Editing Napster (section)

===Shutdown===
On July 11, 2001, Napster shut down its entire network to comply with the injunction. One week later, the 9th U.S. Circuit Court of Appeals temporarily overturned the order from the week before and allowed Napster to resume operations, due to Napster saying it could block all but a tiny fraction of unauthorized song-swapping.<ref>{{cite web|url=http://www.jamshowbiz.com/JamNapster/jul18_napster-ap.html|title=Appeals Court says Napster can go back online|date=July 18, 2001|publisher=[[Associated Press]]|archive-url=https://web.archive.org/web/20030501110218/http://www.jamshowbiz.com/JamNapster/jul18_napster-ap.html |archive-date=1 May 2003 }}</ref> On September 24, 2001, the case was partially settled. Napster agreed to pay music creators and copyright owners a $26 million settlement for past, unauthorized uses of music, and as an advance against future licensing royalties of $10 million. To pay those fees, Napster attempted to convert its free service into a subscription system, and thus traffic to Napster was reduced. A prototype solution was tested in 2002: the Napster 3.0 Alpha, using the ".nap" secure file format from PlayMedia Systems<ref>{{cite web|url=https://www.theregister.co.uk/2001/07/23/napster_to_ditch_mp3/|title=Napster to ditch MP3 for proprietary format|work=theregister.co.uk|access-date=2017-08-10|archive-date=2017-08-10|archive-url=https://web.archive.org/web/20170810142519/https://www.theregister.co.uk/2001/07/23/napster_to_ditch_mp3/|url-status=live}}</ref> and audio fingerprinting technology licensed from Relatable. Napster 3.0 was, according to many former Napster employees, ready to deploy, but it had significant trouble obtaining licenses to distribute major-label music. On May 17, 2002, Napster announced that its assets would be acquired by German media firm [[Bertelsmann]] for $85 million to transform Napster into an online music subscription service. The two companies had been collaborating since the middle of 2000<ref>{{Cite web
| url = https://www.cnet.com/news/bertelsmann-to-buy-napster-for-a-song/
| title = Bertelsmann to buy Napster for a song
| website = CNET
| access-date = 2016-02-29
| archive-date = 2016-03-10
| archive-url = https://web.archive.org/web/20160310055815/http://www.cnet.com/news/bertelsmann-to-buy-napster-for-a-song/
| url-status = live
}}</ref> when Bertelsmann became the first major label to drop its copyright lawsuit against Napster.<ref>{{Cite news
| url = https://www.theguardian.com/technology/2000/nov/01/internetnews.business
| title = Napster wins a new friend
| last1 = Teather
| first1 = David
| date = 2000-11-01
| newspaper = The Guardian
| language = en-GB
| issn = 0261-3077
| access-date = 2016-02-29
| archive-date = 2016-03-05
| archive-url = https://web.archive.org/web/20160305135358/http://www.theguardian.com/technology/2000/nov/01/internetnews.business
| url-status = live
}}</ref> Pursuant to the terms of the acquisition agreement, on June 3 Napster filed for [[Chapter 11, Title 11, United States Code|Chapter 11]] protection under [[United States]] [[bankruptcy]] laws. On September 3, 2002, an American bankruptcy judge blocked the sale to Bertelsmann and forced Napster to liquidate its assets.<ref name=lives />