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Napster pleads for its life at hearing

It vows to block access to pirated music files

SAN FRANCISCO — Napster Inc. made a plea Friday to keep its music-swapping service alive, telling a judge it would stem the trade of up to 1 million pirated music files with a new screening system.

Attorney David Boies' offer amounted to a concession that Napster's days were over as an online clearinghouse for the free trade in copyrighted tunes.

"Sometime this weekend, we will have completed the software implementation so that those file names will be blocked," David Boies said of a list of recordings provided by music labels and artists including Metallica and Dr. Dre.

He said people at Napster were "working night and day to develop a system to block access to these files."

Music industry attorney Russell Frackman told U.S. District Judge Marilyn Hall Patel that a far greater number of songs should be screened out, including recordings not yet released to the public. Napster should start with the Billboard Top 100 singles and Top 200 albums, and by policing its system to keep those lists current, he said.

Patel did not say when she would rule on a higher court's instruction that she narrow the scope of her July injunction ordering Napster to stop facilitating the swapping of pirated music.

Boies argued during the three-hour hearing that the new screening software would be bogged down by such voluminous requests.

Friday's offer marked San Mateo-based Napster's first step toward reinventing itself as a fee-based subscription service. The company said it will offer membership-based swapping by July 1, paying copyright holders royalty fees.

It is not yet clear how the millions of people accustomed to swapping music for free will respond to that offer.

Napster users downloaded with a vengeance as Friday's hearing began. More than 8,500 people were sharing more than 1.7 million files through just one of Napster's more than 50 servers.

Boies said Napster's new technology would effectively block searches for material identified by copyright holders, by programming the material into the screening system by song name and artist name.

The recording industry was not satisfied. It contended that better "digital fingerprinting" technologies for identifying music are available, and Napster has simply decided not to employ them.

"They are picking the worst way to filter out these recordings," Frackman said.

Hilary Rosen, president of the Recording Industry Association of America, said she will take Napster on its word that it is trying to develop a method to comply with the issues raised by the 9th U.S. Circuit Court of Appeals' instructions for a more focused injunction. But she said Napster's latest technology was only a start.

"We think that the screening technology has the potential to be effective, but we'll see," Rosen said.

In mid-February, an appeals court ordered Patel to rewrite her order in a way that may allow Napster to survive — albeit in a much more inhibited way.

Specifically, Patel must find a way for Napster to block pirated songs without limiting the free speech rights of computer users trading other music.

To avoid being shut down, Napster last week offered to settle the lawsuit for $1 billion in exchange for a 40 percent cut of online music sales. The offer was soundly rejected by the recording industry, which is anticipating victory in the landmark case.

Napster's popularity exploded in 1999 after founder Shawn Fanning released software making it easy for personal computer users to locate and trade songs stored as computer files in the MP3 format, which compresses digital recordings without sacrificing quality.

The five largest record labels — Sony, Warner, BMG, EMI and Universal — quickly sued, saying Napster could rob them of billions of dollars in profits. But the concept of peer-to-peer song trading proved wildly popular.

In October, German media giant Bertelsmann AG, which owns the BMG label, partnered with Napster and said it would fund the development of a subscription-based service.

Bertelsmann has urged its competitors to join in, but they have resisted. All the major labels are now developing online music distribution businesses of their own — even as other ways of getting free music are sprouting up that could doom their copyright protection-based models.

These difficult-to-trace peer-to-peer applications have funny names such as Gnutella, LimeWire, ToadNode and BearShare, but they're becoming easier to use.

The BearShare program — software that scours a constantly expanding number of hard drives for text, music and movie clips — has been downloaded more than 500,000 times since it was made available Dec. 4, said its designer, Vincent Falco.

Where all of this will leave Napster is unknown.