Recording Industry Association of America sues Napster in federal court in San Francisco alleging copyright infringement. Heavy metal rock group Metallica sues Napster for copyright infringement and racketeering. Rapper Dr. Dre files suit two weeks later. Metallica drummer Lars Ulrich and the band's lawyer produce list of more than 335,000 Internet user names of people the band says are illegally sharing their songs using Napster. Napster shut down.
Appeals court hears oral arguments.
Napster announces partnership with German media giant Bertelsmann AG to develop a membership-based distribution system that would guarantee payments to artists. Under the deal, Bertelsmann agrees to drop lawsuit against Napster and make its music catalog available to Napster, while gaining the right to buy a stake in the service. 9th Circuit says Napster must stop allowing music fans to use its free Internet-based service to share copyrighted material. A three-judge panel allowed Napster to remain in business but told a lower court judge to rewrite her injunction that ordered Napster to shut down pending a trial in the music industry's lawsuit. An appeals court has ruled Napster must stop trading in copyrighted material.