Napster and record industry meet for talks

Napster, the controversial music file swapping service, is reported to be in talks with the US record industry to settle their legal dispute.

Executives from both sides have been in discussions to resolve the issue, according to US reports. The dispute began earlier this year when the Recording Industry Association of America (RIAA) sued Napster accusing it of copyright violations.

Napster's software enables music fans to swap tracks that reside on each other's hard drives. At any time, thousands of people can share hundreds of thousands of tracks, many of which are technically illegal to download without the permission of the copyright holders. A RIAA spokeswoman claimed that Napster's service is "wholesale piracy".

She declined on confirm whether the RIAA is in talks with Napster but said that a US court is due to hear the case next month. She said: "There may be discussions going on but a hearing in court is due on 26 July." Officials from Napster failed to comment.

The reports suggest that Napster is keen to settle the argument particularly because it is trying to establish itself as an on-going business. It recently won a $13m injection from Silicon Valley venture capital company, Hummer Winblad Venture Partners.

Among the possible solutions could be to give record labels a stake in the company. But some observers fear the rift between the two sides are too deep to develop such a solution. However there are signs that the record industry is willing to embrace the online music phenomena.

Earlier this month two recording companies, Warner Music Group (WMG) and BMG, settled their respective lawsuits with MP3.com after a judge ruled that its service was liable for copyright infringement. MP3.com offers a service called my.mp3.com, which enables users to store and replay their own CDs online.

Despite the settlements, which include the licensing of music catalogues from WMG and BMG to MP3.com, users of the service are still blocked from accessing their CDs on the my.mp3.com site. MP3.com said service will be resumed once it reaches settlement with the other recording companies involved.