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 attorney 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 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. In a clear victory for the recording industry, the 9th Circuit Court of Appeals rules that Napster must prevent its subscribers from gaining access to content on its search index that could potentially infringe copyrights. The recording industry scoffs at the offer. 9th Circuit Appeals Court orders Napster to cease trading copywritten songs.