Jordan Mendelson

Legal challenges

In December 1999, A&M Records along with several other recording companies, through the Recording Industry Association of America (RIAA), sued Napster (A&M Records, Inc. v. Napster, Inc.) on grounds of contributory and vicarious copyright infringement under the Digital Millennium Copyright Act (DMCA).

A demo of Metallica's song "I Disappear" circulated on Napster before the song was officially released and it received radio airplay. In April 2000, the lawsuit Metallica v. Napster, Inc. was filed. The band said it identified 335,000 individuals who were allegedly sharing the band’s songs online in violation of copyright laws. The band's attorney's delivered close to 60,000 pages to Napster showing the violations.

A month later, Dr. Dre, who shared a litigator and legal firm with Metallica, filed a similar lawsuit after Napster refused his written request to remove his works from its service.

In June 2000, Madonna's single "Music" was leaked onto Napster prior to its commercial release.

In July 2000, U.S. District Judge Marilyn Hall Patel issued a preliminary injunction requiring Napster to block the sharing of copyrighted music. Napster appealed, and two days later, a panel of judges from the Ninth Circuit issued an emergency stay, pending an appellate hearing.

Some artists supported Napster. In October 2000, Radiohead's album Kid A was leaked on Napster three weeks before the album's official release. The album became the first entry for the band on a U.S. chart and its leak on Napster is credited with spurring sales. Other artists who supported Napster included independent artists such as DJ Xealot, Chuck D from Public Enemy, and Dave Matthews, who, in January 2001, authorized the leaking of his singles onto the platform.

Verified Napster use peaked with 26.4 million users worldwide in February 2001; however, some unofficial estimates cited a peak of 80 million registered users.

Also in February 2001, Napster offered the record labels a settlement of $1 billion over the next five years, funded by a potential relaunch with a subscription business model. The offer was dismissed.

Also that month, in the case of A&M Records, Inc. v. Napster, Inc., the District Court issued a ruling requiring the lower court to fashion an injunction forcing Napster to stop allowing the sharing of copyrighted works but respecting Napster's technological limits to police activity on its site.

Napster formally petitioned the court for an en banc review by an expanded panel of 11 judges. The appeals court turned down the request, leading to the injunction.

The injunction commanded Napster to keep track of the activities of its network and to restrict access to infringing material when informed of that material's location. The P2P model employed by Napster involved an integral centralized database, hosted by Napster, that indexed a complete list of all songs being shared from connected clients.

Also in July 2001, Napster settled the lawsuits from Metallica and Dr. Dre.