A federal appeals court today kept a stay on an injunction against Napster in place until a lower court can modify it, saying the popular online song-swap service could be held liable for copyright infringement under certain circumstances.
In the long-awaited but complicated ruling, a three-judge panel of the 9th Circuit Court of Appeals in San Francisco refused to grant the record industry's demand that Napster be immediately enjoined from trading copyrighted songs until the trial is held on the issue.
However, it ordered a lower court to modify its original injunction against Napster so that the service would not be able to perform certain practices.
"We direct the preliminary injunction fashioned by the District Court prior to this appeal shall remain stayed until it is modified by the District Court to conform with requirements of this position," the appeals court wrote.
"Napster may be held liable for contributory copyright infringement only to the extent that Napster knows of specific infringing files with copyrighted musical compositions or sound recordings, knows or should have known that the files are available on the Napster system, and fails to act to prevent the distribution of copyrighted materials," the court said in a summary.
Earlier, millions of music-lovers have logged on to Napster in a song downloading frenzy, fearing that the US federal court may soon shut down the service.
Mr Bruce Forest of Sapient Corp. Consulting company said almost 10,000 users were logging on to each of Napster's 100 servers yesterday at any one time and nearly 2 million songs were being swapped on each server.
Napster's servers normally accommodate about 6,000 users at a time.
Napster’s legal team is led by Mr David Boies, who represented the campaign of former US vice-president Mr Al Gore.
Since the lawsuit was first filed in December 1999, Napster's popularity has surged. To date, it has amassed nearly 60 million users who use it to swap songs for free by trading MP3 files, a compression format that turns music on compact discs into small computer files.
Last October BMG parent company Bertelsmann AG broke ranks with the other labels and joined forces with Napster. It is providing an estimated $50 million to help transform Napster into a secure subscription service.
Reuters