February 13, 2001 – In a decision that could shut down the controversial music file-sharing service, a federal appeals court upheld an injunction yesterday ordering Napster to stop allowing the free-for-all trading of copyrighted songs.

Several related companies issued the following statements on the Ninth Circuit Court of Appeals ruling:

Hilary Rosen, president and CEO of Recording Industry Association of America (RIAA):

"This is a clear victory. The court of appeals found that the injunction is not only warranted, but required. And it ruled in our favor on every legal issue presented."

Rob Glaser, Chairman and CEO of RealNetworks (a global leader in internet media delivery):

"Today's court decision is an important step in establishing clear rules of the road for digital music distribution -- rules that will help make Internet bootlegging a thing of the past. As such, we think the ruling is a very positive development. Now it's time for the industry to move forward to build great businesses that respect the legitimate interests of consumers, artists and rights holders.

Rolf Schmidt-Holtz, President and CEO of BMG (Bertelsmann Music Group) Entertainment (the only major label that settled its suit against Napster):

"BMG remains committed to the development of secure file sharing services that compensate our artists and other rightsholders. BMG recognizes the strong consumer demand for file sharing and will work with BeCG and Napster in developing industry-supported services that bring fans closer to their favorite artists."

Bertelsmann on the Napster decision:

"Today's decision is another step in the process of accommodating the legitimate rights of copyrights holders and the important interests of Napster users. Bertelsmann is committed to implementing a win-win strategy, one that secures and compensates the rights of artists, copyrights holders and the music industry while also enabling Napster to provide music lovers with a first-class file-sharing system. That is why Bertelsmann did the deal with Napster in the first place and why we will redouble our efforts to reach a mutually satisfactory solution.

Andreas Schmidt, President and CEO of Bertelsmann eCommerce Group:

"File sharing is here to stay, and we will continue working to build a membership-based Napster service that will be supported by the music industry."

Gene Hoffman, President and CEO of EMusic:

"Today's decision is a fair, important re-affirmation of the rights of copyright holders to be able to determine how and where their work is used. We are pleased that the district court will be issuing a new injunction against Napster that will effectively block the unauthorized distribution of music files. This should establish a clear foundation for the growth of legitimate music download services on the Internet -- where artists, labels and consumers all have a voice in how digital music is enjoyed."

Napster's response to the ruling:

"Napster is not shut down, but under this decision it could be. We are very disappointed in this ruling by the three-judge panel and will seek appellate review. The Court today ruled on the basis of what it recognized was an incomplete record before it. We look forward to getting more facts into the record. We will pursue every avenue in the courts and the Congress to keep Napster operating."

Monday's decision partially reaffirms last July's ruling from U.S. District Judge Marilyn Hall Patel, who sided with the RIAA and ordered Napster shut down pending a full trial. Two days later, the 9th Circuit Court of Appeals granted an emergency stay, allowing the site to stay online while it examined the case.