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Napster Court Ruling Expected

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SAN FRANCISCO -- As another legal milestone loomed for Napster Inc., tens of thousands of music fans flooded the company's computer servers to download free tunes for fear they may not remain free for long.

Songs whizzed from hard drive to hard drive Sunday as the battle over copyright ownership found itself once again hinging on a court ruling, this one due Monday from the 9th U.S. Circuit Court of Appeals.

The court was set to rule on an injunction issued last year by a lower court, but it was put on hold and taken under submission by a three-judge panel. Monday's ruling could go so far as to shut down service to Napster's estimated 50 million song-swap users.

On the eve of the ruling, just one of Napster's servers listed more than 2.2 million MP3 song files shared among 12,909 users. That number of songs -- at an average playing time of four minutes per song -- would take more than 17 years to listen to if played back to back.

Major record labels hope Monday's ruling will force millions of computer users to pay for music the online music swapping service has allowed them to get for free.

If Napster wins, however, the ruling could give new life to other business ventures that have been waiting for guidance on whether a "personal use" exception to copyright law allows or prohibits trading songs over the Internet.

The digital music technology Napster made popular is here to stay either way. The recording industry appears stymied by the notion of funneling music to consumers via the Internet for a price while freely available computer applications allow even the computer novice to do it for free.

"Monday's decision may finally clear the way for the legitimate online marketplace to thrive in an environment that encourages both creativity and a respect for copyright," Hilary Rosen, president of the Recording Industry Association of America, said in a statement Friday.

The five largest record labels --Sony, Warner, BMG, EMI and Universal -- sued as soon as Redwood City-based Napster took off, saying it could rob them of billions of dollars in profits.

The issue before the U.S. 9th Circuit Court of Appeals is whether to uphold U.S. District Judge Marilyn Hall Patel's injunction ordering Napster to shut down pending a trial on the music industry lawsuit. The injunction was stayed pending the 9th Circuit review.

But the three-judge appellate panel also could rule more broadly, describing how copyright law should apply to emerging technologies that make it ever more difficult to control and profit from the distribution of music, software, books, movies and other creative content.

U.S. copyright law includes a "doctrine of fair use" which allows copies to be made and used without permission if the copying is for a nonprofit purpose, and won't cause the creative content to lose value in the marketplace.

The question is whether it is personal use when Napster users collectively make millions of music files available for free to anyone else with a computer and a modem.

In May 1999, Napster founder Shawn Fanning released software that made it easy for personal computer users to locate and trade songs they had stored as computer files in the MP3 format, which crunches digital recordings down to manageable lengths without sacrificing quality.

The concept of "peer-to-peer" song trading quickly proved too popular to contain. As Napster users grew by the millions, other file-sharing programs also popped up, such as Gnutella and Freenet. And the labels themselves are looking to use the same technology, only with paying subscribers and secure digital formats that prevent copying.

Since the appellate judges began deliberating in October, Napster has made agreements with former business foes like Bertelsmann AG, the parent company of the BMG music unit. The German media giant has promised much-needed capital if Napster switches to a subscription-based service that pays artists' royalties.

The other four major labels are holding out for Napster's demise.