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File Trading Takes AIM at AOL
A new Napster-like file-sharing program that allows users to trade files with buddy groups over America Online’s instant-messaging service was unveiled last Tuesday. Developed by independent programmers and dubbed Aimster, the application appears to enable trading to take place in a more secured environment than the either the centralized servers of Napster, where user names can be tracked using software like Media Enforcer, or decentralized networks like Gnutella where end users don’t know the parties who are offering up files for sharing.

Although America Online’s AIM service allows users to send individual files to one another, Aimster adds search and retrieval functions. The program is designed only for people using AOL instant messaging tools, not for use between AIM users and those using other companies’ software.

"There is huge market potential for tools that allow people and businesses to easily set up private, peer-to-peer networks," said Jeff Nixon, managing partner for venture capital firm Interactive Capital Partners and who is familiar with Aimster. "It’s the next natural evolution in personal communications after email and instant messaging, and it helps further unlock the most powerful part of the network - "the knowledge of each person that makes up the network," Nixon said in a statement.

In 1999, America Online posted the technical details that enable third parties to communicate with its users, but has routinely blocked companies that have developed compatible services. The application works with the Windows 95/98/NT platform.

Judge expands on Napster shutdown order

Given the vast scale of Napster use among anonymous individuals, the court finds that downloading and uploading MP3 music files with the assistance of Napster are not private uses. Moreover, the fact that Napster users get for free something they would ordinarily have to buy suggests that they reap economic advantages from Napster use

The loaded gun pointed at Napster’s head loomed a little larger last week, as federal Judge Marilyn Hall Patel released the details of her decision ordering the company to close its digital doors. Three weeks ago, Patel granted a preliminary injunction against the music-swapping start-up that would have barred it from allowing any major-label songs to be traded through its service.
That order was quickly put on hold by an appeals court, but that stay is only temporary. Next week, Napster will submit its first legal papers laying out why it thinks Patel was wrong -- and today’s documents show that the company will have a high legal hill to climb. Napster is one of several companies developing so-called peer-to-peer technology that lets people search and retrieve music files directly from one another’s personal computers.

The technology has been hailed as a revolutionary development for the Internet, much as Web browsers were five years ago. It also has been vilified by the entertainment industry, which fears peer-to-peer networks could make piracy of almost any digital work unstoppable. Napster’s defense against a wide-ranging lawsuit brought by the Recording Industry Association of America (RIAA) rests largely on the idea that downloading copyrighted songs for free isn’t actually illegal.

They claim a "fair use" for their members that rests on the contention that people using Napster are doing so for personal use, not for commercial benefit. Patel clearly didn’t buy this argument last month, and today she expanded on her original comments. "Given the vast scale of Napster use among anonymous individuals, the court finds that downloading and uploading MP3 music files with the assistance of Napster are not private uses," the judge wrote. "Moreover, the fact that Napster users get for free something they would ordinarily have to buy suggests that they reap economic advantages from Napster use."

Patel outlined most of these issues last month, but last week’s documents show the details of what both sides’ attorneys are facing. The injunction, which Napster has said would force it to close its service altogether, has only been stayed pending an appeals court review of Patel’s decision.

If that court finds Patel’s conclusion -- which says the record industry will suffer "irreparable harm" as a result of millions of downloads of their copyrighted songs on Napster -- convincing, then it will likely reinstate the injunction. Most of last week’s documents continue the skeptical tone that Patel struck in her decision against Napster last month.

Both sides have asked that much of their opponents’ supporting evidence be dismissed as irrelevant or flawed. The recording industry was allowed to keep each of the studies it has submitted that purport to show declines in record sales as a result of Napster’s existence, although the judge did make some criticism of their usefulness. By contrast, the testimony of several Napster supporting experts was dismissed.

Patel allowed the company to retain the study on which it had based much of its defense, which argues that Napster actually helped record sales, but she called it "gravely flawed." The judge summed up her initial review of the effects of Napster with what may be her most damning statement, and one that the company must persuade the appeals court to disagree with.

"Indeed...(Napster) has contributed to a new attitude that digitally downloaded songs ought to be free -- an attitude that creates formidable hurdles for the establishment of a commercial downloading market," Patel wrote. The company has said that Patel’s decision would cripple the nascent file-sharing industry. "We strongly and firmly disagree with the judge’s decision," Napster chief executive Hank Barry said after the original decision. "We intend to see this through in every venue, in every court."

Napster’s first court briefs addressing Patel’s decision are due at the end of this week. The recording industry must respond by Sept. 18, after which a court date will be scheduled.

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