JUDGE SETS LENGTHY SCHEDULE FOR NAPSTER CASE
Napster judge laid out schedule Tues. for extensive discovery, going into 2003, on whether major record labels had misused copyrights anticompetitively. U.S. Dist. Judge Marilyn Patel, San Francisco, imposed some constraints, although Napster lawyer Celia Barenholtz argued against any, mainly in limiting Internet company to depositions of 2 executives from each of 5 plaintiff record companies. But Patel generally rejected pleas by industry lawyer Russell Frackman to expedite discovery, and by extending issue into next Jan. prolonged case even further than Napster had asked. Judge said she was taking cognizance of inevitable delays and taking care that depositions be done properly to avoid recalling witnesses and in recognition of fact that pretrial misuse question could turn into issue at any trial on record companies’ copyright infringement claims.
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Barenholtz’s first victory came when Patel agreed plaintiffs -- preparing to turn over to Napster documents submitted to U.S. Dept. of Justice in antitrust investigation -- must continue copying Napster as DoJ had requested any additional papers. Frackman said companies would start submitting 600,000-800,000 pages to Napster Wed. and finish by April 25 providing papers already sought by DoJ. Record companies have every incentive to turn over as much information as soon as possible because evidence exonerates them, he said. But Frackman resisted continuing requirement to produce documents, saying govt. investigation could go on for months and Napster’s discovery shouldn’t become “a never-ending process.”
Patel set these deadlines: June 28 for disclosure of 3rd parties to be deposed; July 31, submission of documents, interrogatory answers and disclosure of expert witnesses; Oct. 15, fact witnesses’ depositions; Nov. 15, final Napster expert reports; Dec. 6, plaintiffs’ expert reports; Jan. 10, experts’ depositions. She said she hoped to have misuse issue briefed and argued in Jan. Frackman had requested considerably faster schedule. Patel set July 8 hearing on proposed 3rd party witnesses and any discovery disputes.
Patel also agreed to Napster’s request to force plaintiffs to disclose memos and contract drafts involving settlement discussions with Napster because of what it said was pertinent information on proposed licensing terms. Barenholtz had argued that papers, though perhaps not ultimately admissible, nevertheless were discoverable. Patel ruled record companies could block out dollar amounts and raise arguments before special master against providing particular documents as privileged under attorney-client relationship or work product. She also required companies to turn over documents on actual licensing agreements, although only after notice to licensees, and then with confidentially under protective order and with names of 3rd parties, such as Yahoo, blocked out.
Napster later said it was pleased court had agreed to discovery schedule it proposed. “The record industry’s anticompetitive behavior has prevented consumers from paying for the music they want over the Internet,” said Steve Cohen, Napster’s attorney: “We look forward to exploring these issues further.”
Longer discovery schedule has no impact on merits of case, RIAA Senior Vp-Business & Legal Affairs Matthew Oppenheim said later. Record labels wanted shorter schedule because they were “so confident we'll be vindicated” that “why should we wait?” he said.
Separately, Napster said decision by 9th U.S. Appeals Court, San Francisco, to uphold lower court order shutting down file- swapping service (CED March 27 p2) wouldn’t hurt its new business. Company was “pleased,” spokeswoman said, that court reaffirmed that record labels must provide Napster with notice and lists of copyrighted works appearing on system before Napster must block access to them. Although 9th Circuit also dismissed Napster’s appeal of district court’s modified preliminary injunction and shut-down order, spokeswoman said: “Napster has since developed a new service and business model that will not be adversely affected” by ruling. RIAA official was sanguine about appeals court’s decision to let stand Patel’s order setting out labels’ responsibilities. All court said was, “this is what we said before, and that’s what we mean,” said RIAA’s Oppenheim said. Single most critical part of decision, he said, was that 9th Circuit upheld Patel’s order telling Napster to implement new filtering technique. That’s very significant statement, Oppenheim said, because Napster had argued that court couldn’t make it install newer technology. Ruling will be precedential, he said.