__1999: __The Recording Industry Association of America sues Napster, the online, peer-to-peer file sharing service that's allowing millions of computer users to score free, copyright music. The rules are about to change.

Napster founder Shawn Fanning won rock-star celebrity with the service. But music-industry heads were spinning.

So, the RIAA sued Napster and all of its financial backers in federal court in San Francisco. The outcome eventually defined the rules of online, peer-to-peer file sharing networks.

The case began 13 years ago today and dragged on for almost eight years.

A federal judge and an appeals court in San Francisco both ruled in 2002 that Napster was liable for contributory or vicarious copyright violations, because it was allowing millions of users to download music for free. Napster eventually shut down and went bankrupt, later re-emerging as a legitimate, online music service.

The Napster trial was about big money. Along the way, the case mutated into a cannibalizing feeding frenzy: The music industry was searching for deep financial pockets, and targeted one of its own.

With a bankrupt Napster unable to cough up big financial damages, the industry turned to the transnational German media conglomerate Bertelsmann. The lawsuits accused Bertelsmann of copyright infringement for propping up Napster financially with loans totaling $85 million. The lawsuits claimed the firm wanted "to preserve Napster’s user base for Bertelsmann's own commercial advantage."

At the time of the loans, Bertelsmann’s chairman, Thomas Middelhoff, explained that "Napster has pointed the way for a new direction for music distribution, and we believe it will form the basis of important and exciting new business models for the future of the music industry."

Bertelsmann paid millions of dollars to settle the claims. The media concern agreed in 2006 to pay the world’s largest label, Universal Music Group, $60 million to settle the allegations. EMI got an undisclosed amount in 2007, and Warner Music Group settled that same year for $110 million.

The Napster case closed its final chapter in August 2007, when Bertelsmann agreed to pay the National Music Publishers Association $130 million to settle the remaining copyright claims.

The case also served as the impetus, in part, for the RIAA's litigation campaign against individual users, as the industry could not keep up a legal game of Whac-A-Mole against flourishing file sharing services like Kazaa and Limewire. In the last six years, the RIAA has filed about 30,000 copyright cases against individuals, most of whom have settled out of court.

The two individual defendants who went to trial were assessed more than $2 million combined in damages.

Source: Various

Image: Napster logo