than 300,000 users trading their songs online.
In response, Napster blocked access for more than 30,000 of those users identified by Metallica, but new people log on daily and continue trading the band's music.
The band's drummer, Lars Ulrich, lauded the judges decision to rein in Napster. ''We're elated,'' he told The Associated Press. ''Sharing is such a warm, cuddly, friendly word ... this is not sharing, it's duplicating. If I share my sandwich with you, I give you something I no longer have.''
The RIAA estimates that song-swapping via Napster by an estimated 20 million people worldwide has cost the music industry more than $300 million in lost sales.
But some research suggests that Internet song-swapping may not be so bad for the music industry after all.
A recent study of more than 2,200 online music fans by Jupiter Communications suggests that users of Napster and other music-sharing programs are 45 percent more likely to increase their music purchasing than fans who aren't trading digital bootlegs online.
''Clearly, people who are using Napster love music. They're probably our best customers,'' conceded Hilary Rosen, president of the RIAA, in an interview with The Associated Press.
Elisabeth Prot, a sales executive from San Francisco, uses Napster frequently. She said she would look for alternative programs to trade music online and add to her collection of more than 120 MP3s.
''I'm disappointed, but I think that there will soon be another way to download free music on the Internet,'' Prot said. ''The recording industry promotes one single off of one CD. You don't really get to hear the rest of the tracks and it's crap shoot. They can be either good or horrible.''
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