Napster safe, but only just

Napster must halt the trading of copyrighted songs on its site, although it will be allowed to stay in operation until a US court modifies an injunction against the company.

According to a ruling by a US Court of Appeals, the file swapping company must prevent users from gaining access to potentially infringing content, or be liable for copyright infringement. Napster officials have said that such a decision could force them to shut down the service.

In its 58-page opinion, the three-judge appeals panel in San Francisco also told District Judge Marilyn Patel to modify and rewrite her 26 July injunction, so that Napster is barred only from distributing music it knows infringes material protected by copyright. The appeals judges described Patel's original injunction as "overbroad".

The Recording Industry Association of America (RIAA), which represents the five major record companies that are suing Napster for alleged copyright infringement, has declared the judges' decision a victory. It's president and chief executive, Hilary Rosen, said: "The court of appeals found that the injunction is not only warranted, but required. And it ruled in our favour on every legal issue presented."

In a statement, Warner Music Group, one of the plaintiffs in the copyright infringement case that will be tried at a later date, also said it was delighted with the outcome. "As the legal landscape of the online world becomes increasingly defined, artists, consumers, copyright holders and internet companies alike can embrace the great potential of this medium with the confidence that the artist's work will be respected," said officials.

But some observers do not believe that today's decision will spell the end for the peer-to-peer file swapping technology that has made Napster so popular. Stephen Dull, a partner in Accenture's convergence marketing practice, said: "[The decision] is a bit of a red herring. This technology has the potential to transform the web and will be there regardless of the decision."

Millions of music fans flooded Napster's website over the weekend to stock up on free songs ahead of the appeals court's decision, which was announced today at 6pm GMT.

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