Napster argued that the original decision was too broad and violated its right to free speech. It had requested that the injunction decision be re-tried before the original panel of three judges, or the broader 11 judge panel of the Supreme Court.
Despite losing this latest round of the case, Napster hopes that the launch of its new secure membership service in co-operation with three of the major recording companies in October will dissuade the recording industry from continuing with the current lawsuit. However, it has already suffered a massive drop in use since it began filtering songs, estimated by researchers Webnoize at 41%.
In a statement, the Recording Industry Association of America (RIAA) has called the appeal court’s decision “a victory for copyright holders”. Cary Sherman, Senior Executive Vice President and General Counsel at the RIAA said: “This decision puts to rest any questions that Napster has raised regarding the earlier decision and affirms the rights of copyright holders on the Internet”.
Meanwhile, file-swapping rival Aimster has won a small court victory. A federal judge has agreed to hear Aimster’s case in Albany, New York. The company is seeking a declaratory judgement that it did not breach copyrights by allowing file transfers. The RIAA had called for the case to be transferred to Manhattan, where 36 companies have filed copyright infringement claims against it.