The 9th U.S. Circuit Court of Appeals said this week that a three-judge panel would hear the Napster case sometime between Oct. 2 and Oct. 6 in San Francisco. Many experts are bracing for judges to rule against the file-swapping companies, causing venture funding to dry up for other players in the risky niche.
Many venture capitalists say investing in the upstarts is too risky.
Scour, which also allows for the swapping of full-length movies, faces the wrath of the RIAA and of the Motion Picture Association of America. That would make the venture firm liable for financial damages. Venture firms, which provide funding that technology start-ups require to grow, receive their payoff when a company goes public or is bought. The threat of vicarious liability has scared off many venture firms from the file-sharing arena. The case was settled last year, with no parties having to pay damages.